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EXHIBIT 10.5
 
Third Amended and Restated
 
Reimbursement Agreement
for Letters of Credit
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THIS THIRD AMENDED AND RESTATED REIMBURSEMENT AGREEMENT FOR LETTERS OF CREDIT
(this “Agreement”) is made as of this September 28, 2012, by ENVIRONMENTAL
TECTONICS CORPORATION (the “Obligor”), with an address at 125 James Way,
Southampton, PA 18966 in favor of PNC BANK, NATIONAL ASSOCIATION (the “Bank”),
with an address at 500 First Avenue, Third Floor, Pittsburgh, PA  15219.  The
Obligor and the Bank are parties to that certain Loan Agreement dated as of the
date hereof (the “Loan Agreement”) pursuant to which the Bank has made available
to the Obligor the Line of Credit (as defined in the Loan Agreement).  This
Agreement amends and restates that certain Second Amended and Restated
Reimbursement Agreement for Letters of Credit between the Obligor and the Bank
dated as of July 2, 2009 (as heretofore amended, the “Existing Reimbursement
Agreement”).  From time to time by submitting an application in a form approved
by the Bank (an “Application”), the Obligor or any of its subsidiaries or
affiliates has requested or may hereafter request the Bank to issue one or more
letters of credit (each, a “Credit”) (including the Credits listed on Schedule I
hereto (the “Existing Credits”) heretofore issued under the Existing
Reimbursement Agreement).  The Bank may issue any such Credit, but the Bank
shall have no obligation to do so unless otherwise agreed in writing.  The
Obligor agrees that the following terms and conditions shall apply to any
Credit, including the Existing Credits:
 
1.           Definitions and Interpretation.  (a)  In addition to terms defined
elsewhere in this Agreement: “Bank Affiliate” means any direct or indirect
subsidiary of The PNC Financial Services Group, Inc.; “Base Rate” means a
fluctuating rate per annum equal to the highest of (A) the Prime Rate, (B) the
sum of the Federal Funds Open Rate plus fifty (50) basis points (0.50%), and (C)
the sum of the Daily LIBOR Rate plus one hundred (100) basis points (1.0%), so
long as a Daily LIBOR Rate is offered, ascertainable and not
unlawful.  “Business Day” means any day other than a Saturday, Sunday or other
day on which banks in Pittsburgh, Pennsylvania, or any other city of which the
Bank may give the Obligor notice from time to time, are authorized or required
by law to close; “Daily LIBOR Rate” means for any day, the rate per annum
determined by the Bank by dividing (x) the Published Rate by (y) a number equal
to 1.00 minus the LIBOR Reserve Percentage; “Dollar Equivalent” means, with
respect to an amount in any currency other than U.S. dollars, as of any date,
the amount of U.S. dollars into which such amount in such currency may be
converted at the spot rate at which U.S. dollars are offered by the Bank in
Pittsburgh for such currency at approximately 11:00 a.m., Prevailing Time, on
such date, plus all actual costs of settlement, including amounts incurred by
the Bank to comply with currency exchange requirements of any Governmental
Authority; “Federal Funds Open Rate means for any day, the rate per annum (based
on a year of 360 days and actual days elapsed) which is the daily federal funds
open rate as quoted by ICAP North America, Inc. (or any successor) as set forth
on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on
such other substitute Bloomberg Screen that displays such rate), or as set forth
on such other recognized electronic source used for the purpose of displaying
such rate as selected by the Bank (an “Alternate Source”) (or if such rate for
such day does not appear on the Bloomberg Screen BTMM (or any substitute screen)
or on any Alternate Source, or if there shall at any time, for any reason, no
longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate
Source, a comparable replacement rate determined by the Bank at such time (which
determination shall be conclusive absent manifest error); provided however, that
if such day is not a Business Day, the Federal Funds Open Rate for such day
shall be the “open” rate on the immediately preceding Business Day;
“Governmental Authority” means any de facto or de jure domestic or foreign
government, court, tribunal, agency, or other purported authority; “ISP98” means
the International Standby Practices 1998, and any subsequent official revision
thereof; “LIBOR Reserve Percentage” means the maximum effective per­centage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including, without limitation, supplemental, marginal and emergen­cy reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency liabilities”); “Prevailing Time” means the prevailing time in
Pittsburgh, Pennsylvania (or any other city of which the Bank may have given the
Obligor notice) on the date in question; “Prime Rate” means the interest rate
per annum announced from time to time by the Bank as its then prime rate, which
rate may not be the lowest rate then being charged commercial borrowers by the
Bank; “Published Rate” means the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the
eurodollar rate for a one month period as published in another publication
selected by the Bank); “Taxes” means all taxes, fees, duties, levies, imposts,
deductions, charges or withholdings of any kind required by a Governmental
Authority (other than taxes on the Bank’s net income); and “UCP” means the
Uniform Customs and Practice as most recently published by the International
Chamber of Commerce at the time a Credit is issued.
 
