Common use of Facility and Use of Proceeds Clause in Contracts

Facility and Use of Proceeds. This is a committed revolving line of credit under which the Borrower may request and the Bank, subject to the terms and conditions of this letter, will make advances to the Borrower from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $15,000,000 (the “Line of Credit” or the “Loan”). The “Expiration Date” means June 30, 2009, or such later date as may be designated by the Bank by written notice to the Borrower. Advances under the Line of Credit will be used for working capital or other general business purposes of the Borrower. The Borrower may request that the Bank, in lieu of cash advances, issue standby letters of credit (individually, a “Letter of Credit” and collectively the “Letters of Credit”) having expiration dates not later than one year after the Expiration Date. The existing Letters of Credit heretofore issued by the Bank and listed on Schedule I (the “Existing Letters of Credit”) hereto shall constitute Letters of Credit for all purposes hereunder. The availability of advances under the Line of Credit shall be reduced by the face amount of each Letter of Credit issued and outstanding (whether or not drawn). Each payment by the Bank under a Letter of Credit shall in Bank’s discretion constitute an advance of principal under the Line of Credit and shall be evidenced by the Note (as defined below). The Letters of Credit shall be governed by the terms of this letter and by a reimbursement agreement, in form and content satisfactory to the Bank, executed by the Borrower in favor of the Bank (the “Reimbursement Agreement”). Each request for the issuance of a Letter of Credit must be accompanied by the Borrower’s execution of an application on the Bank’s standard forms (each, an “Application”), together with all supporting documentation. Each Letter of Credit will be issued in the Bank’s sole discretion and in a form acceptable to the Bank. The Borrower shall pay to the Bank fees on the face amount of each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average daily face amount of each outstanding Letter of Credit multiplied by (x) 1.00% per annum in the case of Existing Letters of Credit and (y) .90% per annum in the case of Letters of Credit issued after the date hereof, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each fiscal quarter and on the Expiration Date, Environmental Tectonics Corporation July 31, 2007 Page 2 provided that in no event shall such fees for any Letter of Credit be less than the standard minimum amount charged for letters of credit issued by the Bank from time to time for its customers, together with such other customary issuance fees, commissions and expenses therefor as shall be required by the Bank. This letter is not a pre-advice for the issuance of a letter of credit and is not irrevocable.

Facility and Use of Proceeds. This is a committed revolving line of credit under which the Borrower Borrowers may request and the Bank, subject to the terms and conditions of this letterLetter Agreement, will make advances to the Borrower Borrowers from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $15,000,000 200,000 (the “"Line of Credit” " or the “"Loan”"). The “"Expiration Date” " means June September 30, 20092004, or such later date as may be designated by the Bank by written notice to the BorrowerBorrowers. Advances under the Line of Credit will be used for working capital or other general business purposes of the BorrowerBorrowers. The Borrower Borrowers may request that the Bank, in lieu of cash advances, issue standby letters of credit (individually, a “"Letter of Credit” " and collectively the “"Letters of Credit”") under the Line of Credit having expiration dates not later than to exceed one (1) year after from the Expiration Date. The existing Letters date of Credit heretofore issued by the Bank and listed on Schedule I (the “Existing Letters of Credit”) hereto shall constitute Letters of Credit for all purposes hereunderissuance. The availability of advances under the Line of Credit shall be reduced by the face amount of each Letter of Credit issued and outstanding (whether or not drawn). Each payment by the Bank under a Letter of Credit shall in the Bank’s 's discretion constitute an advance of principal under the Line of Credit and shall be evidenced by the Note (as defined below). The Letters of Credit shall be governed by the terms of this letter and by a one or more reimbursement agreementagreements, in form and content satisfactory to the Bank, executed by the Borrower Borrowers in favor of the Bank (collectively, the “"Reimbursement Agreement”"). Each request for the issuance of a Letter of Credit must be accompanied by the Borrower’s Borrowers' execution of an application on the Bank’s 's standard forms (each, an “"Application”"), together with all supporting documentation. Each Letter of Credit will be issued in the Bank’s 's sole discretion and in a form acceptable to the Bank. The Borrower Borrowers shall pay to the Bank fees on a Letter of Credit fee in an amount equal to 2.25% per annum of the face amount of each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or terminationCredit, equal to the average daily face amount of each outstanding Letter of Credit multiplied by (x) 1.00% per annum in the case of Existing Letters of Credit and (y) .90% per annum in the case of Letters of Credit issued after the date hereof, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to which fee shall be payable quarterly in arrears on the first day of each fiscal quarter and on the Expiration Date, Environmental Tectonics Corporation July 31, 2007 Page 2 provided that in no event shall such fees for any Letter of Credit be less than the standard minimum amount charged for letters of credit issued by the Bank from time to time for its customerscalendar quarter, together with such other customary issuance fees, commissions and expenses therefor as shall be required by the Bank. This letter is not a pre-advice for the issuance of a letter of credit and is not irrevocable." Sections A(1)(d) and A(1)(e) of the Financial Reporting Covenants section contained in Exhibit A to the Letter Agreement are hereby deleted in their entirety. Section B of Exhibit A to the Letter Agreement is hereby amended and restated in its entirety to read in full as follows:

