THIRD AMENDMENT TO FORBEARANCE AGREEMENT

 

Dated as of November 14, 2008

 

Butler Service Group, Inc.

110 Summit Avenue

Montvale, NJ 07645

 

Attn: Ed Kopko

 

Re:

Third Amended and Restated Credit Agreement, dated as of August 29, 2007
(including, all annexes, exhibits and schedules thereto, and as amended,
supplemented or otherwise modified from time to time prior to the date hereof,
the “Credit Agreement”), by and among Butler Service Group, Inc. (the
“Borrower”), the other Credit Parties signatory thereto, General Electric
Capital Corporation, as a Lender and Agent for Lenders (the “Agent”), and the
other Lenders signatory thereto from time to
time.                                    

 

Ladies and Gentlemen:

 

Capitalized terms used in this letter (hereafter referred to as this
“Amendment”) and not otherwise defined or limited herein shall have the meanings
attributed to such terms in the Forbearance Agreement, dated as of September 29,
2008, among Butler Service Group, Inc., the other Credit Parties signatory
thereto and General Electric Capital Corporation, as a Lender and Agent for
itself and the Lenders, as amended by that certain First Amendment to the
Forbearance Agreement, dated as of October 17, 2008, and as further amended by
that certain Second Amendment to the Forbearance Agreement, dated as of November
7, 2008 (as further amended, restated or modified, the “Forbearance Agreement”).

 

A.

Amendment to the Forbearance Agreement.

 

Section A.1 of the Forbearance Agreement is hereby amended as of the Amendment
Effective Date (as defined below) by deleting the date “November 14, 2008” set
forth in clause (a) thereof and substituting in lieu thereof the date “November
21, 2008”.

 

B.

Effectiveness.

 

This Amendment shall become effective as of the date first set forth above (the
“Amendment Effective Date”) upon Agent’s receipt of four (4) fully-executed
copies of this Amendment, duly executed and delivered by Agent, Requisite
Lenders, Borrower and Guarantors.

 

C.

Representations and Warranties.

 

 

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As of November 14, 2008

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In consideration of the limited agreement of Agent and the Lenders to forbear
from the exercise of their rights and remedies as set forth above, each Credit
Party hereby represents and warrants to Agent and the Lenders, as of the date
hereof, as follows:

1.         The execution, delivery and performance of this Amendment by such
Credit Party: (a) is within its organizational power; (b) has been duly
authorized by all necessary or proper corporate and shareholder action; (c) does
not contravene any provision of such Credit Party’s charter or bylaws or
equivalent organizational documents; (d) does not violate any law or regulation,
or any order or decree of any court or Governmental Authority; (e) does not
conflict with or result in the breach or termination of, constitute a default
under or accelerate or permit the acceleration of any performance required by,
any indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Credit Party is a party or by which such Credit Party or any of its
property is bound; (f) does not result in the creation or imposition of any Lien
upon any of the property of such Credit Party other than those in favor of Agent
pursuant to the Loan Documents; and (g) does not require the consent or approval
of any Governmental Authority or any other Credit Party.

2.         All Loan Documents, including without limitation, this Amendment, the
Forbearance Agreement, the Credit Agreement and the Guaranties, constitute
legal, valid and binding obligations of each Credit Party party thereto
enforceable against each such Credit Party in accordance with the terms thereof.
Each Credit Party hereby ratifies and confirms each of the Loan Documents to
which such Credit Party is party to and the rights granted thereunder in favor
of Agent and the Lenders, including its liability for the Obligations as defined
therein.

3.         This Amendment has been duly executed and delivered by or on behalf
of each of Borrower and the other Credit Parties.

 

4.         No Default or Event of Default (other than the Specified Events of
Default) has occurred and is continuing after giving effect to the Forbearance
Agreement and this Amendment.

 

5.         The representations and warranties of Borrower and the other Credit
Parties contained in the Credit Agreement and each other Loan Document shall be
true and correct on and as of the date hereof with the same effect as if such
representations and warranties had been made on and as of such date, except that
any such representation or warranty which is expressly made only as of a
specified date need be true only as of such date.

6.          As of November 14, 2008, the aggregate amount of liabilities of the
Borrower and the other Credit Parties for unpaid payroll taxes equals
$2,378,691.21, consisting of (i) $2,387,691.21 in liabilities for unpaid payroll
taxes arising out of payroll paid prior to November 7, 2008, and (ii) $0.00 in
liabilities for unpaid payroll taxes arising out of payroll paid on November 7,
2008.

D.

Other Representations, Warranties and Covenants.

 

 

 

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As of November 14, 2008

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1.         The Credit Parties and the Lenders hereby confirm that the decision
by Agent and the Lenders to grant the forbearance as outlined in the Forbearance
Agreement as amended by this Amendment is not and shall not be deemed to
constitute an undertaking by Agent and the Lenders to forbear or refrain from
exercising any and all rights and remedies available to them under the Credit
Agreement and the other Loan Documents and under applicable law upon the
occurrence of any Forbearance Default. Additionally, notwithstanding the
agreement of Agent and the Lenders to enter into this Amendment, Agent and the
Lenders hereby advise the Credit Parties that, except to the extent of Agent and
the Lenders’ forbearance expressly referenced through the Forbearance Period
specified in the Forbearance Agreement, Agent and Lenders require strict
compliance with all of the terms and conditions of the Credit Agreement and the
other Loan Documents; provided, however, that Agent or the Lenders shall not be
required to issue any notices otherwise required by the Credit Agreement with
respect to the Specified Events of Default during the term of the Forbearance
Agreement.

