Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the 30th day of June,
2006 (this “Agreement”), by and between BUTLER INTERNATIONAL, INC., a Maryland
corporation (“Parent”), and LEVINE LEICHTMAN CAPITAL PARTNERS III, L.P., a
California limited partnership (“Purchaser”).

R E C I T A L S

A.           Parent and Purchaser, amongst others, are parties to that certain
Securities Purchase Agreement dated as of June 30, 2006 (as amended, modified or
supplemented from time to time, the “Securities Purchase Agreement”), pursuant
to which the Company and Parent, as applicable, are issuing to Purchaser, and
Purchaser is purchasing from the Company and the Parent, as applicable, the
Securities, respectively, all on the terms and subject to the conditions set
forth therein. Among other things, the Parent is issuing and selling to
Purchaser the Warrant.

B.           The Parent, Purchaser and certain other Persons are concurrently
entering into that certain Investor Rights Agreement dated as of June 30, 2006
(as amended, modified or supplemented from time to time, the “Investor Rights
Agreement”). The execution and delivery of this Agreement by the Parent is
required by the Investors Rights Agreement.

A G R E E M E N T

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1.            DEFINITIONS. Unless otherwise indicated, all capitalized terms not
otherwise defined herein shall have the meaning set forth in the Securities
Purchase Agreement. In addition, the following terms shall have the following
meanings:

“Commission” shall mean the Securities and Exchange Commission, or any successor
federal agency.

“Common Stock” shall mean the common stock, $0.001 par value per share, of the
Parent, and any securities issued in exchange for or in replacement of such
stock.

“Parent” shall have the meaning set forth in the preamble.

“Demanding Holders” shall mean Purchaser only or, if Purchaser does not hold a
majority of the Registrable Securities at any time, the holders of greater than
fifty percent (50.0%) of the outstanding Registrable Securities.

“Demand Registration” shall have the meaning specified in Section 2.1(a).

 

 

--------------------------------------------------------------------------------

 

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.

“Indemnified Party” shall have the meaning specified in Section 4.3.

“Indemnifying Party” shall have the meaning specified in Section 4.3.

“Indemnitee” shall have the meaning specified in Section 4.1.

“Purchaser” shall have the meaning set forth in the preamble.

“Maximum Number of Shares” shall have the meaning specified in Section 2.1(d).

“Piggy Back Registration” shall have the meaning specified in Section 2.2(a).

“Register,” “registered” and “registration” shall mean a registration effected
by preparing and filing a registration statement or similar document in
compliance with the requirements of the Securities Act and such registration
statement becoming effective.

“Registrable Securities” shall mean (i) the Warrant Shares, (ii) any other
shares of Capital Stock of the Parent acquired by Purchaser after the date
hereof, whether by purchase, by exercise, exchange or conversion of any Equity
Rights or otherwise, and (iii) any shares of Capital Stock or other securities
of the Parent issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the Warrant Shares or such other shares of
Capital Stock or other securities of the Parent. A security shall cease to be a
Registrable Security when (a) a Registration Statement covering such Registrable
Security shall have been declared effective under the Securities Act and such
Registrable Security shall have been sold in accordance with such Registration
Statement; (b) such Registrable Security shall have been distributed and sold to
the public pursuant to Rule 144 (or any successor rule or regulation)
promulgated under the Securities Act; or (c) such Registrable Security shall
have ceased to be outstanding.

“Registration Statement” means a registration statement filed by the Parent with
the Commission in compliance with the Securities Act for a public offering and
sale of its Common Stock (other than a registration statement on Form S-8 or
Form S-4, or their successors, or any registration statement covering only
securities proposed to be issued in exchange for securities or assets of another
entity).

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

“Securities Purchase Agreement” shall have the meaning set forth in the
recitals.

 

 

 

2

 

--------------------------------------------------------------------------------

 

 

“Underwriter” shall mean a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer’s market making activities.

“Warrant Shares” shall mean the shares of Common Stock issued or issuable upon
exercise of the Warrant, and the holders of the Warrant or any portion thereof
shall be deemed to be the holders of the Warrant Shares issuable upon the
exercise thereof.

“Warrant” shall mean Warrant No. LLCP-1 issued by the Parent to Purchaser on
June 30, 2006 and, in addition, shall include (i) any new warrant or warrants
issued upon the transfer of all or any portion of the warrants issued pursuant
to the Securities Purchase Agreement and (ii) any warrant or warrants issued
upon the further transfer, division or combination of any such new warrant or
warrants.

 

2.

REGISTRATION RIGHTS.

 

 

2.1.

Demand Registration.

(a)          Request for Registration. At any time, the Demanding Holders may
request in writing (a “Demand Registration”) that the Parent effect the
registration under the Securities Act of all or any portion of the Registrable
Securities. Any request for a Demand Registration shall specify the number of
shares of Registrable Securities proposed to be sold and the intended method(s)
of distribution thereof. Upon any such request, the Demanding Holders shall be
entitled to have Registrable Securities included in the Demand Registration,
subject to Section 2.1(d) and the provisos set forth in Section 3.1(a). The
Parent shall not be obligated to effect more than one (1) Demand Registration
under this Section 2.1(a).

