Unassociated Document


    Exhibit
10.1

    


    FORBEARANCE
AGREEMENT

     

    THIS
FORBEARANCE AGREEMENT (this “Agreement”) is made
and entered into as of March 20, 2009, by and among, BUTLER SERVICE GROUP, INC.,
a New Jersey corporation (“Borrower”), the other
Credit Parties signatory hereto, the Lenders signatory hereto and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“GECC”), as Lender and
as administrative agent for the Lenders (in such capacity, the “Agent”) under the
Credit Agreement (as hereinafter defined).

     

    RECITALS

     

    WHEREAS, Borrower, the other Credit
Parties, Lenders and Agent are party to that certain Third Amended and Restated
Credit Agreement, dated as of August 29, 2007 (as amended to date, the “Credit Agreement”;
capitalized terms used herein and not defined herein shall have the meanings
assigned to them in the Credit Agreement), pursuant to which the Lenders have
made available to Borrower a revolving loan and other extensions of credit
(including letters of credit) in the original maximum principal amount of
$45,000,000; and

     

    WHEREAS, on the date hereof, the
aggregate outstanding principal balance of the Revolving Loan is $21,302,641.95;
and

     

    WHEREAS, Events of Default have
occurred and are continuing under Sections 8.1(b),
8.1(c), 8.1(d), 8.1(e), 8.1(f) and 8.1(l) of the Credit
Agreement arising out of (a) 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) Borrower’s delivery of a Borrowing Base Certificate to
Agent on July 22, 2008 which contained certain information which was untrue or
incorrect, (c) 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) 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)
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 delivered on or
prior to October 28, 2008, (f) 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, (g) Borrower’s failure to comply
with Section
6.1 of the Credit Agreement, (h) Borrower’s failure to comply with the
minimum Borrowing Availability covenant set forth in clause (d) of Annex G of the Credit
Agreement for the February 6, 2009, March 6, 2009, March 13, 2009 and March 20,
2009 testing dates as required to be maintained pursuant to Section 6.10 of the
Credit Agreement, (i) Borrower’s failure to comply with Section 6.20 of the
Second Lien Credit Agreement, (j) Borrower’s failure to comply with Section 4(f) of that
certain Seventh Amendment to Second Lien Credit Agreement dated as of December
31, 2008, (k) Borrower’s failure to comply with those certain Side Letters,
dated as of December 23, 2008 and January 15, 2009, respectively, by and among
Agent and the Credit Parties, by failing to enter into definitive purchase or
financing agreement for an asset sale or refinancing by not later than March 1,
2009, and (l) a Change of Control having occurred under Section 8.1(l) of the
Credit Agreement (collectively, the “Existing Events of
Default”); and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    WHEREAS, as a result of the occurrence
and continuance of the Existing Events of Default, Agent has the right to demand
immediate payment of all of the Obligations, to make demand upon Guarantors for
the payment of all of the Obligations and to exercise any and all rights and
remedies available to Agent and the Lenders at law, in equity or by agreement
(including, without limitation, pursuant to the Security Agreements and the
other Loan Documents) (collectively, "Rights and
Remedies"); and

     

    WHEREAS, the Borrower recognizes the
occurrence and continuance of the Existing Events of Default; and

     

    WHEREAS, the Borrower and Guarantors
have each requested that Agent on behalf of Lenders 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 Existing Events of Default; and

     

    WHEREAS,
Agent and Requisite Lenders are willing to grant such forbearance upon the terms
and subject to the conditions and limitations set forth herein.