 
 

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(b)         If this Agreement is signed by more than one Obligor, each shall be
deemed to make to the Bank all the representations, warranties and covenants
contained herein, and each shall be jointly and severally liable hereunder. Any
reference herein to this Agreement, an Application, a Credit, or any other
instrument, agreement or document related hereto or thereto shall be deemed to
refer to all amendments, modifications, extensions and renewals hereof and
thereof. Determinations made by the Bank pursuant to the terms hereof shall be
conclusive absent manifest error.
 
2.           Payments.  (a)  The Obligor will pay to the Bank (without
duplication of amounts due under the Loan Agreement or any other Loan Document
(as defined in the Loan Agreement)) the amount to be paid by the Bank with
respect to each draft or other payment demand made under a Credit no later than
10 a.m., Prevailing Time, on the date such payment is to be made by the Bank, or
such earlier time as the Bank may reasonably require.  If a Credit calls for the
delivery by the Bank of an item other than money, the Obligor shall deliver or
cause to be delivered such item to the Bank at such time, in advance of the time
the Bank is to deliver such item, as the Bank may reasonably require.
 
(b)         The Obligor agrees to be primarily liable for payment to the Bank
with respect to any Credit issued by the Bank at the request of any subsidiary
or affiliate of the Obligor.  The Obligor authorizes the Bank to accept
Applications from the Obligor’s subsidiaries and affiliates.
 
(c)         The Obligor will pay to the Bank upon receipt of the Bank’s invoice
therefor (i) interest on all amounts payable to the Bank under Section 2(a) from
the date due to the date of payment, at the Base Rate plus the Applicable Margin
for Base Rate Loans (as defined in the Loan Agreement) then in effect plus three
percent (3%); provided that in no event shall the Obligor pay interest in excess
of the maximum rate permitted by applicable law; (ii) the Bank’s fees as
separately agreed to by the Obligor and the Bank, as well as the customary
commissions and other charges regularly charged by the Bank for letters of
credit; and (iii) all charges and expenses paid or incurred by the Bank or any
of its correspondents in connection with this Agreement or any Credit, including
all reasonable legal fees and expenses, whether of internal or external counsel
to the Bank.  All periodic interest, fees and commissions shall be calculated on
the basis of the actual days elapsed in a 360 day year, and interest shall
continue to accrue at the applicable rate set forth herein whether or not a
default exists or a judgment has been entered.
 
(d)         All amounts payable hereunder by the Obligor shall be paid to the
Bank at its address set forth above or at such other place as the Bank may give
notice from time to time, in immediately available funds in the currency
specified by the Bank, without set off, defense, recoupment, deduction,
cross-claim or counterclaim of any kind; and free and clear of, and without
deduction for, any present or future Taxes.  If the Bank or the Obligor pays any
Taxes, whether or not correctly or legally assessed, the amounts payable
hereunder shall be increased so that, after the payment of such Taxes, the Bank
shall have received an amount equal to the sum the Bank would have received had
no such Taxes been paid.  If any amount payable hereunder is denominated in a
currency other than U.S. dollars, the Obligor shall make payment in such
currency or, at the Bank’s option, shall pay the Dollar Equivalent thereof.  To
effect any payment due hereunder, the Bank may debit any account that the
Obligor may have with the Bank or any Bank Affiliate.
 