(b)          Effective Registration. A registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Parent
has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that, after such Registration Statement has been
declared effective, if the offering of Registrable Securities pursuant to a
Demand Registration does not occur by reason of any stop order, injunction or
other order or requirement of the Commission or any other Governmental
Authority, such Demand Registration shall not be deemed to have been made for
purposes of this Section 2.1.

(c)          Underwritten Offering. If the Demanding Holders wish to distribute
Registrable Securities covered by its (or their, as the case may be) request by
means of an underwritten offering, it (or they, as the case may be) shall so
advise the Parent as a part of the request made pursuant to Section 2.1(a). The
Demanding Holders shall have the right, but not the obligation, to select one or
more firms of investment bankers to act as the managing Underwriter or
Underwriters in connection with such offering and may select any additional
managers to be used in connection with such offering.

(d)          Reduction of Offering. If the managing Underwriter or Underwriters
for a Demand Registration that is to be an underwritten offering advises the

 

 

3

 

--------------------------------------------------------------------------------

 

Parent and the Demanding Holders in writing that the dollar amount or number of
shares of Registrable Securities which the Demanding Holders desire to sell,
taken together with all other shares of Common Stock or other securities which
the Parent desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to the piggy-back registration rights,
if any, which other stockholders of the Parent desire to sell, exceeds the
maximum dollar amount or maximum number of shares that can be sold in such
offering without adversely affecting the proposed offering price, the timing,
the distribution method or the probability of success of such offering (the
“Maximum Number of Shares”), then the Parent shall include in such registration:

(i)           first, the Registrable Securities as to which Demand Registration
has been requested by the Demanding Holders (pro rata in accordance with the
number of shares of Registrable Securities held by each Demanding Holder,
regardless of the number of shares of Registrable Securities which the Demanding
Holder has requested be included in such registration) that can be sold without
exceeding the Maximum Number of Shares;

(ii)          second, to the extent the Maximum Number of Shares has not been
reached under the foregoing clause (i), the shares of Common Stock or other
securities that the Parent desires to sell that can be sold without exceeding
the Maximum Number of Shares;

(iii)        third, to the extent the Maximum Number of Shares has not been
reached under the foregoing clauses (i) and (ii) above, the shares of Common
Stock for the account of other stockholders of the Parent that the Parent is
obligated to register (to be allocated among such other stockholders requesting
inclusion in such registration pursuant to such agreements pro rata in
accordance with the number of shares of Common Stock with respect to which such
other stockholders have the right to request such inclusion under such
agreements, regardless of the number of shares which such other stockholder has
actually requested be included in such registration) that can be sold without
exceeding the Maximum Number of Shares; and

(iv)         fourth, to the extent the Maximum Number of Shares has not been
reached under the foregoing clauses (i), (ii) and (iii) above, the shares of
Common Stock that other stockholders of the Parent desire to sell that can be
sold without exceeding the Maximum Number of Shares.

(e)          Withdrawal. The Demanding Holders or any one of them may, by
written notice furnished to the Parent prior to the effective date of a
Registration Statement, withdraw from any proposed offering relating to a Demand
Registration for any reason. In the case of any such withdrawal, no Demanding
Holder shall be obligated to pay any of the expenses incurred in connection with
such Registration Statement or such Demand Registration and no Demand
Registration shall be deemed to have been made for purposes of Section 2.1(a).

 

 

 

4

 

--------------------------------------------------------------------------------

 

 

 

2.2.

Piggy Back Registration.

(a)          Piggy Back Rights. If at any time or from time to time the Parent
proposes to file a Registration Statement under the Securities Act with respect
to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the
Parent for its own account or by stockholders of the Parent for their own
account (or by the Parent and by stockholders of the Parent) (other than a
Registration Statement (i) on Form S-4 or S-8 (or any substitute or successor
form that may be adopted by the Commission), (ii) filed in connection with any
employee stock option or other benefit plan, (iii) for an exchange offer or
offering of securities solely to the Parent’s existing stockholders or (iv) for
a dividend reinvestment plan), the Parent shall (x) give written notice of such
proposed filing to the holders of Registrable Securities as soon as practicable
but in no event less than thirty (30) days before the anticipated filing date,
which notice shall describe the amount and type of securities to be included in
such offering, the intended method(s) of distribution, and the name of the
proposed managing Underwriter or Underwriters, if any, of the offering; and
(y) offer to the holders of Registrable Securities in such notice the
opportunity to register such number of shares of Registrable Securities as such
holders may request in writing within fifteen (15) days following receipt of
such notice (a “Piggy Back Registration”). The Parent shall cause such
Registrable Securities to be included in such registration and shall use its
best efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy Back Registration to be included on the same terms and
conditions as any similar securities of the Parent and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended
method(s) of distribution thereof. The provisions of this Section 2.2 shall
apply to such registration.