Facility and Use of Proceeds. This is a committed revolving line of credit ------------------------------- under which the Borrower may request and the Bank, subject to the terms and conditions of this letter, will make advances to the Borrower from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $15,000,000 25,000,000 (the “"Line of Credit” " or the “"Loan”"). The “"Expiration Date” " means June 30December 19, 20092002, or such later date as may be designated by the Bank by written notice to the Borrower. Advances under the Line of Credit will be used for working capital or other general business purposes of the Borrower. The Borrower may request that the Bank, in lieu of cash advances, issue trade and/or standby letters of credit (individually, a “"Letter of Credit” " and collectively the “"Letters of Credit”") under the Line of Credit having expiration dates not later than one year after the Expiration Date. The existing Letters of Credit heretofore issued , unless approved in writing by the Bank Bank, and listed on Schedule I (the “Existing Letters of Credit”) hereto shall constitute Letters of Credit for all purposes hereunderaggregating not more than $2,000,000 in face amount outstanding at any one time. The availability of advances under the Line of Credit shall be reduced by the face amount of each Letter of Credit issued and outstanding (whether or not drawn). Each payment by the Bank under a Letter of Credit shall in the Bank’s 's discretion constitute an advance of principal under the Line of Credit and shall be evidenced by the Line of Credit Note (as defined below). The Letters of Credit shall be governed by the terms of this letter and by a one or more reimbursement agreementagreements, in form and content satisfactory to the Bank, executed by the Borrower in favor of the Bank (collectively, the “"Reimbursement Agreement”"). Each request for the issuance of a Letter of Credit must be accompanied by the Borrower’s 's execution of an application on the Bank’s 's standard forms (each, an “"Application”"), together with all supporting documentation. Each Letter of Credit will be issued in the Bank’s 's sole discretion and in a form acceptable to the Bank. The Borrower shall pay to the Bank fees on the face amount of each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average daily face amount of each outstanding Letter of Credit multiplied by (x) 1.00% per annum in the case of Existing Letters of Credit and (y) .90% per annum in the case of Letters of Credit issued after the date hereof, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each fiscal quarter and on the Expiration Date, Environmental Tectonics Corporation July 31, 2007 Page 2 provided that in no event shall such fees for any Letter of Credit be less than the Bank's standard minimum amount charged for letters of credit issued by the Bank from time to time for its customers, together with such other customary issuance fees, commissions and expenses therefor as shall be required by the Bank. This letter is not a pre-advice for the issuance of a letter of credit and is not irrevocable.

Facility and Use of Proceeds. This is a committed revolving line of credit under which the Borrower may request and the Bank, subject to the terms and conditions of this letter, will make advances to the Borrower from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $15,000,000 (the “Line of Credit” or the “Loan”). The “Expiration Date” means June 30, 2009, or such later date as may be designated by the Bank by written notice to the Borrower. Advances under the Line of Credit will be used for working capital or other general business purposes of the Borrower. The Borrower may request that the Bank, in lieu of cash advances, issue standby letters of credit (individually, a “Letter of Credit” and collectively the “Letters of Credit”) having expiration dates not later than one year after the Expiration DateDate (as hereinafter defined) in an aggregate face amount at any time outstanding not to exceed $5,000,000 (the “Line of Credit”). The existing Letters of Credit heretofore issued by the Bank and listed on Schedule I (the “Existing Letters of Credit”) hereto shall constitute Letters of Credit for all purposes hereunder. The “Expiration Date” means June 30, 2007, or such later date as may be designated by the Bank by written notice to the Borrower. The availability of advances under the Line of Credit shall be reduced by the face amount of each Letter of Credit issued and outstanding (whether or not drawn). Each payment by the Bank under a Letter of Credit shall in Bank’s discretion constitute an advance of principal under the Line of Credit and shall be evidenced by the Note (as defined below). The Letters of Credit shall be governed by the terms of this letter and by a reimbursement agreement, in form and content satisfactory to the Bank, executed by the Borrower in favor of the Bank (the “Reimbursement Agreement”). Each request for the issuance of a Letter of Credit must be accompanied by the Borrower’s execution of an application on the Bank’s standard forms (each, an “Application”), together with all supporting documentation. Each Letter of Credit will be issued in the Bank’s sole discretion and in a form acceptable to the Bank. The Borrower shall pay to the Bank fees on the face amount of each Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, equal to the average daily face amount of each outstanding Letter of Credit multiplied by (x) 1.00% per annum in the case of Existing Letters of Credit and (y) .90% per annum in the case of Letters of Credit issued after the date hereofannum, such fees to be calculated on the basis of a 360-day year for the actual number of days elapsed and to be payable quarterly in arrears on the first day of each fiscal quarter and on the Expiration Date, Environmental Tectonics Corporation July 31, 2007 Page 2 provided that in no event shall such fees for any Letter of Credit be less than the standard minimum amount charged for letters of credit issued by the Bank from time to time for its customers, together with such other customary issuance fees, commissions and expenses therefor as shall be required by the Bank. This letter is not a pre-advice for the issuance of a letter of credit and is not irrevocable.. Environmental Tectonics Corporation November ___, 2006