SETTLEMENT AGREEMENT AND MUTUAL RELEASE

                  This Settlement Agreement and Mutual Release (“Release”) is
entered into by and between Levine Leichtman Capital Partners III, L.P. (“Levine
Leichtman”), a California limited partnership, on the one hand, and Frederick H.
Kopko (“F. Kopko”), and the following parties who are collectively referred to
as the “Defendants,” on the other: Butler International, Inc., a Maryland
corporation (“Butler”); Butler Service Group, Inc., a New Jersey corporation;
Butler Services International, Inc., a Delaware corporation; Butler Telecom,
Inc., a Delaware corporation; Butler Services, Inc., a Delaware corporation;
Butler Utility Service, Inc., a Delaware corporation; Butler Publishing, Inc., a
Delaware corporation (collectively, the “Companies”); AAC Corp., a Delaware
corporation (“AAC”); Sylvan Insurance Co., Ltd., a company organized under the
laws of Bermuda (“Sylvan”); Data Performance, Inc., a New Jersey corporation
(“DPI”); and Edward M. Kopko (“E. Kopko”) (Levine Leichtman, F. Kopko and the
defendants are collectively referred to herein as the “Parties” and each as a
“Party”).                   WHEREAS, on June 30, 2006, Levine Leichtman and the
Companies entered into a certain Securities Purchase Agreement (“SPA”); and  
                WHEREAS, pursuant to the SPA, Levine Leichtman was to provide a
total of $35 million of senior and subordinated debt financing to Butler, of
which $2.5 million was funded on June 30, 2006, as a bridge loan to be repaid
within 45 days of June 30,  

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2006, and $35 million was to be funded on or prior to September 30, 2006, upon
the satisfaction of certain closing conditions, each as set forth in the SPA;
and

                  WHEREAS, pursuant to the SPA, Butler issued to Levine
Leichtman an unsecured note in the original principal amount of $2.5 million
(the “Unsecured Note”) with a 15% interest rate and a maturity date of August
14, 2006; and                   WHEREAS, pursuant to the SPA, Butler granted
Levine Leichtman the right to purchase an aggregate of one million, forty one
thousand, two hundred fifty-four (1,041,254) shares of Butler’s common stock
pursuant to a warrant (the “Warrant”), which was exercisable for a period often
(10) years at an exercise price of $2.13 per share subject to the terms and
conditions set forth therein; and                   WHEREAS, pursuant to the
terms of a General and Continuing Guaranty (the “Sylvan/AAC/DPI Guaranty”),
Sylvan, AAC and DPI agreed to guarantee all indebtedness owed to Levine
Leichtman; and                   WHEREAS, E. Kopko provided a personal guaranty
(the “Personal Guaranty”) with respect to the obligations owed under the SPA;
and                   WHEREAS, on August 14, 2006, Butler and Levine Leichtman
entered into a first amendment to the SPA and to the Unsecured Note due 2006
(the “First Amendment”) pursuant to which, among other things, the Unsecured
Note was amended to permit  

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one payment of $1.0 million on August 15, 2006, and the maturity date was
extended to August 25, 2006. Butler made the required payments on August 15,
2006 and August 25, 2006; and                   WHEREAS, under the terms of the
SPA, as amended, the remaining $35 million debt facility was to be funded upon
the satisfaction of certain closing conditions; and                   WHEREAS,
two of the conditions to closing of the $35 million funding, set forth in
Section 6.2(f) of the SPA were (i) the absence of “any injunction, order, decree
or ruling that prohibits or limits any of the transactions contemplated by the
[SPA]” and (ii) the absence of “any action, suit, proceeding or
investigation...that (a) draws into question the validity, legality or
enforceability . . . of the [SPA]. . . or the consummation of the transactions
contemplated thereby”; and                   WHEREAS, on July 12, 2006, Knott
Partners, L.P. forwarded a letter to E. Kopko (the “Knott Letter”) seeking to
negotiate an alternative transaction to the SPA and specifically objecting to
the terms of the SPA; and                   WHEREAS, as required by the terms of
the SPA, Butler immediately notified Levine Leichtman of the Knott Letter; and  