 
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3.           Nature of Obligations.  (a)  The Obligor’s obligations to the Bank
under this Agreement are absolute, unconditional and irrevocable, and shall be
paid and performed in accordance with the terms hereof irrespective of any act,
omission, event or condition, including, without limitation (i) the form of, any
lack of power or authority of any signer of, or the lack of validity,
sufficiency, accuracy, enforceability or genuineness of (or any defect in or
forgery of any signature or endorsement on) any draft, demand, document,
certificate or instrument presented in connection with any Credit, or any fraud
or alleged fraud in connection with any Credit or any obligation underlying any
Credit, in each case, even if the Bank or any of its correspondents have been
notified thereof; (ii) any claim of breach of warranty that might be made by the
Obligor or the Bank against any beneficiary of a Credit, or the existence of any
claim, set off, recoupment, counterclaim, cross-claim, defense, or other right
that the Obligor may at any time have against any beneficiary, any successor
beneficiary, any transferee or assignee of the proceeds of a Credit, the Bank or
any correspondent or agent of the Bank, or any other person, however arising;
(iii) any acts or omissions by, or the solvency of, any beneficiary of any
Credit, or any other person having a role in any transaction or obligation
relating to a Credit; (iv) any failure by the Bank to issue any Credit in the
form requested by the Obligor, unless the Bank receives written notice from the
Obligor of such failure within three Business Days after the Bank shall have
furnished the Obligor (by facsimile transmission or otherwise) a copy of such
Credit and such error is material; and (v) any action or omission (including
failure or compulsion to honor a presentation under any Credit) by the Bank or
any of its correspondents in connection with a Credit, draft or other demand for
payment, document, or any property relating to a Credit, and resulting from any
censorship, law, regulation, order, control, restriction, or the like,
rightfully or wrongly exercised by any Governmental Authority, or from any other
cause beyond the reasonable control of the Bank or any of its correspondents, or
for any loss or damage to the Obligor or to anyone else, or to any property of
the Obligor or anyone else, resulting from any such action or omission.
 
(b)          The Bank is authorized to honor any presentation under a Credit
without regard to, and without any duty on the Bank’s part to inquire into, any
transaction or obligation underlying such Credit, or any disputes or
controversies between the Obligor and any beneficiary of a Credit, or any other
person, notwithstanding that the Bank may have assisted the Obligor in the
preparation of the wording of any Credit or documents required to be presented
thereunder or that the Bank may be aware of any underlying transaction or
obligation or be familiar with any of the parties thereto.
 
(c)          The Obligor agrees that any action or omission by the Bank or any
of its correspondents in connection with any Credit or presentation thereunder
shall be binding on the Obligor and shall not result in any liability of the
Bank or any of its correspondents to the Obligor in the absence of the gross
negligence or willful misconduct of the Bank.  Without limiting the generality
of the foregoing, the Bank and each of its correspondents (i) may rely on any
oral or other communication believed in good faith by the Bank or such
correspondent to have been authorized or given by or on behalf of the Obligor;
(ii) may honor any presentation if the documents presented appear on their face
substantially to comply with the terms and conditions of the relevant Credit;
(iii) may honor a previously dishonored presentation under a Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the Bank; (iv) may honor any drawing that is payable
upon presentation of a statement advising negotiation or payment, upon receipt
of such statement (even if such statement indicates that a draft or other
document is being separately delivered), and shall not be liable for any failure
of any such draft or other document to arrive, or to conform in any way with the
relevant Credit; and (v) may pay any paying or negotiating bank claiming that it
rightfully honored under the laws or practices of the place where such bank is
located. In no event shall the Bank be liable to the Obligor for any indirect,
consequential, incidental, punitive, exemplary or special damages or expenses
(including without limitation attorneys’ fees), or for any damages resulting
from any change in the value of any property relating to a Credit.
 
