ENVIRONMENTAL TECONTICS CORPORATION 125 James Way Southampton, PA 18966 August 23, 2007
Exhibit 10.3
ENVIRONMENTAL TECONTICS CORPORATION
000 Xxxxx Xxx
Xxxxxxxxxxx, XX 00000
000 Xxxxx Xxx
Xxxxxxxxxxx, XX 00000
August 23, 2007
X. X. Xxxxxxx
c/o The Xxxxxxx Group, LLC
000 Xxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
c/o The Xxxxxxx Group, LLC
000 Xxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Dear Xxxxx:
In connection with your execution of the Series C Preferred Stock Purchase Agreement, dated as
of August 23, 2007, between Environmental Tectonics Corporation (“ETC”) and you, ETC agrees to
promptly take the following actions with respect to the Statement With Respect to Shares of Series
B Cumulative Convertible Preferred Stock (“Series B Statement With Respect to Shares”) filed with
the Department of State of the Commonwealth of Pennsylvania on April 6, 2006:
1. Section 3(a) of the Series B Statement With Respect to Shares shall be amended to increase
the annual dividend payable upon the Series B Preferred Stock to 10% per annum, which change in
dividend rate shall be effective from the date of this letter up to and including April 6, 2012.
2. Section 4(a) of the Series B Statement With Respect to Shares shall be amended to provide
that you shall have the right to convert the shares of Series B Preferred Stock issuable pursuant
to the Series B Statement With Respect to Shares as of August 23, 2007.
3. Section 7 of the Series B Statement With Respect to Shares shall be amended to provide for
weighted-average anti-dilution protection provided that the addition of such anti-dilution
protection is deemed acceptable to the American Stock Exchange (or in the event that ETC’s common
stock is no longer listed for trading on the American Stock Exchange). ETC agrees to negotiate
with the American Stock Exchange to add such anti-dilution protection.
4. Section 8 of the Series B Statement With Respect to Shares shall be deleted and,
accordingly, ETC shall no longer have the right to redeem the shares of Series B Preferred Stock
issued to you pursuant to the Series B Statement With Respect to Shares. ETC agrees to refrain
from redeeming any shares of Series B Preferred Stock prior to the effective date of an amendment
to the Series B Statement With Respect to Shares.
In addition, ETC agrees to take action to amend the Series C Cumulative Convertible
Participating Preferred Stock Statement with Respect to Shares to provide weighted average
anti-dilution protection provided that such protection is deemed acceptable to the American Stock
Exchange (or in the event that ETC’s common stock is no longer listed for trading on the American
Stock Exchange). ETC agrees to negotiate with the American Stock Exchange to add such
anti-dilution protection.
If the foregoing is acceptable to you, please acknowledge your acceptance of the terms of this
letter in the space indicated below.
Very truly yours,
Xxxxx X. Xxxxxx
Chief Financial Officer
Chief Financial Officer
Acknowledged and Agreed as of
August 23, 2007
August 23, 2007
X. X. Xxxxxxx