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                WHEREAS, on August 23, 2006, Thomas J. Carley and Charles Jobson
filed a class action complaint (“Carley and Jobson Complaint”) against Butler
and Butler’s directors, which questioned the validity of the SPA and the
Warrant; and                   WHEREAS, the Carley and Jobson Complaint sought,
among other things (i) an injunction preliminarily and permanently enjoining
Butler from closing on the loans set forth in the SPA; and (ii) a declaration
that the issuance of the Warrant was null and void and ultra vires; and  
                WHEREAS, as required by the terms of the SPA, Butler immediately
notified Levine Leichtman of the Carley and Jobson Complaint; and  
                WHEREAS, Levine Leichtman perceived increased risk associated
with its potential investment due to, principally, the perceived risk presented
by the Knott Letter (given Knott’s history with the Companies) and the Carley
and Jobson Complaint, such that on September 6, 2006, Levine Leichtman contacted
Butler seeking to modify the terms of its debt facility contemplated by the SPA
to eliminate the Warrant and provide for an enhanced cash return to Levine
Leichtman through: (i) a discounted issuance price on the notes; and (ii) an
increased and fixed interest rate on the notes, in lieu of the variable rate
originally provided; and  

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                WHEREAS, the consummation of the transactions contemplated by
the SPA did not occur on or prior to September 30, 2006 principally as a result
of Butler failing to satisfy the closing conditions set forth in section 6.2 of
the SPA, including section 6.2(f) (“No Injunction, Order, or Suit”), and Butler
was unable to satisfy section 6.2(f) principally because of the Knott Letter and
the Carley and Jobson Complaint; and

                  WHEREAS, as of September 30, 2006, Levine Leichtman’s funding
commitment under the SPA terminated when Levine Leichtman declined to consummate
the transactions contemplated by the SPA as a result of Butler’s inability to
satisfy the conditions to closing set forth in Section 6.2(f) principally as a
result of the Knott Letter and the Carley and Jobson Complaint; and  
                WHEREAS, on October 12, 2006, Levine Leichtman filed a lawsuit
in the Los Angeles Superior Court against the Companies, AAC, Sylvan, DPI and E.
Kopko, Case No. BC360205 for Breach of Contract and Negligent Misrepresentation
alleging, among other things, that the Companies failed to fulfill certain
closing conditions set forth in the SPA, including Section 6.3(f) (the
“Action”); and                   WHEREAS, on November 3, 2006, in a letter to
Levine Leichtman, Butler asserted that the Warrant had been terminated because
of the failure to consummate the transactions contemplated by the SPA; and  

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                WHEREAS, the Parties wish to settle the Action and resolve all
claims among them.   AGREEMENT                   NOW, THEREFORE, in
consideration of the premises and mutual promises herein made, and in
consideration of the representations, warranties and covenants herein contained,
the Parties agree as follows:                   1.            Recitals
Conclusive. California Evidence Code section 622 applies to the recitals stated
above, which are therefore conclusively determined to be true as between the
parties to this Release.                   2.            Payment to Levine
Leichtman. Upon execution of this Release, Defendants immediately shall pay to
Levine Leichtman the sum of $1,265,000 by wire transfer to the following
account:  

  Levine Leichtman Capital Partners III, L.P.   Bank of America   2049 Century
Park East   Los Angeles, CA 90067   Attention: Cheryl Stewart   ABA #026-009-593
  Accounts #: 11546-02404  

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                3.           Dismissal of Action. Promptly upon receipt of good
funds in the amount of $1,265,000, Levine Leichtman shall file a dismissal of
the Action with prejudice.

 

                4.           Agreements Terminated. Effective upon the payment
reflected in paragraph 1, except as expressly set forth below, the following are
hereby terminated and shall be of no further force and effect: (a) the SPA; (b)
the Warrant; (c) the Investors Rights Agreement by and among Butler, Levine
Leichtman, E. Kopko and F. Kopko dated as of June 30, 2006; (d) the Registration
Rights Agreement dated as of June 30, 2006 by and between Butler and Levine
Leichtman; and (e) all other agreements and letters between or among the Parties
executed in connection with the SPA, including without limitation those listed
in Section 6.1(g) to the SPA. Notwithstanding the foregoing, and any other
provision of this Release, (i) Levine Leichtman’s confidentiality and other
obligations as set forth in Section 13.14 of the SPA are incorporated by
reference into this Release and Levine Leichtman shall be obligated to adhere to
such obligations pursuant to this Release, and (ii) the Companies’ obligations
as set forth in Section 8 of the SPA are incorporated into this Release by
reference and the Companies shall be obligated to adhere to such obligations
pursuant to this Release. Except as set forth in the preceding sentence, all of
the provisions, obligations, rights, covenants and liabilities created by the
agreements and letters terminated pursuant to this paragraph 3 are intended to
be and hereby are terminated regardless of whether or not such provisions,
obligations, rights, covenants or liabilities expressly purport to survive any
termination of the agreement or letter which creates them or not.