(d)         If the Obligor or any other person seeks to delay or enjoin the
honor by the Bank of a presentation under a Credit, the Bank shall have no
obligation to delay or refuse to honor the presentation until validly so ordered
by a court of competent jurisdiction.
 
 
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4.           Set Off and Security.  As collateral security for the due payment
and performance of the Obligor’s obligations to the Bank hereunder and
otherwise, whether such obligations are absolute or contingent and exist now or
arise after the date hereof, the Obligor grants to the Bank a contractual
possessory security interest in, an unqualified right to possession and
disposition of, and a contractual right of set off against, in each case, to the
fullest extent permitted by law (a) all property relating to any Credit, and all
drafts, payment demands, transport documents, warehouse receipts, documents of
title, policies or certificates of insurance and other documents relating to any
Credit; (b) property in the possession of, on deposit with, or in transit to,
the Bank or any Bank Affiliate, now or hereafter, regardless of how obtained or
held (whether in a general or special account or deposit, jointly or with
someone else, in safekeeping, or otherwise); and (c) the proceeds (including
insurance proceeds) of each of the above (collectively, the “Collateral”).  The
Bank’s rights with respect to the Collateral may be exercised without demand on
or notice to the Obligor.  The Bank shall be deemed to have exercised its right
of set off immediately upon the occurrence of an Event of Default hereunder
without any action of the Bank, although the Bank may enter such setoff on its
books and records at a later time.  The Obligor agrees from time to time to
deliver to the Bank, on demand, such further agreements and instruments, and
such additional security, as the Bank may require to secure, or further secure,
the Obligor’s obligations hereunder.
 
5.           Representations, Warranties, Covenants.  The Obligor represents,
warrants, and covenants that (a) if not a natural person, the Obligor is (i)
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and (ii) duly qualified to do business in those
jurisdictions in which its ownership of property or the nature of its business
activities makes such qualification necessary, except where its failure to be so
qualified would not have a material adverse effect on the Obligor or its
business; (b) the Obligor has the requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder; and all such
action has been duly authorized by all necessary proceedings on the Obligor’s
part, and neither now nor hereafter shall contravene or result in a breach of
(i) any organizational document of the Obligor, (ii) any agreement, document, or
instrument binding on the Obligor or its property, or (iii) any law, treaty,
regulation, or order of any Governmental Authority, or (iv) require any notice,
filing, or other action to or by any Governmental Authority, except, in the case
of clauses (ii) or (iii), for violations or breaches that are immaterial; (c)
all financial statements and other information received from the Obligor by the
Bank prior to the date hereof fairly and accurately present its financial
condition in accordance with generally accepted accounting principles, and no
material adverse change has occurred in the Obligor’s financial condition or
business operations since the date thereof; (d) there are no actions, suits,
proceedings or governmental investigations pending or, to the knowledge of the
Obligor, threatened against the Obligor which could reasonably be expected to
result in a material adverse change in its financial condition or business
operations; (e) the Obligor will promptly submit to the Bank such information
relating to the Obligor’s affairs (including but not limited to annual financial
statements) as the Bank may reasonably request; and (f) the Obligor and each
transaction and obligation underlying each Credit are and shall remain in
compliance in all material respects with all laws, treaties, rules, and
regulations of any Governmental Authority, including, without limitation,
foreign exchange control, United States foreign assets control, and currency
reporting laws and regulations, now or hereafter applicable.
 