     

    NOW,
THEREFORE, in consideration of the foregoing premises and the agreements and
undertakings contained herein, for $10.00, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as
follows:

    


    1. Acknowledgments by the
Credit Parties.  Borrower and each of the Credit Parties
acknowledges and agrees as follows:

     

    (a) Acknowledgment of
Default.  That on and as of the Effective Date (as defined
below): (i) Events of Default exist and continue to exist, including,
without limitation, the Existing Events of Default; (ii) timely, adequate and
proper notice (notwithstanding that such notice is not required under Section 8.2 of the
Credit Agreement) of the occurrence of the Existing Events of Default has been
received by Borrower and Guarantors from Agent (and Borrower waives any
requirement that any such notice be in writing); (iii) all grace periods, if
any, applicable to the cure of such Existing Events of Default after receipt of
such notice have expired; (iv) each of said Events of Default was and is
continuing without timely cure by the Borrower or Guarantors; and (v) Agent and
Lenders have not waived in any respect any or all of such Events of Default or
their respective Rights and Remedies with respect thereto.

     

    (b) Acknowledgment of Right of
Acceleration.  That (i) on and as of the Effective Date, the
Revolving Loan and all accrued and unpaid interest thereon, together with other
outstanding charges permissible under the Credit Agreement, are due and payable
in full, and Agent has the right to accelerate and declare all Obligations to be
immediately due and payable and to make demand upon Borrower and Guarantors for
the payment in full of all Obligations; (ii) such acceleration and demand for
payment is in all respects adequate and proper; (iii) that Agent on its own
behalf, or on behalf of the Lenders, has the right to exercise all other rights
and remedies permitted under the Loan Documents; and (iv) Borrower waives any
and all further notice, presentment, notice of dishonor or demand with respect
to the Obligations.

     

    (c) Acknowledgment of
Obligations.  That on and as of the Effective Date,
(i) Borrower is indebted to Lenders in the amount set forth in the recitals
to this Agreement, plus costs and fees payable pursuant to and in accordance
with the Credit Agreement; (ii) all such amounts are due and payable in full,
without offset, deduction or counterclaim of any kind or character whatsoever,
but are subject to increase, decrease or other adjustment as a result of any and
all interest, fees and other charges including, without limitation, attorneys’
fees and costs of collection, which are payable to Agent and Lenders under the
Credit Agreement and the other Loan Documents; and (iii) Agent’s liens and
security interests in the Collateral are fully enforceable, non-avoidable and of
first priority status (provided, that with
respect to the Montvale Property Agent’s liens and security interests are of
second priority status subject only to the lien of the Second Lien
Agent).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Acknowledgment that
Liabilities Continue in Full Force and Effect.  That the Credit
Agreement, the other Loan Documents, and all other respective liabilities and
obligations of Borrower to Agent and Lenders shall, except as expressly modified
herein, remain in full force and effect, and shall not be released, impaired,
diminished or in any other way modified or amended as a result of the execution
and delivery of this Agreement or by the agreements and undertakings of the
parties contained herein.

     

    2. Agreement to
Forbear.

     

    (a) For the
period (the “Forbearance Period”)
beginning as of the date first above written and ending on the earlier to occur
of (a) 5:00 p.m., New York time, on April 20, 2009, and (b) termination of this
forbearance as provided herein, Agent and Lenders, without waiving, curing or
ceasing the continuance of the Existing Events of Default, hereby agree to
forbear from the exercise of any of their Rights and Remedies available under
the Credit Agreement and the Loan Documents on account of the Existing Events of
Default.  Neither Agent nor Lenders shall have any obligation to make
any Loans, issue, extend or renew, and Borrower shall not request the issuance,
extension or renewal of, any Letters of Credit or otherwise extend credit to
Borrower under the Credit Agreement during the Forbearance
Period.  Lenders have considered and will continue to consider during
the Forbearance Period, in their sole discretion, whether to honor borrowing
requests or requests for issuances of Letters of Credit which shall, in any
case, be made pursuant to and in compliance with the Budget (as hereinafter
defined).  Any past or future Loans to, or issuances of Letters of
Credit for the account of, Borrower should not be considered an agreement,
express or implied, on the part of Lenders to make any additional Loans or to
issue any additional Letters of Credit or an agreement to waive any terms of the
Credit Agreement in the future, including, without limitation, the satisfaction
of conditions precedent to funding.  Agent’s and Lenders’ forbearance
provided for herein shall be effective only with respect to the Existing Events
of Default and shall 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, in Agent’s
discretion by a written notice to Borrower upon or after the occurrence of any
other Default or Event of Default under the Credit Agreement or any Loan
Document (other than the Existing Events of Default) or a Default or Event of
Default under the terms of this Agreement (individually a “Forbearance Default”
and, collectively, the “Forbearance
Defaults”).