 

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                5.           Releases by Levine Leichtman in Favor of the
Companies, AAC, Sylvan, DPI, E. Kopko and F. Kopko. Upon full execution of this
Release, Levine Leichtman hereby releases and forever discharges the Companies,
AAC, Sylvan, DPI, E. Kopko and F. Kopko, as well as their past, present and
future predecessors, successors, heirs, assigns, subsidiaries, shareholders,
officers, members, affiliates, partners (general and limited), directors,
employees, agents, representatives, insurers, attorneys and accountants, of and
from any and all claims, demands, actions, causes of action, suits at law or
equity, debts, sums of money, accounts, controversies, rights, damages, costs,
attorneys’ fees, losses, expenses, contracts, torts, agreements, promises or
liabilities whatsoever, known, unknown, asserted or unasserted, whether arising
under the common law, statute or otherwise that arise out of or relate to any
claims made in the Action, or that were or could have been alleged in the
Action, except for any obligations assumed under this Release.

 

                6.           Releases by the Companies, AAC, Sylvan, DPI, E.
Kopko and F. Kopko in favor of Levine Leichtman. Upon full execution of this
Release, the Companies, AAC, Sylvan, DPI, E. Kopko and F. Kopko hereby release
and forever discharge Levine Leichtman and Levine Leichtman Capital Partners,
Inc., as well as their past, present and future predecessors, successors, heirs,
assigns, subsidiaries, shareholders, directors, officers, members, affiliates,
partners (general and limited), employees, agents, representatives, insurers,
attorneys and accountants, of and from any and all claims, demands, actions,
causes of action, suits at law or equity, debts, sums of money, accounts,
controversies, rights, damages, costs, attorneys’ fees, losses,

 

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expenses, contracts, torts, agreements, promises or liabilities whatsoever,
known, unknown, asserted or unasserted, whether arising under the common law,
statute or otherwise that arise out of or relate to any claims made in the
Action, or that were or could have been alleged in the Action, except for any
obligations assumed under this Release.

 

                7.           No Admission of Liability. This Release and the
negotiations and discussions leading up to this Release do not constitute, nor
shall they be construed as, an admission of liability by any Party. This Release
is made solely for the purpose of avoiding the burden and expense of further
litigation which would be imposed on the Parties if the disputes between them
remained unsettled.

 

                8.           Governing Law. This Release shall be governed by
and construed in accordance with California law.

 

                9.           Entire Release. This Release contains the entire
understanding of the parties concerning the matters set forth herein.

 

                10.          Construction. This Release shall not be construed
against the party preparing it, but shall be construed as if the Parties jointly
prepared it and any uncertainty or ambiguity shall not be interpreted against
any party. This is a material term of this Release.

 

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                11.          No Oral Modifications. This Release may not be
modified orally. All modifications to this Release must be in writing,
specifically refer to this Release, and signed by the Party or Parties to be
charged.

 

                12.          No Assignments. The Parties hereby represent and
warrant that there has been no assignment or transfer whatsoever of any of the
claims released herein.

 

                13.          Effect of Release. This Release shall be binding on
and shall inure to the benefit of the Parties, their respective heirs,
representatives, successors and assigns. This Release may be pleaded as a full
and complete defense to any legal action, suit, or other proceeding initiated by
or on behalf of any Party to this Release. Any Party bringing any legal action,
suit, or other proceeding in violation of this Release shall indemnify the other
Parties, and hold them harmless from and against any liability, loss, cost, or
expense (including, but not limited to, reasonable attorneys’ fees) arising out
of, related to, or connected with such legal action, suit, or other proceeding.

 

                14.          Execution. Each person whose signature appears
hereon warrants and guarantees that he has been duly authorized and has full
authority to execute this Release on behalf of the person, persons or entity on
whose behalf this Release is executed.

 

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                15.          Counterparts. This Release may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

                  16.          Advice of Counsel. Each Party to this Release has
had the opportunity to discuss the matter with legal counsel, and enters into
this Release only after such consultation.  

                17.          Release of Unknown Claims. The Parties understand
and acknowledge that there is a risk that subsequent to the execution of the
Release they may discover, incur or suffer losses, damages or injuries that are
in some way caused by or related to the released claims, but that are unknown or
unanticipated, for whatever reason, at the time of the execution of this
Release. Further, the Parties understand that there is a risk that loss or
damage presently known to some or all of the Parties may be or become, for
whatever reason, greater than what they now expect or anticipate. The Parties
intend that the releases contained herein shall apply to all unknown and
unanticipated damage, loss, costs or expenses in any way arising from or
relating to the claims released herein, as well as those known and anticipated,
and upon advice of legal counsel, all Parties to this Release knowingly,
voluntarily, intentionally and expressly waive against the other all rights
under California Civil Code Section 1542, which provides as follows:

 

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  A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.  

