Execution Copy

FOURTH AMENDMENT TO FORBEARANCE AGREEMENT

Dated as of December 23, 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, as further amended by that
certain Second Amendment to the Forbearance Agreement, dated as of November 7,
2008, and as further amended by that certain Third Amendment to the Forbearance
Agreement, dated as of November 14, 2008 (as further amended, restated or
modified, the “Forbearance Agreement”).

          As you are aware, Events of Default and with respect to clauses (e)
through (g) below, Forbearance Defaults (as defined in the Forbearance
Agreement) (collectively, the “Specified Events of Default”) have occurred and
are continuing under Sections 8.1(b), 8.1(c), 8.1(d) and 8.1(f) of the Credit
Agreement and under Section A(l) of the Forbearance Agreement arising out of (a)
the Borrower’s failure to comply with the minimum Borrowing Availability
covenant set forth in clause (d)(i) of Annex G of the Credit Agreement for each
of the August 1, 2008, August 15, 2008 and September 12, 2008 testing dates as
required to be maintained pursuant to Section 6.10 of the Credit Agreement, (b)
the Borrower’s delivery of a Borrowing Base Certificate to Agent on July 22,
2008 which contained certain information which was untrue or incorrect, (c) the
Borrower’s failure to promptly pay and discharge all Charges payable by it as
required by Section 5.2(a) of the Credit Agreement, (d) the Borrower’s failure
to deliver to Agent the financial and other information (other than Borrower’s
10-Q for the Fiscal Quarter ended September 30, 2007) required by Section 4.1(a)
and clause (r) of Annex E of the Credit Agreement to be delivered on or prior to
September 15, 2008, (e) the Borrower’s failure to deliver to Agent the financial
and other information required by Section 4.1(a) and clause (a) of Annex E of
the Credit Agreement for the Fiscal Month ended on September 28, 2008 to be

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delivered on or prior to October 28, 2008, (f) the Borrower’s failure to deliver
to Agent the financial and other information required by Section 4.1(a) and
clause (b) of Annex E of the Credit Agreement for the Fiscal Month ended on
September 28, 2008 to be delivered on or prior to November 12, 2008 and (g) the
Borrower’s failure to comply with Section 6.1 of the Credit Agreement. There may
be other Defaults or Events of Default of which Agent and the Lenders are not
currently aware.

          The Borrower and Guarantors have each requested that Agent and Lenders
continue to forbear from the exercise of Agent’s and Lenders’ rights and
remedies available under the Credit Agreement as a result of the occurrence of
the Specified Events of Default. Agent and Requisite Lenders are willing to
grant such forbearance upon the terms and subject to the conditions and
limitations set forth in this Amendment and the Forbearance Agreement.

A.      Forbearance.

          1.          Agent’s and Lenders’ forbearance provided for in the
Forbearance Agreement (as amended by this Amendment) shall be effective only
with respect to the Specified Events of Default and shall automatically
terminate and cease to be of force and effect, and Agent and Lenders may
exercise all of their respective rights and remedies as may be available under
the Credit Agreement and under applicable law, upon or after the occurrence of
(a) any other Default or Event of Default under the Credit Agreement or any Loan
Document (other than the Specified Events of Default and as set forth in Section
A3 of this Amendment), (b) a default under the terms of this Agreement, (c) the
commencement by Second Lien Collateral Agent of a Standstill Period (as such
terms are defined in the Intercreditor Agreement), (d) the commencement by the
Second Lien Agent or any Second Lien Claimholder (as such term is defined in the
Intercreditor Agreement) of any case, action, claim, lawsuit, demand,
investigation or other proceeding against any of the Credit Parties (including
without limitation the commencement of an Insolvency or Liquidation Proceeding
(as such terms are defined in the Intercreditor Agreement) against any of the
Credit Parties), or the taking of any action by the Second Lien Agent or any
Second Lien Claimholder in a manner inconsistent with, or in violation of, the
Intercreditor Agreement, or (e) the payment by any Credit Party to any Second
Lien Claimholder of any interest, principal, expenses, costs or any other
amounts in excess of $200,000 in the aggregate (as determined on a cumulative
basis from and after the date hereof and as of any date of determination) under
any Second Lien Loan Document or any other document, instrument or agreement
executed and/or delivered in connection therewith (individually a “Forbearance
Default” and, collectively, the “Forbearance Defaults”).