 

2.         Each Credit Party further acknowledges and agrees that: (a) the
Specified Events of Default have occurred or will occur and continue, and shall
not be deemed to have been waived, cured or eliminated, in whole or in part, by
this Amendment or the Forbearance Agreement, and Agent and the Lenders expressly
reserve rights with respect to the Specified Events of Default, subject only to
the terms in the Credit Agreement, the other Loan Documents and the Forbearance
Agreement; (b) the parties have not entered into a mutual disregard of the terms
and provisions of the Credit Agreement and the other Loan Documents, or engaged
in any course of dealing in variance with the terms and provisions of the Credit
Agreement and the Loan Documents, within the meaning of any applicable law of
the State of New York, or otherwise; and (c) as of the date hereof, principal in
the amount set forth on Schedule A attached hereto, plus accrued interest was
due and owing, by the Borrower under the Credit Agreement and guaranteed by the
Guarantors under the Guaranties.

3.         Each Credit Party expressly acknowledges and agrees that the Credit
Agreement and other Loan Documents are valid and enforceable by Agent and the
Lenders and expressly reaffirms its obligations under the Credit Agreement and
other Loan Documents (including the Guaranties). Each Credit Party agrees that
it shall not dispute the validity or enforceability of the Credit Agreement and
other Loan Documents (including the Guaranties) or any of its obligations
thereunder, or the validity, priority, enforceability or extent of Agent on
behalf of the Lenders’ security interest in or lien against any item of
Collateral under the Credit Agreement and other Loan Documents.

4.         As further consideration to induce Agent and the Lenders to execute,
deliver and perform this Amendment, each Credit Party represents and warrants
that there are no claims, causes of action, suits, debts, obligations,
liabilities, defenses, counterclaims, demands of any kind, character or nature
whatsoever, fixed or contingent, which such Credit Party may have, or claim to
have, against the Lenders or Agent in connection with the Credit Agreement and
Loan Documents, and such Credit Party hereby releases, acquits and forever
discharges Agent and each Lender and its respective agents, employees, officers,
directors, servants, representatives, attorneys, affiliates, successors and
assigns (collectively, the “Released Parties”) from any and all liabilities,
claims, suits, debts, causes of action and the like of any kind, character or
nature whatsoever, known or unknown, fixed or contingent, in connection with the
Credit Agreement

 

 

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As of November 14, 2008

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and Loan Documents, that the Credit Party may have, or claim to have, against
each of the such Released Parties from the beginning of time until and through
the dates of execution and delivery of this Amendment.

5.         Each Credit Party covenants and agrees that it will continue to pay
all Charges in accordance with Section 5.2 of the Credit Agreement from and
after the Amendment Effective Date, and that such Credit Party will not permit
the aggregate amount of liabilities of the Borrower and the other Credit Parties
for unpaid payroll taxes arising out of payroll paid prior to the date set forth
as the “last payroll payment date” in any Borrower certification to Agent or any
Lender as to the amount of outstanding payroll taxes to exceed $2,378,691.21.

 

E.

Miscellaneous.

 

1.         Except as expressly amended herein, the Credit Agreement and the
other Loan Documents shall be unmodified and shall continue to be in full force
and effect in accordance with their terms. In addition, this Amendment and the
Forbearance Agreement shall not be deemed a waiver of any term or condition of
any Loan Document and shall not be deemed to prejudice any right or rights which
Agent, for itself and Lenders, may now have or may have in the future under or
in connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.

 

2.         This Amendment and the Forbearance Agreement, taken together with the
Credit Agreement and all of the other Loan Documents, embodies the entire
agreement and understanding among the parties hereto, and the Forbearance
Agreement may not be amended or modified or the Forbearance Period extended
unless agreed to in writing executed by all parties signatory to the Forbearance
Agreement or as may otherwise be provided for under the terms of the Credit
Agreement and the other Loan Documents. This Amendment shall constitute a Loan
Document for all purposes under the Credit Agreement.

3.         This Amendment may be executed in multiple counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. Delivery
of an executed counterpart of this Amendment by facsimile shall be equally as
effective as delivery of an original Amendment.

4.         THIS AMENDMENT AND THE TRANSACTIONS EVIDENCED HEREBY SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

5.

Time is of the essence for performing all matters set forth in this Amendment.

[Remainder of Page Intentionally Blank]

 

 

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As of November 14, 2008

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AGENTS AND LENDERS:

GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
and a Lender

By:               /s/ James H. Kaufman                         

Duly Authorized Signatory

 

 

 

 

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As of November 14, 2008

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AS BORROWER:

BUTLER SERVICE GROUP, INC.

By:       /s/ Edward M. Kopko                       
Name: EDWARD M. KOPKO
Title: Chief Executive Officer

 

 

 

 

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As of November 14, 2008

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AS GUARANTORS:

 

BUTLER INTERNATIONAL, INC.

BUTLER SERVICES INTERNATIONAL, INC.

BUTLER TELECOM, INC.

BUTLER PUBLISHING, INC.

BUTLER OF NEW JERSEY REALTY CORP.

BUTLER SERVICES, INC.

BUTLER UTILITY SERVICE, INC.

By:       /s/ Edward M. Kopko                 

Name: EDWARD M. KOPKO

Title: Chief Executive Officer

 

 

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As of November 14, 2008

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SCHEDULE A

As of November 14, 2008, the principal balance due and owing of the Revolving
Loan was $27,205,148.71 and the aggregate outstanding Letter of Credit
Obligations was $2,689,515.95.