                  The Parties each hereby expressly waive the provisions of
Section 1542 of the Civil Code as it applies to unknown claims within the scope
of the releases herein, and each acknowledge that they have all been advised by
their respective counsel as to the significance of the waivers of Section 1542
hereunder, and that the waivers are made knowingly and voluntarily.  
                 18.           Severability.  If any provision of this Release
is determined to be illegal or unenforceable, such determination shall not
affect the validity or enforceability of the remaining provisions hereof, all of
which shall remain in full force and effect.                    19.          
Attorneys’ Fees for Enforcement.  If any action or legal proceeding is
instituted by any Party hereto arising out of this Release, the prevailing party
therein shall recover his or her attorneys’ fees and costs in connection with
such action or proceeding.  

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               IN WITNESS WHEREOF, each Party has executed the Release as of the
date set forth opposite the Party’s signature.  

  Levine Leichtman Capital Partners III, L.P.   By: Levine Leichtman Capital
Partners, Inc.
Its: General Partner

       

Dated: December ___ , 2006 By: _______________________________________
_______________________________________ Name:
_____________________________________   Title:
______________________________________

      Butler International, Inc., Butler Service Group, Inc., Butler Services
International, Inc., Butler Telecom, Inc., Butler Services, Inc., Butler Utility
Service, Inc., Butler Publishing, Inc., AAC Corp., Sylvan Insurance Co., LTD,
and Data Performance, Inc.     Dated: December 27, 2006
By:           [edwardmkopko.jpg]   
_______________________________________________________  
                  Edward M. Kopko       Authorized Agent for all these
corporations                      [edwardmkopko.jpg] Dated: December 27, 2006
__________________________________________   Edward M. Kopko     Dated: December
____ , 2006 __________________________________________
_______________________________________ Frederick H. Kopko

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               IN WITNESS WHEREOF, each Party has executed the Release as of the
date set forth opposite the Party’s signature.

      Levine Leichtman Capital Partners III, L.P.     By: Levine Leichtman
Capital Partners, Inc.
Its: General Partner

    Dated: December 27, 2006 By:      [steven.jpg]  
______________________________________ ________________________________________
Name:          Steven Hartman                                                  
       Title:
           V.P                                                                         
      Butler International, Inc., Butler Service Group, Inc., Butler Services
International, Inc., Butler Telecom, Inc., Butler Services, Inc., Butler Utility
Service, Inc., Butler Publishing, Inc., AAC Corp., Sylvan Insurance Co., LTD,
and Data Performance, Inc.     Dated: December ___ , 2006 By:
_______________________________________              Edward M. Kopko      
Authorized Agent for all these corporations     Dated: December ___ , 2006
__________________________________________   Edward M. Kopko     Dated: December
___ , 2006 __________________________________________
________________________________________ Frederick H. Kopko

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               IN WITNESS WHEREOF, each Party has executed the Release as of the
date set forth opposite the Party’s signature.  

  Levine Leichtman Capital Partners III, L.P.       By: Levine Leichtman Capital
Partners, Inc.   Its: General Partner     Dated: December ___ , 2006 By:
_________________________________ ________________________________________ Name:
_______________________________   Title: ________________________________      
Butler International, Inc., Butler Service Group, Inc., Butler Services
International, Inc., Butler Telecom, Inc., Butler Services, Inc., Butler Utility
Service, Inc., Butler Publishing, Inc., AAC Corp., Sylvan Insurance Co., LTD,
and Data Performance, Inc.     Dated: December ___ , 2006 By:
_________________________________                     Edward M. Kopko      
Authorized Agent for all these
corporations     Dated: December ___ , 2006 ____________________________________
  Edward M. Kopko        [frederickhkopko.jpg] Dated: December 27, 2006
__________________________________________
________________________________________ Frederick H. Kopko    

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APPROVED AS TO FORM:     Dated: December ___ , 2006 Law Offices of George S.
Burns         [georgesburns.jpg]   By: _______________________________________  
                 George S. Burns       Attorney for Defendants Butler
International, Inc., Butler Service Group, Inc., Butler Services International,
Inc., Butler Telecom, Inc., Butler Services, Inc., Butler Utility Service, Inc.,
Butler Publishing, Inc., AAC Corp., Sylvan Insurance Co., LTD, Data Performance,
Inc. and Edward M. Kopko     Dated: December ___ , 2006 Freedman & Taitelman,
LLP       By: _______________________________________                    Michael
A. Taitelman       Attorney for Plaintiff Leichtman Capital
Partners III, L.P.    

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