          2.          For the period commencing on September 29, 2008 and ending
on November 27, 2008, Borrower and Agent acknowledge and agree that no new
Reserves were established nor were any existing Reserves (including the Daily
Reserve) increased above the amount of such Reserves which were in effect as of
September 29, 2008.

          3.          During the period commencing on the Amendment Effective
Date and ending on January 14, 2009, and provided that no Forbearance Default
has occurred and that the terms and conditions of this Amendment are satisfied,
Agent and Requisite Lenders agree to waive the requirements set forth in (x)
clauses (a) through (c) of Annex G of the Credit Agreement solely

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for purposes of determining compliance with Section 6.10 of the Credit Agreement
during such period and (y) Section 8.1(n) of the Credit Agreement.

B.      Amendment to the Forbearance Agreement.

           Section A.1 of the Forbearance Agreement is hereby amended as of the
Amendment Effective Date by deleting the date “November 21, 2008” set forth in
clause (a) thereof and substituting in lieu thereof the date “March 1, 2009”.

C.      Amendments to the Credit Agreement.

 

 

 

          1.     Section 1.9(d) of the Credit Agreement is hereby amended as of
the Amendment Effective Date by deleting such Section 1.9(d) in its entirety and
substituting in lieu thereof the following new Section 1.9(d):

 

 

 

 

 

“(d) Borrower agrees to pay to Agent, for the ratable benefit of Revolving
Lenders, a non-refundable fee in an amount equal to $10,000 for the first
Business Day of each calendar week which the Borrowing Availability for such
Business Day is less than $2,000,000, and an additional fee in the amount equal
to $2,500 for each Business Day in such calendar week thereafter that the
Borrowing Availability remains less than the applicable amount for such Business
Day identified above; provided, that for purposes of determining the amount of
the minimum Borrowing Availability pursuant to this clause (d), such
determination shall be made without regard to clause (ii) of the proviso set
forth in clause (d) of Annex G.”

 

 

 

          2.     Section 1.9(e) of the Credit Agreement is hereby amended as of
the Amendment Effective Date by deleting such Section 1.9(e) in its entirety and
substituting in lieu thereof the following new Section 1.9(e):

 

 

 

 

 

“(e) Borrower agrees to pay to Agent, for the ratable benefit of Revolving
Lenders, a non-refundable fee in an amount equal to $25,000 for each day during
which the outstanding principal amount of the Loans exceed the Borrowing Base,
which fees shall be payable in immediately available funds on the Commitment
Termination Date; provided, however, that the payment of such fee to Agent shall
not constitute, or otherwise shall be deemed to constitute, a waiver of any
Default or Event of Default which may exist as a result of such excess, or to
affect, limit or impair any rights, powers or remedies of Agent or any Lender or
any Obligations of Borrower under or in respect of the Credit Agreement.”

 

 

 

          3.     Annex A of the Credit Agreement is hereby amended as of the
Amendment Effective Date by amending and restating the following definition in
its entirety by deleting such definition and substituting in lieu thereof the
following new definition:

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“‘Daily Reserve’ means with respect to the Borrowing Base of Borrower, a reserve
against the Borrowing Availability of Borrower in an amount which shall (i)
accrue Monday through Friday of each calendar week in daily equal installments
of (a) for the period commencing on the Eighth Amendment Effective Date and
ending on July 31, 2008, $5,000, (b) for the period commencing on August 1, 2008
and ending on August 31, 2008, $30,000, and (c) for the period commencing on
September 1, 2008 and ending on September 28, 2008, $40,000, and (ii) on
November 28, 2008, increase by an amount equal to $473,678; provided, that the
Daily Reserves shall be increased by an amount equal to fifty percent (50%) of
the amount by which the face amount of Letters of Credit are reduced pursuant to
the terms thereof (or otherwise cancelled) on terms and conditions satisfactory
to Agent, but in no event shall the aggregate amount of Daily Reserves exceed
$4,000,000 (the “Daily Reserve Cap”). Commencing on January 1, 2009, Agent may,
in its sole discretion, release an amount up to $2,000,000 of such Daily
Reserves to be used for working capital needs of Borrower on an “as needed”
basis subject to conditions and criteria satisfactory to Agent; provided, that
Agent shall retain the right to reinstitute the amount of such Daily Reserves
until it reaches the Daily Reserve Cap.”

 

 

 

          4.     Annex A of the Credit Agreement is amended as of the Amendment
Effective Date by deleting the definition “Liquidity Test Date” where it appears
in such Annex A.

 

 

 

          5.     Annex G of the Credit Agreement is hereby amended as of the
Amendment Effective Date by amending and restating clause (d) of Annex G in its
entirety by deleting such clause (d) in its entirety and substituting in lieu
thereof the following new clause (d):

 

 

 

 

 

“(d)     Minimum Borrowing Availability. Holdings and its Subsidiaries shall
maintain Borrowing Availability of not less than $2,000,000; provided, that in
determining compliance with this minimum Borrowing Availability covenant, (A)
the aggregate amount of Daily Reserves shall be excluded from the definition of
“Reserves” for purposes of calculating Borrowing Availability and (B) Borrowing
Availability shall be calculated on each Friday of each week as a daily average
of the amount of Borrowing Availability for the preceding 5-day period
(including for such calculations the Friday such calculation is made).”

 

 

 

D.      Forbearance Fee.

 

 

 

          Borrower and the other Credit Parties hereby, jointly and severally
agree to pay to Agent, for the ratable benefit of the Lenders, a forbearance fee
in the aggregate amount equal to $225,000, which shall be fully earned on the
Amendment Effective Date (the “Forbearance Fee”) and payable as follows: (i)
$100,000 of the Forbearance Fee shall be due and payable in

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immediately available funds on the Amendment Effective Date and (ii) the
remainder of the Forbearance Fee shall be due and payable in immediately
available funds on the Commitment Termination Date.

E.       Effectiveness.

          This Amendment shall become effective as of the date first set forth
above (the “Amendment Effective Date”) upon Agent’s receipt of:

          (a)          four (4) fully-executed copies of this Amendment, duly
executed and delivered by Agent, Requisite Lenders, Borrower and Guarantors;

          (b)          the portion of the Forbearance Fee due and payable on the
Amendment Effective Date;

          (c)          four (4) fully-executed copies of a Joinder Agreement to
Third Amended and Restated Credit Agreement, Amended and Restated Subsidiaries
Guaranty, Amended and Restated Subsidiaries Security Agreement, and Subsidiary
Pledge Agreement, duly executed and delivered by Butler Resources, LLC, a
Delaware limited liability company (“Butler Resources”), together with all
instruments, documents and agreements executed pursuant thereto (including,
without limitation, a UCC-1 financing statement filed in favor of Agent as
secured party, listing Butler Resources, as debtor), in each case, in form and
substance reasonably satisfactory to Agent;

          (d)          four (4) fully-executed copies of the Counterpart to the
Intellectual Property Security Agreement, duly executed and delivered by Butler
Resources, together with all instruments, documents and agreements executed
pursuant thereto, in form and substance reasonably satisfactory to Agent;

          (e)          four (4) fully-executed copies of a Joinder Agreement to
Amended and Restated Subsidiaries Guaranty and Amended and Restated Subsidiaries
Security Agreement, duly executed and delivered by Butler Publishing, Inc.
(“Butler Publishing”), together with all instruments, documents and agreements
executed pursuant thereto, in form and substance reasonably satisfactory to
Agent;