     

    (b) During
the Forbearance Period, and provided Agent has not elected to terminate the
Forbearance Period following the occurrence of a Forbearance Default in its
discretion in accordance with the last sentence of Section 2(a) of this
Agreement and that the terms and conditions of this Agreement are otherwise
satisfied, Agent and Lenders agree that Agent shall not accelerate, nor shall
Lenders direct Agent to accelerate, the Obligations owed to Lenders under the
Credit Agreement or otherwise exercise any of their rights and remedies, in each
case, as a result of the Existing Events of Default outlined
herein.

     

    (c) Each of
the parties hereto agree that any making of Loans or issuances of additional
Letters of Credit in the Lenders’ discretion as described in Section 2(a) of this
Agreement, whether now or at any time in the future, shall constitute
Obligations under the Credit Agreement and Overadvances made under Section 1.1(a)(iii)
of the Credit Agreement to protect and preserve the Collateral and the interests
of the Lenders.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Covenants.

     

    (a) From and
after the date of this Agreement, the Borrower agrees to expend funds solely in
accordance with a budget attached to this Agreement as Exhibit A (the
“Budget”).  Under
no circumstances will the Borrower exceed the total budgeted amount or the
amounts of any expenditures contained in the Budget, except as authorized in
writing by Agent.  The Borrower may amend the Budget, provided that
the Budget, as so amended, has been previously approved by Agent in
writing.

     

    (b) Borrower
and each other Credit Party agrees to provide to Agent such resolutions and such
other documents, instruments and agreements as Agent may reasonably
request.

     

    (c) 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 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 $866,300.

     

    (d) The
Borrower shall deliver to Agent, on a weekly basis no later than 9:00 a.m. (New
York time) on each Tuesday, a variance report setting forth the actual receipts
and disbursements to the Budget for such week and a comparison to the actual
receipts and disbursements to the Budget for the prior week.

     

    (e) The
Borrower acknowledges and agrees that on or prior to the Effective Date
Overadvances have occurred and that non-refundable fees have accrued and are
outstanding in the aggregate amount of $1,500,000 in accordance with Section 1.9(e) of the
Credit Agreement (such fees, collectively, the “Overadvance
Fee”).  Notwithstanding the requirements of Section 1.9(e) of the
Credit Agreement, 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.

     

