ENVIRONMENTAL TECTONICS CORP
EXHIBIT 10.1
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<TYPE>EX-10
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<FILENAME>ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1
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                                  EXHIBIT 10.1
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                    WAIVER AND AMENDMENT TO CREDIT AGREEMENT
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         This WAIVER AND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
made as of May 18, 2006, between ENVIRONMENTAL TECTONICS CORPORATION (the
"Borrower") and PNC BANK, NATIONAL ASSOCIATION (the "Bank").

                                   BACKGROUND
                                   ----------

         A. The Bank and the Borrower are parties to a Credit Agreement dated as
of February 18, 2003 (as heretofore amended or modified, the "Credit
Agreement"), pursuant to which the Bank has agreed to issue Letters of Credit on
behalf of the Borrower.

         B. The Borrower has requested that the Bank waive compliance with
certain requirements of the Credit Agreement and amend the Credit Agreement to
extend the Revolving Credit Termination Date and the Bank has agreed to do so on
and subject to the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the foregoing and for good and
valuable consideration, the legality and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:

                                    AGREEMENT
                                    ---------

         1. Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement.

         2. Waiver. The Borrower has not delivered the Financial Projections for
the 2007 Fiscal Year within the time period required by Section 5.2(g) of the
Credit Agreement. At the Borrower's request, the Bank hereby waives the failure
to provide such Financial Projections within the required time period provided
that the Borrower shall deliver to the Bank such Financial Projections no later
than June 30, 2006. Failure to deliver such Financial Projections by June 30,
2006 shall constitute an Event of Default. The foregoing waiver shall not be
deemed to operate as or obligate the Bank to grant any future waiver of the
provisions of Section 5.2(g) for any other failure to comply with said Section
5.2(g) or of any other term, Condition of Default or Event of Default under the
Credit Agreement.

         3. Amendment to Credit Agreement. The Credit Agreement is hereby
amended as follows:

                  (a) The definition of "Revolving Credit Termination Date" is
hereby amended and restated to read in full as follows:
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                  ""Revolving Credit Termination Date": the earlier of (a) June
                  30, 2006 or such later date to which the Borrower and the Bank
                  have agreed in writing and (b) the date the Revolving Credit
                  Commitment is terminated as provided herein."

         4. Amendments to Loan Documents. All references to the Credit Agreement
in any of the Loan Documents shall be deemed to refer to the Credit Agreement as
amended by this Amendment.

         5. Ratification; Acknowledgment. Except as the provisions thereof have
been expressly amended by this Amendment, the Credit Agreement and the other
Loan Documents shall continue to be, and shall remain, unaltered and in full
force and effect in accordance with their terms. The Borrower hereby affirms all
the provisions of the Loan Documents, as amended or modified by this Amendment.

         6. Representations and Warranties.

                  (a) The Borrower hereby certifies that (i) the representations
and warranties of the Borrower in the Credit Agreement are true and correct in
all material respects as of the date hereof, as if made on the date hereof and
(ii) no Event of Default and no event which could become an Event of Default
with the passage of time or the giving of notice, or both, under the Credit
Agreement or the other Loan Documents exists on the date hereof.

                  (b) The Borrower represents that it has all the requisite
power and authority to enter into and to perform its obligations under this
Amendment, and that the execution, delivery and performance of this Amendment
have been duly authorized by all requisite action and will not violate or
constitute a default under any provision of any applicable law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect or of the Articles of Incorporation or by-laws of the
Borrower, or of any indenture, note, loan or credit agreement, license or any
other agreement, lease or instrument to which the Borrower is a party or by
which the Borrower or any of its properties are bound.

                  (c) The Borrower represents that its obligation to repay the
Loans, together with all interest accrued thereon, is absolute and
unconditional, and there exists no right of set off or recoupment, counterclaim
or defense of any nature whatsoever to payment of the Loans.

                  (d) The Borrower represents that there have been no changes to
the Articles of Incorporation, by-laws or other organizational documents of the
Borrower since the most recent date true and correct copies thereof were
delivered to the Bank.