(b)          Reduction of Offering. If the managing Underwriter or Underwriters
for a Piggy Back Registration that is to be an underwritten offering of shares
for the Parent’s account advises the Parent and the holders of Registrable
Securities in writing that the dollar amount or number of shares of Common Stock
which the Parent desires to sell, taken together with the Registrable Securities
as to which registration has been requested hereunder and the shares of Common
Stock, if any, as to which registration has been requested pursuant to the
piggy-back registration rights which other stockholders of the Parent desire to
sell, exceeds the Maximum Number of Shares, then the Parent shall include in
such registration:

(i)           first, the shares of Common Stock or other securities that the
Parent desires to sell that can be sold without exceeding the Maximum Number of
Shares;

(ii)          second, to the extent the Maximum Number of Shares has not been
reached under the foregoing clause (i) above, the Registrable Securities as to
which registration has been or may be requested under this Section 2.2 (pro rata
in accordance with the number of Registrable Securities held by each such
Person) that can be sold without exceeding the Maximum Number of Shares; and

 

 

 

5

 

--------------------------------------------------------------------------------

 

 

(iii)        third, to the extent the Maximum Number of Shares has not been
reached under the foregoing clauses (i) and (ii)  above, the shares of Common
Stock, if any, as to which registration has been requested pursuant to the
piggy-back registration rights of other stockholders of the Parent (to be
allocated among such other stockholders requesting inclusion in such
registration pursuant to such agreements pro rata in accordance with the number
of shares of Common Stock with respect to which such other stockholders have the
right to request such inclusion under such agreements, regardless of the number
of shares which such other stockholder has actually requested be included in
such registration) that can be sold without exceeding the Maximum Number of
Shares; and

(iv)         fourth, to the extent the Maximum Number of Shares has not been
reached under the foregoing clauses (i), (ii) and (iii) above, the shares of
Common Stock that other stockholders of the Parent desire to sell that can be
sold without exceeding the Maximum Number of Shares.

(c)          Withdrawal. Any holder of Registrable Securities may withdraw such
holder’s request for inclusion of Registrable Securities in any Piggy Back
Registration by giving written notice to the Parent of its election to withdraw
prior to the effectiveness of the Registration Statement. The Parent may also
elect to withdraw a Registration Statement at any time prior to the
effectiveness of the Registration Statement. Notwithstanding any such
withdrawal, the Parent shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy Back Registration as
provided in Section 3.3.

2.3.        Registrations on Form S-3. If the registration of Registrable
Securities is permitted to be made on a Registration Statement on Form S-3 (or
any similar short-form registration which may be available at such time) (a
“Form S-3”), the holders of Registrable Securities may at any time request in
writing that the Parent register the resale of any or all of its or their
Registrable Securities on a Form S-3. Upon receipt of a written request for
registration of Registrable Securities on Form S-3 (a “Form S-3 Notice”), the
Parent will promptly (but not later than three (3) Business Days after receipt
of such Form S-3 Notice) furnish written notice of the proposed registration to
all other holders of Registrable Securities, if any. The Parent shall cause to
be filed with the Commission, as soon as practicable after receipt of a Form S-3
Notice but not later than thirty (30) days thereafter, a Form S-3 covering all
of such holder’s or holders’ Registrable Securities as specified in the Form S-3
Notice and all of the Registrable Securities of any other holders who join in
such request as specified in a written request given within fifteen (15) days
after receipt of such written notice from the Parent. In addition, the Parent
shall use its best efforts to cause each such Form S-3 to become effective as
soon as practicable within the ninety (90) day period after the date of receipt
by the Parent of the relevant Form S-3 Notice. The Parent shall use its best
efforts to maintain each Form S-3 continuously effective, supplemented and
amended until the Registrable Securities covered thereby have been sold. No
registration effected pursuant to this Section 2.3 shall be counted as a Demand
Registration effected pursuant to Section 2.1.

 

 

 

6

 

--------------------------------------------------------------------------------

 

 

2.4.         Purchase (and Exercise) of the Warrant by the Underwriters.
Notwithstanding any other provision of this Agreement to the contrary, in
connection with any Demand Registration or Piggy-Back Registration which is to
be an underwritten offering, to the extent all or any portion of the Registrable
Securities to be included in such registration consist of Warrant Shares, the
holders of such Registrable Securities may require that the Underwriter or
Underwriters purchase (and exercise) the Warrant or any portion thereof rather
than require the holders of the Registrable Securities to exercise the Warrant
or portion thereof in connection with such registration, unless the Underwriters
inform such holders that such a purchase and exercise of the Warrant will
materially and adversely affect the proposed offering. The Parent shall take all
such action and provide all such assistance as may be reasonably requested by
the holders of Registrable Securities to facilitate any such purchase (and
exercise) of the Warrant agreed to by the Underwriter or Underwriters, including
issuing the Warrant Shares or any portion thereof to be issued within such time
period as will permit the Underwriters to make and complete the distribution
contemplated by the underwriting.

