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 Loan Documents (the “Financial Statement
Default”). Pursuant to the Borrower’s request, in its letter to the Borrower
dated November 21, 2007, the Bank waived the Financial Statement Default (and
any comparable default in respect of Financial Statements as of any prior fiscal
period), provided that the Borrower delivered to the Bank its restated Financial
Statements for the fiscal year ended February 23, 2007 no later than January 31,
2008 (the “Financial Statement Delivery Date”). The Borrower has requested that
the Financial Statement Delivery Date be extended to May 31, 2008 to enable the
Borrower to complete such restated Financial Statements. The Bank hereby agrees
that the Financial Statement Delivery Date is changed to May 31, 2008. Failure
to deliver such Financial Statements by the Financial’ Statement Delivery Date
as so changed shall constitute an Event of Default. The Borrower acknowledges
and agrees that the foregoing shall not be deemed to operate as a, or obligate
the Bank to grant any, further extension of the Financial Statement Delivery
Date.
     The Bank has also agreed, at the Borrower’s request, to amend the
provisions of Section 1 of the Credit Agreement to provide that the fee on each
Existing Letter of Credit, which has been or is renewed after July 31, 2007,
shall, effective as of the date of such renewal, be charged at the rate of .90%
per annum as if it were a Letter of Credit issued after July 31, 2007. All
letters of credit will continue to be subject to the bank’s minimum commission
charge. This amendment shall be given retroactive effect to the extent
applicable.

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Environmental Tectonics Corporation
January 29, 2008
Page 2
     Finally, in consideration of the foregoing agreements, the Borrower agrees
to pay the Bank on the date hereof a fee in the amount of $5,000.
     Please acknowledge your agreement to the foregoing by signing and returning
the enclosed copy of this letter.

            Sincerely,

PNC BANK, NATIONAL ASSOCIATION
      By:   /s/ John M. DiNapoli         John M. DiNapoli        Senior Vice
President     

cc: H. F. Lenfest, as Guarantor
Acknowledged and agreed:
ENVIRONMENTAL TECTONICS CORPORATION

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

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