          (f)          four (4) fully-executed copies of the Counterpart to the
Intellectual Property Security Agreement, duly executed and delivered by Butler
Publishing, together with all instruments, documents and agreements executed
pursuant thereto, in form and substance reasonably satisfactory to Agent;

          (g)          four (4) fully-executed copies of a Pledge Amendment to
Subsidiary Pledge Agreement, duly executed and delivered by Butler Services,
Inc., together with all instruments, documents and agreements executed pursuant
thereto, in form and substance reasonably satisfactory to Agent; and

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          (h)        four (4) fully-executed copies of the Financial Consultant
Side Letter, duly executed and delivered by Agent, Borrower and Guarantors.

F.       Representations and Warranties.

          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 December 23, 2008, the aggregate amount of
liabilities of the Borrower and the other Credit Parties for unpaid payroll
taxes equals $1,616,670.51, consisting of (i) $1,604,097.22 in liabilities for
unpaid payroll taxes arising out of payroll paid prior to December

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22, 2008, and (ii) $75,926.13 in liabilities for unpaid payroll taxes arising
out of payroll paid on December 22, 2008.

G.      Other Representations, Warranties and Covenants.

          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 Requisite
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

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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 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 $1,616,670.51. Furthermore, the Borrower covenants and agrees
that (i) it shall use its best efforts to negotiate a settlement with the IRS
with respect to any unpaid payroll taxes arising out of payroll paid prior to
the Amendment Effective Date in form and substance reasonably satisfactory to
Agent and (ii) it shall deliver to Agent, on a weekly basis delivered on each
Friday, or at such more frequent intervals as Agent may request from time to
time, an update of Borrower’s settlement negotiations with the IRS with respect
to such unpaid payroll taxes, accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable discretion.

          6.          The Borrower acknowledges and agrees that on or prior to
the Amendment Effective Date an Overadvance has occurred on each date set forth
on Schedule B attached hereto and that non-refundable fees have accrued and are
outstanding in the aggregate amount of $375,000 in accordance with Section
1.9(e) (such fees, collectively, the “Overadvance Fee”). Notwithstanding the
requirements of Section 1.9(e), Agent agrees that such Overadvance Fee shall be
payable, and Borrower covenants and agrees that it will pay the Overadvance Fee,
on the Commitment Termination Date.

          7.          The Borrower covenants and agrees that it shall deliver to
Agent the financial and other information (other than Borrower’s 10-Q for the
Fiscal Quarter ended September 30, 2007) required by Section 4.1 (a) and clause
(r) of Annex E of the Credit Agreement on or prior to February 1, 2009.

          8.          Each Credit Party covenants and agrees that it shall
deliver to Agent on or prior to January 15, 2009, or such later date as may be
agreed to by Agent in its sole discretion, landlord waivers from the lessor of
the leased properties located at 110 Summit Avenue, Montvale, New Jersey 07645
and 1001 Boardwalk Springs Place, Suite 150, O’Fallon, Missouri 63368 in form
and substance satisfactory to Agent.

          9.          Each Credit Party covenants and agrees that it shall
deliver to Agent, in form and substance reasonably satisfactory to Agent, the
items (or undertake the efforts) set forth in clauses (a) through (g) below, on
or before January 15, 2009:

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          (a)          a duly completed Security Questionnaire in the form
attached hereto as Exhibit A;

          (b)          four (4) fully-executed copies of a Joinder Agreement to
Amended and Restated Subsidiaries Security Agreement, duly executed and
delivered by Butler of New Jersey Realty Corp. (“Butler New Jersey”), together
with all instruments, documents and agreements executed pursuant thereto
(including, without limitation, a UCC-1 financing statement filed in favor of
Agent as secured party, listing Butler of New Jersey Realty Corp., as debtor);

