Exhibit 10.1
January 29, 2008
PNC
Environmental Tectonics Corporation
County Line Industrial Park
125 James Way
Southampton, PA 18966-3817
Attention: Duane Deaner, CFO
Re: Credit Agreement Waiver and
Amendment
Dear
Mr. Deaner:
Reference is made to the Letter
Agreement, dated as of July 31, 2007 (the “Credit
Agreement”), between Environmental Tectonics Corporation (the
“Borrower”) and PNC Bank, National Association (the
“Bank”). Capitalized terms used herein and not
otherwise defined shall have the meanings given them in the Credit
Agreement.
The Borrower has previously advised
the Bank that it will be required to restate its Financial
Statements for its fiscal year ended February 23, 2007, and
possibly for prior periods, due to the failure to establish
reserves against its accounts receivable in respect of a particular
contract claim against the Department of the Navy. Accordingly, the
Borrower was in breach of the representation and warranty contained
in Section 7(a) of the Credit Agreement with respect to its
previously delivered Financial Statements as of February 23,
2007 because such Financial Statements were not true, complete and
accurate in all material respects and did not fairly present the
financial condition, assets and liabilities of the Borrower as of
the date thereof. Such breach constituted an Event of Default under
the