    4. Representations and
Warranties.  The Borrower and each other Credit Party
represents and warrants to Agent and Lenders that: (i) it has had the
opportunity to consult with counsel, and has been fully advised by legal counsel
of its rights and responsibilities under this Agreement and of the legal effect
hereof; (ii) it has read and fully understands the contents of this Agreement,
and each has freely and voluntarily executed this Agreement; (iii) it is
sophisticated and knowledgeable in financial matters, both generally and with
respect to transactions of the type described in the Loan Documents and the
modification to these transactions to be effected by this Agreement and the
documents, instruments and transactions contemplated thereby; (iv) it has
received and has independently reviewed and evaluated a copy of this Agreement
and all other documents and instruments executed or delivered in connection
therewith, and fully understand the transactions contemplated thereby; (v) it
has made such independent review and evaluation, as well as all other decisions
pertaining to the execution and delivery of this Agreement, without any reliance
upon any oral or written representation, warranty, advice or analysis of any
kind whatsoever from the Released Parties (as defined below), however obtained;
(vi) it has determined, following such independent review and evaluation, that
the benefits of the transactions contemplated by this Agreement are direct and
substantial; (vii) the individual signing this Agreement on behalf of the
Borrower and each other Credit Party is duly authorized and fully empowered to
do so; (viii) the consideration flowing to Borrower and each other Credit Party
under this Agreement is in all respects substantial and sufficient; (ix) this
Agreement has been duly and validly executed and delivered by the Borrower and
each other Credit Party and is the valid and legally binding obligation of the
Borrower, enforceable in accordance with its terms, (x) Agent and Lenders are
authorized to discuss financial and other matters related to the Borrower and
each other Credit Party, (xi) the Borrower and each other Credit Party hereby
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement and the other Loan Documents as fully as if made
on the Closing Date and with specific reference to this Agreement and all other
Loan Documents executed and/or delivered in connection herewith, but excluding
therefrom the effect of the Existing Events of Default, and (xii) as of March
19, 2009, the aggregate amount of liabilities of the Borrower and the other
Credit Parties for unpaid payroll taxes equals $866,300, consisting of (i)
$809,364 in liabilities for unpaid payroll taxes arising out of payroll paid
prior to March 16, 2009, and (ii) $56,935 in liabilities for unpaid payroll
taxes arising out of payroll paid on March 19, 2009.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. No
Novation.  Nothing in this Agreement shall be construed to
constitute a novation of the Notes or any other Obligations arising under the
Loan Documents, related to any of the Notes, or to release, satisfy, discharge
or otherwise affect or impair in any manner whatsoever: (i) the validity or
enforceability of the Notes or any other Obligations arising under the Credit
Agreement or any other Loan Document; (ii) the charges, liens, pledges, security
interests, assignments and conveyances effected by any agreement securing the
Obligations arising under the Credit Agreement or any other Loan Document, or
the priority thereof; (iii) the liability of Guarantors and Borrower under the
Credit Agreement and all other Loan Documents or any other person that may now
or hereafter be liable under the Credit Agreement and the other Loan Documents
or any agreement securing the same; and (iv) any other security or instrument
now or hereafter held by Agent as security for or as evidence of any of the
above described indebtedness.  Without limiting the foregoing, the
parties agree that Agent and Lenders hereby reserve any and all legal rights and
remedies available to them at law, in equity, under the Credit Agreement and the
Loan Documents.

     

    6. Strict
Compliance.  As a result of Agent and Lenders’ current and
prior accommodations to Borrower, to ensure that there is no misunderstanding
and to provide Borrower with reasonable notice that Agent and Lenders intend to
rely on the exact terms of the Credit Agreement, as amended, Borrower is hereby
notified that Agent and Lenders will insist on strict compliance with the Credit
Agreement, except as otherwise provided herein.

     

    7. Outstanding Obligations;
Release.

     