6.           Events of Default.  The occurrence of any of the following is an
“Event of Default” hereunder: (a) the Obligor’s failure to pay when due any
obligation to the Bank under this Agreement; (b) the Obligor’s failure to
perform or observe any other term or covenant of this Agreement which failure is
not cured within thirty (30) days after it occurs; (c) any representation or
warranty made or furnished by the Obligor in connection with this Agreement
shall be false, incorrect or incomplete in any material respect when made;
(d) the occurrence of any event of default or default and the lapse of any
notice or cure period under any other debt, liability or obligation of the
Obligor to the Bank; (e) a default with respect to any other indebtedness of the
Obligor for borrowed money having a then-outstanding principal amount in excess
of $100,000, if the effect of such default is to cause or permit the
acceleration of such debt; (f) any assignment by any Obligor for the benefit of
creditors, or any levy, garnishment, attachment or similar proceeding is
instituted against any property of any Obligor held by or deposited with the
Bank; (g)  filing by or against the Obligor or any of its property of any
proceeding relating to bankruptcy, receivership, insolvency, reorganization,
liquidation, conservatorship, or similar proceeding (and, in the case of any
such proceeding instituted against the Obligor, such proceeding is not dismissed
or stayed within 60 days of the commencement thereof); (h) the entry of a final,
non-appealable judgment or judgments, that individually or in the aggregate
exceed $100,000, against the Obligor and the failure of the Obligor to discharge
the judgment within thirty (30) days of the entry thereof; (i) any material
adverse change in the Obligor’s business, assets, operations, financial
condition or results of operations; (j) the death, incarceration, indictment, or
legal incompetency of an individual Obligor or, if the Obligor is a partnership
or limited liability company, the death, incarceration, indictment, or legal
incompetency of any individual general partner or member; (k) the occurrence of
any of the above events with respect to any person which has now or hereafter
guarantied or provided any collateral for any of the Obligor’s obligations
hereunder, provided that no event described in clause (k) hereof shall
constitute an Event of Default if within sixty (60) days of such event the
Obligor shall provide to the Bank a confirmation from such individual’s estate
of its liability for the such obligations or cash collateral in an amount equal
to the amount of credit support provided by such person; or (l) any guarantee,
or any document, instrument or agreement purporting to provide the Bank security
for the Obligor’s obligations hereunder shall be challenged, repudiated, or
unenforceable for any reason.
 
 
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7.           Remedies.  Upon the occurrence of any Event of Default (a) the
amount of each Credit, together with any additional amounts payable hereunder,
shall, at the Bank’s option, become due and payable immediately without demand
upon or notice to the Obligor; (b) the Bank may exercise from time to time any
of the rights and remedies available to the Bank under this Agreement, under any
other agreements or instruments now or in the future evidencing or securing
obligations of the Obligor to the Bank, or under applicable law, and all such
remedies shall be cumulative and not exclusive; and (c) upon request of the
Bank, the Obligor shall promptly deliver to the Bank in immediately available
funds, as collateral for any and all obligations of the Obligor to the Bank, an
amount equal to 105% of the maximum aggregate amount then or at any time
thereafter available to be drawn under all outstanding Credits, and the Obligor
hereby pledges to the Bank and grants to the Bank a security interest in all
such funds as security for such obligations, acknowledges that the Bank shall at
all times have control of such funds and shall be authorized to give entitlement
orders (as defined in the UCC) with respect to such funds, without further
consent of the Obligor or any other person, and agrees promptly to do all
further things that the Bank may deem necessary in order to grant and perfect
the Bank’s security interest in such funds.  The Obligor waives presentment,
protest, dishonor, notice of dishonor, demand, notice of protest, notice of
non-payment, and notice of acceptance of this Agreement, and any other notice or
demand of any kind from the Bank.
 
8.           Subrogation.  The Bank, at its option, shall be subrogated to the
Obligor’s rights against any person who may be liable to the Obligor on any
transaction or obligation underlying any Credit, to the rights of any holder in
due course or person with similar status against the Obligor, and to the rights
of any beneficiary or any successor or assignee of any beneficiary.
 