2.5        Private Placement Resales. The Parent covenants that it shall take
all actions as the holders of Registrable Securities may reasonable request, all
to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitations of available exemptions from such registration, including, without
limitation, (a) entering into customary agreements as are reasonably required in
order to expedite or facilitate the disposition of the Registrable Securities,
including, without limitation, indemnification arrangements with placement or
sales agents and the holders comparable to Section 4 hereof, (b) making
available members of management of the Parent, who shall cooperate fully in any
such offering, which cooperation shall include, without limitation,
participation in the preparation of offering materials and related documents and
participation in meetings with placement or sales agents, attorneys, accountants
and potential purchasers, (c) making available for inspection by holders of
Registrable Securities any placement or sales agent, attorney, accountant or
other professional retained by any holder of Registrable Securities, all
financial and other records, pertinent documents and properties of the Parent,
and to cause the Parent’s officers, directors, and employees to supply all
information requested by any of them in connection with such offering, provided,
however, that the holders of Registrable Securities making a request for
inspection pursuant to this subsection (c) and the Parent shall enter into a
confidentiality agreement reasonably agreed upon by the parties thereto prior to
such inspection and (d) cooperating in the sale process by following procedures
comparable to those outlined in Section 3 hereof as reasonably modified to
accommodate a private placement sale process.

 

3.

REGISTRATION PROCEDURES.

3.1.         Filings; Information. Whenever the Parent is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Parent
shall use its best efforts to effect the registration and sale of such
Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such
request:

 

 

 

7

 

--------------------------------------------------------------------------------

 

 

(a)          Filing Registration Statement. The Parent shall, as expeditiously
as possible, prepare and file with the Commission, within sixty (60) days after
receipt of a request for a Demand Registration pursuant to Section 2.1, a
Registration Statement on any form for which the Parent then qualifies or which
counsel for the Parent shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use
its best efforts to cause such Registration Statement to become and remain
effective for the period required by Section 3.1(c); provided, however, that the
Parent shall have the right to defer such registration for up to ninety (90)
days if the Parent shall furnish to the holders of Registrable Securities a
certificate signed by the President and Chief Executive Officer of the Parent
stating that, in the good faith judgment of the Board of Directors of the
Parent, it would be materially detrimental to the Parent and its stockholders
for such Registration Statement to be effected at such time; provided further,
however, that in the event the Parent elects to exercise such right with respect
to any registration, it shall not have the right to exercise such right again
prior to the date which is twelve (12) months after the date on which the
Registration Statement relating to such deferred registration is declared
effective. For the sake of clarity, (i) the Parent may exercise its right to
defer a Demand Registration for ninety (90) days under this Section 3.1(a) if
the Parent has begun the process of publicly offering its Common Stock and (ii)
Purchaser may exercise its rights under Section 2.2 during the ninety (90) day
period the Parent may defer a Demand Registration under this Section 3.1(a).

(b)          Copies. The Parent shall, prior to filing a Registration Statement
or prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus), and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.

(c)          Amendments and Supplements. The Parent shall prepare and file with
the Commission such amendments, including post effective amendments, and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective and
in compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement (which period shall not exceed the sum of one
hundred eighty (180) days plus any period during which any such disposition is
interfered with by any stop order, injunction or other order or requirement of
the Commission or any governmental agency or court) or such securities have been
withdrawn.

(d)          Notification. After the filing of a Registration Statement, the
Parent shall promptly, and in no event more than two (2) Business Days, notify
the holders

 

 

8

 

--------------------------------------------------------------------------------

 

of Registrable Securities included in such registration statement, and confirm
such advice in writing: (i) when such Registration Statement has been filed or
amended or supplemented and becomes effective, (ii) when any post effective
amendment to such Registration Statement becomes effective, (iii) of any stop
order issued or threatened by the Commission (and the Parent shall take all
actions required to prevent the entry of such stop order or to remove it if
entered) and (iv) of any request by the Commission for any amendment or
supplement to such Registration Statement or any prospectus relating thereto or
for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, and promptly make available to the holders
of Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a
Registration Statement or prospectus or any amendment or supplement thereto,
including documents incorporated by reference, the Parent shall furnish to the
holders of Registrable Securities included in such Registration Statement and to
the legal counsel for any such holders, copies of all such documents proposed to
be filed sufficiently in advance of filing (and in no event less than three (3)
Business Days prior to filing) to provide such holders and legal counsel with a
reasonable opportunity to review such documents and comment thereon, and the
Parent shall not file any Registration Statement or prospectus or amendment or
supplement thereto, including documents incorporated by reference, to which such
holders or their legal counsel shall object.

(e)          State Securities Laws Compliance. The Parent shall use its best
efforts to (i) register or qualify the Registrable Securities covered by the
Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may request and (ii) cause such Registrable Securities covered by
the Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Parent and do any and all other acts and things that may be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided, however, that the Parent shall not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3.1(e), or
subject itself to taxation in any such jurisdiction.