    (a) Each of
Borrower and the other Credit Parties hereby acknowledges and agrees that as of
March 20, 2009, the aggregate outstanding principal amount of the Revolving Loan
is $21,302,641.95 (of which $1,969,516 constitutes the aggregate outstanding
Letters of Credit Obligations), and that such principal amounts are payable
pursuant to the Credit Agreement without defense, offset, withholding,
counterclaim or deduction of any kind.  Borrower, on behalf of itself
and the other Credit Parties hereby releases, acquits, forever discharges and
covenants not to sue GECC, Agent or any of the Lenders, and each and every past
and present subsidiary, affiliate, stockholder, officer, director, agent,
servant, employee, representative, and attorney of GECC, Agent and each Lender
(collectively, the “Released Parties”),
from or for any and all claims, causes of action, suits, debts, liens,
obligations, liabilities, demands, losses, costs and expenses (including
attorneys’ fees) of any kind, character or nature whatsoever, known or unknown,
fixed or contingent, which any Borrower or any other Credit Party may have or
claim to have now arising out of or connected with any act of commission or
omission of GECC, Agent or any of the Lenders existing or occurring prior to the
Effective Date or any instrument executed prior to the Effective Date including,
without limitation, any claims, liabilities or obligations arising with respect
to the Obligations evidenced by the Credit Agreement, the Loans or any of the
Loan Documents.  The provisions of this Agreement shall be binding
upon the Borrower and each other Credit Party shall inure to the benefit of
GECC, Agent and each of the Lenders, and shall likewise be binding upon the
Borrower’s and each other Credit Party’s respective heirs, executors,
administrators, successors and assigns.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Each
Credit Party that is a signatory hereto shall jointly and severally indemnify
and hold harmless each of GECC, Agent, Lenders and their respective Affiliates,
and each such Person’s respective officers, directors, employees, attorneys,
agents and representatives (each, an “Indemnified Party”),
from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under the Credit Agreement, this Agreement or any other
Loan Document and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including but not limited
to, the enforcement of Agent and Lenders’ rights and remedies under this
Agreement, and any other instruments or documents delivered in connection with
this Agreement and all Environmental Liabilities and legal costs and expenses
arising out of or incurred in connection with disputes between or among any
parties to this Agreement or any of the Loan Documents; provided, that no
such Credit Party shall be liable for any indemnification to an Indemnified
Party to the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that  Indemnified Party’s gross
negligence or willful misconduct.  To the extent that the undertaking
to indemnify set forth in this paragraph may be unenforceable because it
violates any law or public policy, Borrower, on behalf of itself and the other
Credit Parties shall satisfy such undertaking to the maximum extent permitted by
law.  Any liability, obligation, loss, damage, penalty, cost or
expense covered by this indemnity shall be paid to each Indemnified Party upon
demand, and, failing prompt payment, shall, together with interest thereon at
the Default Rate from the date incurred by each Indemnified Party until paid, be
added to the Obligations of the Borrower and be secured by the Collateral,
within the meaning of the Agreement.  The provisions of this section
shall survive the satisfaction and payment of the other Obligations, the
termination of any additional funding by Lenders and the termination of this
Agreement.

     

    8. Receipt and Application of
Payments.  Borrower acknowledges and agrees that Agent shall be
entitled during the term of this Agreement to accept such payments and proceeds
as are remitted pursuant to any provision of the Loan Documents or this
Agreement, that Agent shall be entitled to apply any and all such proceeds and
payments against the liabilities and obligations owed by Borrower and Guarantors
to Agent and Lenders in such order of application as Agent in its sole and
absolute discretion shall determine proper, and that the acceptance by Agent of
any such proceeds and payments as are remitted pursuant to the Loan Documents or
this Agreement or otherwise shall in no way affect or impair the status of the
Obligations owed to Agent and Lenders by the Borrower or Guarantors or be deemed
to be a waiver of any Event of Default or any acquiescence therein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9. Events of
Default.

     

    The
following shall constitute Events of Default under this Agreement:

     

    (a) The
Borrower expends any funds in any manner inconsistent with the
Budget.

     

    (b) The
Borrower or any other Credit Party violates any covenant, representation or
warranty under this Agreement.

     

    (c) The
Borrower or any other Credit Party violates any covenant, representation or
warranty under the Credit Agreement or any other Loan Document.

     

    (d) The
commencement by Second Lien Collateral Agent of a Standstill Period (as such
terms are defined in the Intercreditor Agreement).

     

    (e) 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.

     

    (f) Any Event
of Default under the Credit Agreement other than an Existing Event of Default
shall occur.

     

    In the
event any such Event of Default under this Agreement exists, in Agent’s sole
discretion and upon written notice to the Borrower by Agent, Borrower’s right to
any funding under the Credit Agreement shall terminate
immediately.  The provisions of Section 7 of
this Agreement shall survive an Event of Default under this
Agreement.

     

    10. Effectiveness.  This
Agreement shall become effective as of March 20, 2009 (the “Effective Date”) only
upon Agent’s receipt of four (4) fully-executed copies of this Agreement, duly
executed and delivered by Agent, Requisite Lenders, Borrower and each other
Credit Party.