9.           Indemnification.  The Obligor agrees to indemnify the Bank and each
Bank Affiliate and each of their respective officers, directors, shareholders,
employees and agents (each, an “Indemnified Party”) and to hold each Indemnified
Party harmless from and against any and all claims, liabilities, losses,
damages, Taxes, penalties, interest, judgments, costs and expenses (including
reasonable legal fees and costs, whether of internal or external counsel to the
Bank and all expenses of litigation or preparation therefor), which may be
incurred by or awarded against any Indemnified Party, and which arise out of or
in connection with (a) any Credit, this Agreement, or any suit, action, claim,
proceeding or governmental investigation, pending or threatened, whether based
on statute, regulation or order, or tort, or contract or otherwise, before
Governmental Authority, which arises out of or relates to this Agreement or any
Credit (and irrespective of who may be the prevailing party); (b) any payment or
action taken in connection with any Credit, including, without limitation, any
action or proceeding seeking to restrain any drawing under a Credit or to compel
or restrain any payment or any other action under a Credit or this Agreement
(and irrespective of who may be the prevailing party); (c) the enforcement of
this Agreement or the collection or sale of any property or collateral; and
(d) any act or omission of any Governmental Authority or other cause beyond the
Bank’s reasonable control; except, in each case, to the extent such claim,
liability, loss, damage, Tax, penalty, interest, judgment, cost or expense is
found by a final judgment of a court of competent jurisdiction to have resulted
from the Bank’s gross negligence or willful misconduct.
 
 
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10.         Miscellaneous.  All notices, demands, requests, consents, approvals
and other communications required or permitted hereunder (“Notices”) must be in
writing and will be effective upon receipt.  Notices may be given in any manner
to which the parties may separately agree, including electronic mail.  Without
limiting the foregoing: (i) first class mail, facsimile transmission and
commercial courier service are hereby agreed to as acceptable methods for giving
Notices and (ii) Applications may be submitted electronically via, and in
accordance with the terms and conditions of, the PINACLE Network System (or such
other network system offered by the Bank), if Obligor is an authorized user of
such system or by such other electronic means acceptable to the Bank. Regardless
of the manner in which provided, Notices may be sent to a party’s address as set
forth above or to such other address as any party may give to the other for such
purpose in accordance with this section. The Bank may rely, and shall be
protected in acting or refraining from acting, upon any Notice or Application
believed by the Bank to be genuine and to have been given by the proper party or
parties. No delay or omission on the Bank’s part to exercise any right or power
arising hereunder will impair any such right or power or be considered to be a
waiver of any such right or power, nor will the Bank’s action or inaction impair
any such right or power.  No modification, amendment or waiver of, or consent to
any departure by the Obligor from, any provision of this Agreement, will be
effective unless made in a writing signed by the Bank, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.  If any provision of this Agreement is found to be invalid by a
court, all the other provisions of the Agreement will remain in full force and
effect.  If this Agreement is executed by more than one Obligor, each Obligor
waives any and all defenses to payment and performance hereunder based upon
principles of suretyship, impairment of collateral, or otherwise and, without
limiting the generality of the foregoing, each Obligor consents to: any change
in the time, manner, or place of payment of or in any other term of all or any
of the obligations of any other Obligor hereunder or otherwise, and any exchange
or release of any property or collateral, or the release or other amendment,
extension, renewal, waiver of, or consent to departure from, the terms hereof or
of any guaranty or security agreement or any other agreement related
hereto.  This Agreement will be binding upon and inure to the benefit of the
Obligor and the Bank and their respective heirs, executors, administrators,
successors and assigns; provided, however, that the Obligor may not assign this
Agreement in whole or in part without the Bank’s prior written consent and the
Bank may at any time assign this Agreement in whole or in part.  The Obligor
hereby authorizes the Bank, from time to time without notice to the Obligor, to
record telephonic and other electronic communications of the Obligor and provide
any information pertaining to the financial condition, business operations or
creditworthiness of the Obligor to or at the direction of any Governmental
Authority, to any of the Bank’s correspondents, and any Bank Affiliate, and to
any of its or their directors, officers, employees, auditors and professional
advisors, to any person which in the ordinary course of its business makes
credit reference inquiries, to any person which may succeed to or participate in
all or part of the Bank’s interest hereunder, and as may be necessary or
advisable for the preservation of the Bank’s rights hereunder.  The Bank
acknowledges that Obligor is a publicly traded company and the Bank understands
and will comply with its obligations under applicable securities laws with
regard to material non-public information of Obligor provided hereunder to the
Bank (or any other person described in the preceding sentence).  This is a
continuing Agreement and shall remain in full force and effect until no
obligations of the Obligor and no Credits exist hereunder; provided, however,
that termination of this Agreement shall not release the Obligor from any
payment or performance that is subsequently rescinded or recouped, and the
obligation to make any such payment or performance shall continue until paid or
performed as if no such payment or performance ever occurred.  Provisions
concerning payment, indemnification, increased costs, Taxes, immunity, and
jurisdiction shall survive the termination of this Agreement.
 