(f)           Agreements for Disposition. The Parent shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Parent in any underwriting
agreement which are made to or for the benefit of any Underwriters shall also be
made to and for the benefit of the holders of Registrable Securities included in
such registration statement. No holder of Registrable Securities included in
such registration statement shall be required to make any representations or

 

 

9

 

--------------------------------------------------------------------------------

 

warranties in the underwriting agreement except, if applicable, with respect to
such holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder’s material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such registration statement.

(g)          Cooperation. The President and Chief Executive Officer of the
Parent, the Chief Financial Officer of the Parent, any vice president of the
Parent and any other members of the management of the Parent shall cooperate
fully in any offering of Registrable Securities hereunder, which cooperation
shall include the preparation of the Registration Statement with respect to such
offering and all other offering materials and related documents, and
participation in meetings with Underwriters, attorneys, accountants and
potential investors.

(h)          Records. The Parent shall make available for inspection by the
holders of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional retained by any
holder of Registrable Securities included in such Registration Statement or any
Underwriter, all financial and other records, pertinent corporate documents and
properties of the Parent, as shall be necessary to enable them to exercise their
due diligence responsibility, and cause the Parent’s officers, directors and
employees to supply all information requested by any of them in connection with
such registration statement.

(i)           Opinions and Comfort Letters. The Parent shall furnish to each
holder of Registrable Securities included in any Registration Statement a signed
counterpart, addressed to such holder, of (i) any opinion of counsel to the
Parent delivered to any Underwriter and (ii) any comfort letter from the
Parent’s independent public accountants delivered to any Underwriter. In the
event no legal opinion is delivered to any Underwriter, the Parent shall furnish
to each holder of Registrable Securities included in such Registration
Statement, at any time that such holder elects to use a prospectus, an opinion
of counsel to the Parent to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is
in effect.

(j)           Earnings Statement. The Parent shall comply with all applicable
rules and regulations of the Commission and the Securities Act, and make
available to its stockholders, as soon as practicable, an earnings statement
covering a period of twelve (12) months, beginning within three (3) months after
the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.

(k)          Listing. The Parent shall use its commercially reasonable efforts
to cause all Registrable Securities included in any registration to be listed on
such national securities exchange or otherwise designated for trading in the
same manner as similar securities issued by the Parent are then listed or
designated or, if no such similar securities are then listed or designated, then
on an Acceptable Exchange (as defined in the

 

 

10

 

--------------------------------------------------------------------------------

 

Investor Rights Agreement) or in any other manner satisfactory to the holders of
a majority of the Registrable Securities included in such registration.

3.2.         Obligation to Suspend Distribution. Upon receipt of any notice from
the Parent of the happening of any event of the kind described in
Section 3.1(d)(iv), each holder of Registrable Securities included in any
registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 3.1(d)(iv), and, if so directed by the Parent, each such
holder will deliver to the Parent all copies, other than permanent file copies
then in such holder’s possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice.

3.3.        Registration Expenses. The Parent shall bear all costs and expenses
incurred in connection with any Demand Registration pursuant to Section 2.1, any
Piggy Back Registration pursuant to Section 2.2 and any registration on Form S-3
pursuant to Section 2.3 and all expenses incurred in performing or complying
with its other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including: (i) all registration and filing fees;
(ii) fees and expenses of compliance with state securities or “blue sky” laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities); (iii) printing expenses; (iv) the
Parent’s internal expenses (including all salaries and expenses of its officers
and employees); (v) the fees and expenses incurred in connection with the
listing of the Registrable Securities as required by Section 3.1(k);
(vi) National Association of Securities Dealers, Inc. fees, if any; (vii) fees
and disbursements of counsel for the Parent and fees and expenses for
independent certified public accountants retained by the Parent (including the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 3.1(i)); (viii) the fees and expenses of
any special experts retained by the Parent in connection with such registration;
(ix) the purchase of selling stockholder errors and omissions insurance for the
benefit of Purchaser and (x) all fees and expenses incurred by Purchaser in
connection with their participation in such registration, including the fees and
expenses of Purchaser’s legal counsel, accountants and other experts. The Parent
shall have no obligation to pay any underwriting fees, discounts or selling
commissions attributable to the Registrable Securities being sold by Purchaser,
which expenses shall be borne by Purchaser.

3.4.        Information. The holders of Registrable Securities shall provide
such information as reasonably requested by the Parent in connection with the
preparation of any registration statement, including amendments and supplements
thereto, in order to effect the registration of any Registrable Securities under
the Securities Act pursuant to Section 2.

 

4.

INDEMNIFICATION AND CONTRIBUTION.