         7. Conditions Precedent. The effectiveness of this Amendment is subject
to the fulfillment, to the satisfaction of the Bank and its counsel, of the
following conditions precedent:

                  (a) The Borrower shall have delivered to the Bank the
following, all of which shall be in form and substance satisfactory to the Bank
and shall be duly completed and executed:


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                           (i) This Amendment, executed by the Borrower;

                           (ii) Such additional documents, certificates and
                  information as the Bank may require pursuant to the terms
                  hereof or otherwise reasonably request.

                  (b) After giving effect to the amendments contained herein,
the representations and warranties set forth in the Credit Agreement shall be
true and correct on and as of the date hereof.

                  (c) After giving effect to the amendments contained herein, no
Event of Default hereunder, and no event which, with the passage of time or the
giving of notice, or both, would become such an Event of Default shall have
occurred and be continuing as of the date hereof.

         8. No Waiver. Except as expressly provided herein, this Amendment does
not and shall not be deemed to constitute a waiver by the Bank of any Event of
Default, or of any event which with the passage of time or the giving of notice
or both would constitute an Event of Default, nor does it obligate the Bank to
agree to any further modifications to the Credit Agreement or any other Loan
Document or constitute a waiver of any of the Bank's other rights or remedies.

         9. Release and Indemnity. Recognizing and in consideration of the
Bank's agreement to the amendments set forth herein, the Borrower hereby waives
and releases the Bank and its officers, attorneys, agents, and employees from
any liability, suit, damage, claim, loss or expense of any kind or nature
whatsoever and howsoever arising the Borrower ever had or now has against any of
them arising out of or relating to the Bank's acts or omissions with respect to
this Amendment, the Credit Agreement, the other Loan Documents or any other
matters described or referred to herein or therein. The Borrower further hereby
agrees to indemnify and hold the Bank and its officers, attorneys, agents and
employees harmless from any loss, damage, judgment, liability or expense
(including counsel fees) suffered by or rendered against the Bank on account of
anything arising out of this Amendment, the Credit Agreement, the other Loan
Documents or any other document delivered pursuant thereto up to and including
the date hereof; provided that, the Borrower shall not shall have any obligation
hereunder to the Bank with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Bank.

         10. Severability. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         11. Miscellaneous.

                  (a) Expenses. The Borrower agrees to pay all of the Bank's
out-of-pocket fees and expenses incurred in connection the preparation,
negotiation and execution of this Amendment and the other documents executed in
connection.



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                  (b) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

                  (c) Successor and Assigns. The terms and provisions of this
Amendment shall be binding upon and shall inure to the benefit of the Borrower
and the Bank and their respective successors and assigns.

                  (d) Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which shall constitute one and the same instrument.

                  (e) Headings. The headings of any paragraph of this Amendment
are for convenience only and shall not be used to interpret any provision
hereof.

                  (f) Modifications. No modification hereof or any agreement
referred to herein shall be binding or enforceable unless in writing and signed
on behalf of the party against whom enforcement is sought.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.



                                            ENVIRONMENTAL TECTONICS CORPORATION

                                            By: /s/ Duane D. Deaner
                                            Name: Duane D. Deaner
                                            Title: Chief Financial Officer


                                            PNC BANK, NATIONAL ASSOCIATION

                                            By: /s/ Jeffrey M. Prickitt
                                            Name: Jeffrey M. Prickitt
                                            Title: Assistant Vice-President


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                          ACKNOWLEDGMENT AND AGREEMENT


         The undersigned acknowledges the provisions of the foregoing Waiver and
Amendment to Credit Agreement (the "Amendment") between Environmental Tectonics
Corporation and PNC Bank, National Association (the "Lender") and confirms and
agrees that his obligations under that certain Limited Guaranty Agreement dated
as of August 24, 2004, in favor of the Lender shall be unimpaired by the
Amendment and are hereby ratified and confirmed in all respects after giving
effect to the Amendment.





                                           By:/s/ H.F. Lenfest


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