EIGHTH AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
EIGHTH AMENDMENT TO REVOLVING CREDIT AGREEMENT ("Eighth Amendment"),
dated as of June 5, 2002 between ENVIRONMENTAL TECTONICS CORPORATION (the
"Borrower") and WACHOVIA BANK, NATIONAL ASSOCIATION, successor to First Union
National Bank (the "Bank").
W I T N E S S E T H
WHEREAS, the Borrower and the Bank are parties to a Revolving Credit
Agreement dated as of March 27, 1997 (as amended, the "Agreement") pursuant to
which the Bank agreed to make available to the Borrower certain loans upon the
terms and conditions specified in the Agreement;
WHEREAS, the parties wish to amend certain terms and conditions of the
Agreement, as hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the parties hereto, intending to be legally bound hereby,
agree to amend the Agreement as herein stated.
1. Effect of Prior Agreements.
This Eighth Amendment is intended to amend the Agreement, as it has
been in effect to the date hereof and as it shall be amended on and after the
date hereof. All capitalized terms used herein as defined terms shall have the
meanings ascribed to them in the Agreement unless herein provided to the
contrary.
2. Amendments.
a. All references in the Agreement to the Bank shall be
deemed references to Wachovia Bank, National Association,
successor to First Union National Bank
b. The defined term "Termination Date" set forth in Article
I of the Agreement is hereby amended and restated as
"February 28, 2003".
c. Effective as of July 1, 2002, the defined term
"Applicable Margin" set forth in Article I of the
Agreement shall be deemed to be: (i) with respect to
Adjusted Base Rate Loans, one and one-half percent
(1.5%); and (ii) with respect to Adjusted LIBOR Rate
Loans, four percent (4.0%). References to the Applicable
Margin in Sections 2.1(b)(2) and 2.1A(4) of the Agreement
shall be deemed references to the Applicable Margin for
Adjusted Base Rate Loans.
d. Section C of Schedule 6.16 is amended and restated in its
entirety to read as follows:
C. Funds Flow Coverage Ratio - The Borrower shall have a
Funds Flow Coverage Ratio of not less than: (i) 0.75 as
of the fiscal quarters ending on November 23, 2001,
February 22, 2002, May 24, 2002 and August 23, 2002; and
(ii) 0.90 as of the fiscal quarter ending on November 22,
2002 and each subsequent fiscal quarter end.
3. Conditions Precedent. To induce the Bank to enter into this
Eighth Amendment and to extend the Loans contemplated herein, the Borrower shall
perform the following conditions to the Bank's satisfaction prior to the Bank's
acting in reliance hereon:
a. The Borrower shall deliver, and shall cause each
Guarantor to deliver an executed copy of this Eighth
Amendment, together with all other documents to be
executed in connection herewith;
b. The Borrower shall deliver, an executed Fifth Allonge to
Line of Credit Note;
c. The Borrower shall pay to the Bank an amendment fee of
$60,000;
d. The Borrower shall pay all fees and expenses incurred by
the Bank, including but not limited to legal fees and
expenses, in connection with the preparation and
negotiation of this Amendment.
e. The Borrower shall deliver all other documents and
certificates reasonably requested by the Bank.
4. Reaffirmation. The Borrower hereby affirms and reaffirms to the
Bank all of the terms and conditions of the Agreement and the
other Loan Documents, including, without limitation, the
confession of judgment provision contained therein, and agrees
to abide thereby until all of the Borrower's obligations to the
Bank are satisfied and/or discharged in their entirety.
5. Guarantors' Acknowledgments. Each Guarantor:
a. Hereby acknowledges and consents to the provisions of
this Eighth Amendment and confirms and agrees that its
obligations under its respective Guaranty Agreement shall
be unimpaired hereby and that all terms and conditions of
its respective Guaranty Agreement shall remain in full
force and effect and unmodified hereby and are hereby
ratified and confirmed.
b. Hereby acknowledges the continued existence, validity and
enforceability of its respective Guaranty Agreement,
agrees that the terms, conditions, representations and
covenants of its respective Guaranty Agreement,
including, without limitation, such Guarantor's consent
to the Bank entering a judgment against it by confession,
are binding upon it and certifies that there exists no
defenses, offsets or counterclaims thereto as of the date
hereof subject to limitation set forth therein.
6. Unlimited General Release by Borrower and Guarantors
The Borrower and each of the Guarantors, on behalf of itself and any
person or entity claiming by, through or under it (collectively referred to as
the "Releasors"), hereby unconditionally remises, releases and forever
discharges the Bank and its past and present officers, directors, shareholders,
agents, accountants, auditors, parent corporation, subsidiaries, affiliates,
trustees, administrators, attorneys, predecessors, successors and assigns and,
where applicable, the heirs, executors, administrators, successors and assigns
of any such person or entity, as releasees (collectively referred to as the
"Releasees"), of and from any and all manner of actions, causes of action,
suits, debts, dues, accounts, bonds, covenants, contracts, agreements, promises,
warranties, guaranties, representations, liens, mechanics' liens, judgments,
claims, counterclaims, crossclaims, defenses and/or demands whatsoever,
including, but not limited to, claims for contribution and/or indemnity, whether
now known or unknown, past or present, asserted or unasserted, contingent or
liquidated, at law or in equity, or resulting from any assignment, if any
(collectively referred to as "Claims"), which any of Releasors ever had or now
have against any of the Releasees, for or by reason of any cause, matter or
thing whatsoever, arising from the beginning of time to the date of execution of
this Eighth Amendment, including but not limited to, any and all Claims relating
to or arising from the lending relationship between the Bank and the Borrowers.
The Borrower and each Guarantor warrants and represents that it has not
assigned, pledged, hypothecated and/or otherwise divested itself and/or
encumbered all or any part of the Claims being released hereby and that it
agrees to indemnify and hold harmless any and all of Releasees against whom any
Claim so assigned, pledged, hypothecated, divested and/or encumbered is
asserted.
7. Miscellaneous.
a. All terms, conditions, provisions and covenants in the
Agreement, the Note, the Security Agreement and the
Guaranty Agreements and all other Loan Documents
delivered to the Bank in connection therewith shall
remain unaltered and in full force and effect except as
modified or amended hereby and are hereby ratified and
confirmed.
b. This Eighth Amendment shall be governed and construed
according to the laws of the Commonwealth of
Pennsylvania.
c. This Eighth Amendment shall inure to the benefit of, and
be binding upon, the parties hereto and their respective
successors and permitted assigns.
d. This Eighth Amendment may be executed in one or more
counterparts, and by different parties on different
counterparts, each of which shall be deemed an original,
all of which together shall constitute one and the same
instrument, and in making proof of this Eighth Amendment
it shall be necessary only to produce one counterpart.
e. This Eighth Amendment shall have effect as of its date.
IN WITNESS WHEREOF, the parties hereto have executed this Eighth
Amendment as of the day and year first above written.
BORROWER: ENVIRONMENTAL TECTONICS CORPORATION
By:_____________________________
Title:__________________________
BANK: WACHOVIA BANK, NATIONAL ASSOCIATION,
successor to First Union National Bank
By:_____________________________
Title:__________________________
GUARANTORS: ENVIRONMENTAL TECTONICS CORPORATION
EUROPE) LIMITED
By:_____________________________
Title:__________________________
ETC INTERNATIONAL CORPORATION
By:_____________________________
Title:__________________________
ENTERTAINMENT TECHNOLOGY
CORPORATION
By:_____________________________
Title:__________________________