4.1.        Indemnification by the Parent. The Parent agrees to indemnify and
hold harmless Purchaser and each other holder of Registrable Securities, and
each of their respective officers, employees, Affiliates (including Levine
Leichtman Capital Partners, Inc.), directors, partners, members, attorneys and
agents, and each Person, if any, who

 

 

11

 

--------------------------------------------------------------------------------

 

controls any of the foregoing and each other holder of Registrable Securities
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) (each, an “Indemnitee”), from and against any expenses, losses,
judgments, claims, damages or liabilities, whether joint or several, arising out
of or based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
prospectus, final prospectus or summary prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arising out of or based upon any omission (or alleged omission) to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Parent of the Securities Act or
any rule or regulation promulgated thereunder applicable to the Parent and
relating to action or inaction required of the Parent in connection with any
such registration; and the Parent shall promptly, but in no event more than five
(5) Business Days after request for payment, pay directly or reimburse each
Indemnitee for any legal and any other expenses reasonably incurred by such
Indemnitee in connection with investigating and defending any such expense,
loss, judgment, claim, damage, liability or action; provided, however, that the
Parent will not be liable in any such case to the extent that any such expense,
loss, claim, damage or liability arises out of or is based upon any untrue
statement or omission made in such Registration Statement, preliminary
prospectus, final prospectus, or summary prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the
Parent, in writing, by such selling holder and stated to be specifically for use
therein. The Parent shall not refuse to enter into an underwriting agreement
with any Underwriter of the Registrable Securities on the basis that the
indemnity provisions therein are unacceptable as long as the terms of such
indemnity provisions are, on the whole, reasonably typical for the type of
underwriting contemplated.

4.2.        Indemnification by Holders of Registrable Securities. Each selling
holder of Registrable Securities will, in the event that any Registrable
Securities held by such selling holder are included in any registration being
effected under the Securities Act pursuant to this Agreement, indemnify and hold
harmless (severally and not jointly) the Parent, each of its directors,
officers, employees, attorneys and agents and each Underwriter (if any), and
each other Person, if any, who controls the Parent or such Underwriter within
the meaning of the Securities Act, against any losses, claims, judgments,
damages or liabilities, whether joint or several, insofar as such losses,
claims, judgments, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement of a material fact contained in
any Registration Statement under which such Registrable Securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission to state a material fact required to be stated therein
or necessary to make the statement therein not misleading, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Parent by such selling holder and stated to be specifically
for use therein, and shall, within five (5) Business Days after a request
therefor, reimburse the Parent, its directors, officers, employees, attorneys
and agents, and each such controlling Person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Notwithstanding anything to
the contrary, in no event shall any holder of

 

 

12

 

--------------------------------------------------------------------------------

 

Registrable Securities be liable or responsible for any amount in excess of the
net proceeds actually received by such holder after Taxes from the sale of
Registrable Securities.

4.3.         Conduct of Indemnification Proceedings. Promptly after receipt by
any Person of any written notice of any loss, claim, damage or liability or any
action in respect of which indemnity may be sought pursuant to Section 4.1 or
4.2, such Person (the “Indemnified Party”) shall, if a claim in respect thereof
is to be made against any other Person for indemnification hereunder, notify
such other Person (the “Indemnifying Party”) in writing of the loss, claim,
judgment, damage, liability or action; provided, however, that the failure by
the Indemnified Party to notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which the Indemnifying Party may have to
such Indemnified Party hereunder, except to the extent the Indemnifying Party is
actually prejudiced by such failure. If the Indemnified Party is seeking
indemnification with respect to any claim or action brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it wishes, jointly with all
other Indemnifying Parties, to assume the defense thereof with counsel
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the
Indemnified Party shall have the right to employ separate counsel (but no more
than one such separate counsel) to represent the Indemnified Party and its
controlling Persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party (which consent shall not be unreasonably withheld), consent to entry of
judgment or effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.

4.4.         Contribution. If the indemnification provided for in the foregoing
Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of
any loss, claim, damage, liability or action referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and any
Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue

 

 

13

 

--------------------------------------------------------------------------------

 

statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such Indemnified Party or such
Indemnifying Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

The parties agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of any loss, claim, damage,
liability or action referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding anything to
the contrary, in no event shall any holder of Registrable Securities be required
to contribute any amount in excess of the net proceeds actually received by such
holder after Taxes from the sale of Registrable Securities which gave rise to
such contribution obligation. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

5.

UNDERWRITING AND DISTRIBUTION.

5.1.        Rule 144. The Parent covenants that it shall file any reports
required to be filed by it under the Securities Act and the Exchange Act and
shall take such further action as the holders of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act, as such Rules may be amended from time to time, or any similar
Rule or regulation hereafter adopted by the Commission. Purchaser hereby
acknowledges its understanding that the Parent is not current with its filings
under the Exchange Act.

5.2.        Restrictions on Sale by the Parent and Others. The Parent agrees
that (a) it will not effect any sale or distribution of any securities similar
to those being registered in accordance with Section 2.1, or any securities
convertible into or exchangeable or exercisable for such securities, during the
ninety (90) days prior to, and during the one hundred eighty (180) day period
commencing on, the effective date of any Demand Registration (except as part of
such Demand Registration to the extent permitted by Section 2.1(d)); and (b) any
agreement entered into after the date hereof pursuant to which the Parent issues
or agrees to issue any privately placed securities shall contain a provision
under which holders of such securities agree not to effect any sale or
distribution of any such securities during the periods described in (a) above,
in each case including a sale pursuant to Rule 144 under the Securities Act
(except as part of any such registration, if permitted); provided, however, that
the provisions of this Section 5.2 shall not prevent the conversion or exchange
of any securities pursuant to their terms into or for other securities and shall
not prevent the issuance of securities by the Parent under any employee benefit,
stock option or stock subscription plans.