          (c)          four (4) fully-executed copies of the Counterpart to the
Intellectual Property Security Agreement listing all newly registered Trademarks
owned by Holdings which are not currently subject to the Intellectual Property
Security Agreement, duly executed and delivered by Holdings;

          (d)          original stock certificates and stock powers for the
shares of Borrower, Butler Services International, Butler Telecom, Butler
Services, Inc., and Butler Utility Service, Inc;

          (e)          (i) an amendment to the Operating Agreement of Butler
Resources to provide that (A) the limited liability company interests of Butler
Resources shall be evidences by a certificate of a limited liability company
interest issued by Butler Resources, and (B) each limited liability company
interest in Butler Resources shall constitute a “security” within the meaning
of, and governed by Article 8 of the Uniform Commercial Code (including Section
8-102(o) thereof) as in effect from time to time in the State of Delaware and
Article 8 of the Uniform Commercial Code of any other applicable jurisdiction,
each in form and substance reasonably satisfactory to the Agent and (ii) a
certificate of a limited liability interest issued by Butler Resources in the
name of the Butler Services, LLC together with an instrument of transfer in the
name of Agent, each, with respect to clauses (i) and (ii) above in form and
substance reasonably acceptable to Agent;

          (f)          four (4) fully-executed copies of the Counterpart to the
Intellectual Property Security Agreement, duly executed and delivered by Butler
New Jersey, together with all instruments, documents and agreements executed
pursuant thereto, in form and substance reasonably satisfactory to Agent; and

          (g)          a qualification certificate to do business as a foreign
entity in New York and a good standing certificate under the laws of New York
for Butler Publishing.

          10.          The Agent, Lenders and Credit Parties hereby agree that
no later than January 15, 2009 the Agent, Lenders and Credit Parties shall have
negotiated, in good faith, and revised the levels included within the Event of
Default set forth in Section 8.1(n) of the Credit Agreement and the levels for
the financial covenants set forth in clauses (a) through (c) of Annex G for the
periods subsequent to September 30, 2008.

          11.          Each Credit Party hereby agrees that to the extent any
amendment, forbearance or other modification to the Second Lien Loan Documents
is entered into during the Forbearance

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Period, such amendment, forbearance or other modification to the Second Lien
Loan Documents shall be in form and substance reasonably satisfactory to Agent.

H.      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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AGENTS AND REQUISITE LENDERS:

 

GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
and a Lender

 

 

 

 

 

By:

/s/ James H. Kaufman

 

 

 

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Its Duly Authorized Signatory

Signature Page to Fourth Amendment to Second Forbearance Agreement

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AS BORROWER:

 

 

BUTLER SERVICE GROUP, INC.

 

 

By:

/s/ Edward Kopko

 

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Name: Edward Kopko

Title:   CEO

Signature Page to Fourth Amendment to Second Forbearance Agreement

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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.
BUTLER RESOURCES, LLC

 

 

By:

/s/ Edward Kopko

 

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Name: Edward Kopko

Title:   CEO

Signature Page to Fourth Amendment to Second Forbearance Agreement

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As of December 23, 2008
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SCHEDULE A

As of December 23, 2008, the principal balance due and owing of the Revolving
Loan was $24,336,138.69 and the aggregate outstanding Letter of Credit
Obligations was $2,689,515.

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As of December 23, 2008
Page 15 of 16

SCHEDULE B

OVERADVANCES

 

Date of Overadvance

 

July 15, 2008

 

July 16, 2008

 

July 17, 2008

 

July 18, 2008

 

July 21, 2008

 

July 22, 2008

 

July 23, 2008

 

July 24, 2008

 

July 25, 2008

 

July 28, 2008

 

September 12, 2008

 

October 14, 2008

 

October 15, 2008

 

October 16, 2008

 

October 17, 2008

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As of December 23, 2008
Page 16 of 16

EXHIBIT A

SECURITY QUESTIONNAIRE

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