11.         Waiver of Immunity.  The Obligor acknowledges that this Agreement is
entered into, and each Credit will be issued, for commercial purposes and, if
the Obligor now or hereafter acquires any immunity (sovereign or otherwise) from
the jurisdiction of any court or from any legal process with respect to itself
or any of its property, the Obligor hereby irrevocably waives such immunity.
 
12.         Jurisdiction.  The Obligor hereby irrevocably consents to the
exclusive jurisdiction of any state or federal court for the county or judicial
district in the Commonwealth of Pennsylvania where the Bank’s office set forth
above is located; provided that nothing contained in this Agreement will prevent
the Bank from bringing any action, enforcing any award or judgment, or
exercising any right against the Obligor individually, against any security, or
against any property of the Obligor within any other county, state or other
foreign or domestic jurisdiction.  The Obligor agrees that the venue provided
above is the most convenient forum for the Bank and the Obligor.  The Obligor
waives any objection to venue and any objection based on a more convenient forum
in any action under this Agreement.
 
 
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13.         WAIVER OF JURY TRIAL.  THE OBLIGOR IRREVOCABLY WAIVES ALL RIGHTS THE
OBLIGOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS AGREEMENT, ANY CREDIT, ANY DOCUMENTS EXECUTED IN
CONNECTION WITH THIS AGREEMENT OR ANY CREDIT, OR ANY OBLIGATION OR TRANSACTION
UNDERLYING ANY OF THE FOREGOING.  THE OBLIGOR ACKNOWLEDGES THAT THIS WAIVER IS
KNOWING AND VOLUNTARY.
 
14.         Governing Law.  This Agreement and each Credit shall be interpreted,
construed, and enforced according to (a) the laws of the Commonwealth of
Pennsylvania, including, without limitation, the Uniform Commercial Code (“UCC;”
with the definitions of Article 5 of the UCC controlling over any conflicting
definitions in other UCC Articles); and (b) the UCP or the ISP98, as set forth
in each Credit, which are, as applicable, incorporated herein by reference and
which shall control (to the extent not prohibited by the law referred to in (a))
in the event of any inconsistent provisions of such law.  In the event that a
body of law other than that set forth above is applicable to a Credit, the
Obligor shall be obligated to pay and reimburse the Bank for any payment made
under such Credit if such payment is, in the Bank’s judgment, justified under
either the law governing this Agreement or the law governing such Credit.

[signature page follows]
 
 
- 7 -

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ENVIRONMENTAL TECTONICS CORPORATION
             
By:
         
Print Name:
         
Title:
 

 
 

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SCHEDULE I
 
Existing Letters of Credit
 
L/C Number
 
Description
 
Amount
 
Open Date
 
Exp. Date
18117636-00-00  
Bid Bond
  $ 100,000.00  
07/13/12
 
10/09/12
18117729-00-00  
ADMS
    72,320.00  
07/10/12
 
10/19/12
S262405PHL
 
Maintenance
    47,560.00  
11/25/03
 
11/09/12
S259738PHL
 
C-130 Repairs
    43,190.00  
08/08/03
 
12/30/12
18104493-00-00  
Sterilizer
    249,600.00  
04/12/07
 
02/28/13
18109685-00-00  
Maintenance
    37,051.52  
06/04/08
 
08/12/13
18110104-00-00  
ADMS
    286,250.00  
07/22/08
 
08/30/13
18113665-00-00  
Maintenance
    40,612.72  
08/23/10
 
05/12/14
Total
      $ 876,584.24        

 
 

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