 

 

 

14

 

--------------------------------------------------------------------------------

 

 

 

6.

MISCELLANEOUS.

 

 

6.1.

Other Registration Rights.

(a)          The Parent hereby represents and warrants to Purchaser that, except
as set forth in Schedule 6.1(a), (i) no Person has any right to require the
Parent to register any shares its the Capital Stock for sale, or to include any
shares of its Capital Stock, in any registration filed by the Parent for the
sale of shares of Capital Stock for its own account or for the account of any
other Person and (ii) no Person has the right to require the Parent to register
the sale of any shares of the Parent’s capital stock in any Registration
Statement filed by the Parent pursuant to a Demand Registration.

(b)          From and after the date of this Agreement, the Parent shall not,
without the prior written consent of the holders of a majority of the
Registrable Securities, (i) enter into any agreement granting any demand
registration right (i.e., the right to require the Parent to register the sale
of any shares of the Parent’s Capital Stock), (ii) enter into any agreement
granting any piggy-back registration right (i.e., the right to require the
Parent to register the sale of any shares of the Parent’s Capital Stock in any
Registration Statement filed by the Parent for the sale of shares of Capital
Stock for its own account or for the account of any other Person) which is
inconsistent with, equal to or superior to any registration rights granted
hereunder, or which requires the Parent to register the sale of any shares of
the Parent’s Capital Stock in any Registration Statement filed by the Parent
pursuant to a Demand Registration, or (iii) enter into any agreement that
adversely affects the rights granted to the holders of Registrable Securities
hereunder.

6.2.         Successors and Assigns. This Agreement shall inure to the benefit
of, and be binding upon, the parties and their respective successors and
permitted assigns, pursuant to the provisions of this Section 6.2. The rights
and obligations of Purchaser under this Agreement shall be freely assignable in
whole or in part. Each such assignee, by accepting such assignment of the rights
of the assignor hereunder, shall be deemed to have agreed to and be bound by the
obligations of the assignor hereunder. The rights and obligations of the Parent
hereunder may not be assigned or delegated.

6.3.         Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if transmitted by telecopier with
receipt acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

 

 

 

15

 

--------------------------------------------------------------------------------

 

 

If to Purchaser, to:

Levine Leichtman Capital Partners III, L.P.

c/o Levine Leichtman Capital Partners, Inc.

335 North Maple Drive, Suite 240

Beverly Hills, CA 90210

Attention: Arthur E. Levine, President

 

Telephone:

(310) 275-5335

 

Telecopier:

(310) 275-1441

with a copy to:

Bingham McCutchen LLP

355 South Grand Avenue, Suite 4400

Los Angeles, CA 90071

Attention: Richard J. Welch, Esq.

Telephone: (213) 680-6400

Telecopier: (213) 680-6499

If to the Parent, at:

Butler International, Inc.

110 Summit Avenue

Montvale, NJ 07645

Attention: Richard Paras, Vice President - Legal

Telephone: (201) 573-8000

Telecopier: (201) 573-9723

with a copy to:

McBreen & Kopko

20 North Wacker Drive, Suite 2520

Chicago, IL 60606

Attention: Frederick H. Kopko, Jr., Esq.

Telephone: (312) 332-6405

Telecopier: (312) 332-2657

or at such other address or addresses as Purchaser or the Parent, as the case
may be, may specify by written notice given in accordance with this Section 6.3.

6.4.         Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future Applicable Laws
during the term thereof, such provision shall be fully severable, this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in fill force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically

 

 

16

 

--------------------------------------------------------------------------------

 

as a part of this Agreement a legal, valid, and enforceable provision as similar
in terms to the illegal, invalid, or unenforceable provision as may be possible.

6.5.         Counterparts. This Agreement may be executed in two or more
counterparts and by facsimile transmission or other similar means of electronic
transmission, each of which shall be an original, but all of which together
shall constitute one and the same instrument. This Agreement sets forth the
entire understanding and agreement of the parties with respect to the subject
matter hereof and supersedes all prior oral and written, and all contemporaneous
oral, agreements and understandings with respect to the subject matter hereof.

6.6.        Descriptive Headings, Construction and Interpretation. The rules of
construction and interpretation set forth in Sections 1.2 through 1.5 of the
Securities Purchase Agreement shall likewise govern the construction and
interpretation of this Agreement.

6.7.         Waivers and Amendments. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, except by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.

6.8.        Termination. This agreement shall terminate when the Purchaser no
longer holds any shares of Common Stock and any securities convertible or
exercisable into Common Stock.

6.9.        Remedies. In the event that the Parent fails to observe or perform
any covenant or agreement to be observed or performed under this Agreement,
Purchaser (or any other holder of Registrable Securities) may proceed to protect
and enforce its rights by suit in equity or action at law, whether for specific
performance of any term contained in this Agreement or for an injunction against
the breach of any such term or in aid of the exercise of any power granted in
this Agreement or to enforce any other legal or equitable right, or to take any
one or more of such actions. The Parent hereby agrees that Purchaser shall not
be required or otherwise obligated to, and hereby waives any right to demand
that Purchaser, post any performance or other bond in connection with the
enforcement of its rights and remedies hereunder. The Parent agrees to pay all
fees, costs, and expenses, including the fees and expenses of attorneys,
accountants and other experts, and all fees, costs and expenses of appeals,
incurred by Purchaser or any other holder of Registrable Securities in
connection with the enforcement of this Agreement or the collection or any sums
due hereunder, whether or not suit is commenced. None of the rights, powers or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.

6.10.      Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN

 

 

17

 

--------------------------------------------------------------------------------

 

ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT REGARD TO THE CHOICE OF LAW
OR CONFLICTS OF LAW PROVISIONS THEREOF) AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.

6.11.      Waiver of Trial by Jury. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, AND UNDERSTANDING THEY ARE WAIVING A CONSTITUTIONAL RIGHT, EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY,
WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER
FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING
BASED UPON, ARISING OUT OF OR IN ANY WAY RELATING TO (a) THIS AGREEMENT,
INCLUDING ANY PRESENT OR FUTURE AMENDMENT HEREOF, OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY OR RELATED TO THIS AGREEMENT, OR (b) ANY CONDUCT, ACT OR
OMISSION OF THE PARTIES OR THEIR AFFILIATES (OR ANY OF THEM) WITH RESPECT TO
THIS AGREEMENT, INCLUDING ANY PRESENT OR FUTURE AMENDMENT HEREOF, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, REGARDLESS OF WHICH PARTY INITIATES
SUCH ACTION, SUIT OR OTHER PROCEEDING; AND EACH PARTY HEREBY AGREES AND CONSENTS
THAT ANY SUCH ACTION, SUIT OR OTHER PROCEEDING SHALL BE DECIDED BY A COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO
THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.

6.12.      Judicial Referee. IN THE EVENT THE WAIVER PROVIDED IN SECTION 6.11 IS
DEEMED INEFFECTIVE, TO GIVE EFFECT TO THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE OR RETIRED JUDGE APPLY THE APPLICABLE LAW, THE PARTIES AGREE
TO REFER, FOR A COMPLETE AND FINAL ADJUDICATION, ANY AND ALL ISSUES OF FACT OR
LAW INVOLVED IN ANY LITIGATION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ALL
DISCOVERY AND LAW AND MOTION MATTERS, PRETRIAL MOTIONS, TRIAL MATTERS AND
POST-TRIAL MOTIONS (E.G. MOTIONS FOR RECONSIDERATION, NEW TRIAL AND TO TAX
COSTS, ATTORNEY FEES AND PREJUDGMENT INTEREST)) UP TO AND INCLUDING FINAL
JUDGMENT, BROUGHT TO RESOLVE ANY DISPUTE (WHETHER SOUNDING IN CONTRACT, TORT,
UNDER ANY STATUTE OR OTHERWISE) BETWEEN AND AMONG ANY OF THE PARTIES HERETO, TO
A JUDICIAL REFEREE WHO SHALL BE APPOINTED

 

 

18

 

--------------------------------------------------------------------------------

 

UNDER A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION
638. THE REFEREE’S DECISION WOULD STAND AS THE DECISION OF THE COURT, WITH
JUDGMENT TO BE ENTERED ON HIS/HER STATEMENT OF DECISION IN THE SAME MANNER AS IF
THE ACTION HAD BEEN TRIED BY THE COURT. THE PARTIES HERETO SHALL SELECT A SINGLE
NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL JUDGE WITH AT LEAST
FIVE YEARS OF JUDICIAL EXPERIENCE IN CIVIL MATTERS. IN THE EVENT THAT THE
PARTIES HERETO CANNOT AGREE UPON A REFEREE, THE REFEREE SHALL BE APPOINTED BY
THE COURT. THE PURCHASER AND HOLDERS, ON THE ONE HAND, AND THE COMPANY PARTIES,
ON THE OTHER HAND, SHALL EQUALLY BEAR THE FEES AND EXPENSES OF THE REFEREE (50%
BY THE PURCHASER AND HOLDERS AND 50% BY THE COMPANY PARTIES) UNLESS THE REFEREE
OTHERWISE PROVIDES IN THE STATEMENT OF DECISION.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

19

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered by their duly authorized representatives as of the date first written
above.

 

PARENT

BUTLER INTERNATIONAL, INC.,
a Maryland corporation

By: /s/ Edward Kopko                          
Name:                                                   
Title:                                                     

 

PURCHASER

LEVINE LEICHTMAN CAPITAL
PARTNERS, INC., a California corporation

 

On behalf of LEVINE LEICHTMAN
CAPITAL PARTNERS III, L.P., a
California limited partnership

 

 

By:  /s/ Steven Hartman                        
       Name: Steven Hartman
       Title: Vice President