     

    11. Miscellaneous.

     

    (a) Retention of
Consultant.  The Borrower has previously retained and, unless
otherwise agreed to by Agent in its sole discretion, covenants and agrees to
continue to retain the services of RAS Management, Inc. (the “Consultant”) to (i)
market the Borrower’s assets, including all real and personal property, for sale
in a manner acceptable to Agent in its reasonable discretion, (ii) effectuate
the sale of the Borrower’s property in a manner reasonably acceptable to Agent
in its sole discretion, and (iii) provide Agent with information including,
without limitation, information concerning offers, proceeds of sales, and other
items concerning the Borrower’s assets as Agent shall request from time to
time.  Each of the Credit Parties irrevocably authorize, and shall
cause, the Consultant to (x) disclose to Agent and Lenders the nature or content
of any oral or written communication prepared by the Consultant or any
information gained from the inspection of any record or document of such Credit
Party by the Consultant and (y) communicate with Agent and Lenders concerning,
and disclose fully and promptly to Agent and the Lenders and their respective
representatives, all developments in connection with the efforts of the Credit
Parties and the Consultant described herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Entire Agreement;
Amendments.  This Agreement reflects the entire understanding
of the parties with respect to the subject matter herein contained and
supersedes any prior agreements, whether written or oral, in regard
thereto.  This Agreement may not be amended or modified and the
Forbearance Period extended unless agreed to in writing executed by all parties
signatory to this Agreement or as may otherwise be provided for under the terms
of the Credit Agreement and the other Loan Documents.  This Agreement
shall constitute a Loan Document for all purposes under the Credit
Agreement.

     

    (c) Full Force and
Effect.  Except as expressly modified herein, all terms of the
Loan Documents, including the Credit Agreement and Guaranties, shall be and
shall remain in full force and effect and shall constitute the legal, valid,
binding and enforceable obligations of Borrower and Guarantors, as applicable,
to Agent and Lenders.

     

    (d) No
Waiver.  This Agreement is not intended to operate as, and
shall not be construed as, a waiver of any Event of Default, including the
Existing Events of Default, whether known or unknown to Agent or Lenders, as to
which all rights of Agent and Lenders, including all rights of foreclosure,
shall remain reserved.

     

    (e) GOVERNING
LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.

     

    (f) WAIVER OF RIGHT TO JURY
TRIAL.  THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT.

     

    (g) Counterparts.  This
Agreement may be executed in multiple counterparts, each of which shall be an
original and all of which, taken together, shall constitute but one and the same
agreement among the parties.

     

    (h) Binding
Nature.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.

     

    (i) Captions.  The
captions to the Sections and paragraphs of the Agreement are for the convenience
of the parties only, and are not a part of this Agreement.

     

    (j) Time of the
Essence.  Time is of the essence under this
Agreement.

     

    (k) No Third-Party
Beneficiaries.  The parties agree that no such third-party
beneficiaries are intended under this Agreement, and, except as expressly set
forth herein, nothing in this Agreement shall create any rights for or in any
person or entity who is not a party to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (l) Notice.  Any
notices required to be provided to Agent shall be served upon:

     

    If to Agent or GECC, at

    General Electric Capital
Corporation

    201 Merritt 7

    P.O. Box 5201

    Norwalk,
CT  06856-5201

    Attention: James Kaufman

    Telephone No.:  (203)
229-1832

    Telecopier
No.:  (203) 567-8200

     

    with
copies to:

     

    Paul, Hastings, Janofsky & Walker
LLP

    75 E. 55th St.

    New York, NY 10022

    Attention:  Richard
Denhup

    Telephone
No.:  (212) 230-5161

    Telecopier
No.:  (212) 318-6366

    


    General Electric Capital
Corporation

    201 Merritt

    P.O. Box 5201

    Norwalk,
CT  06856-5201

    Attention:  Corporate
Counsel-Commercial Finance

    Telephone No.:  (203)
956-4381

    Telecopier
No.:  (203) 956-4259

    


    Any
notices required to be provided to the Borrower shall be served
upon:

     

    Butler Service Group, Inc.

    110 Summit Avenue

    Montvale,
NJ  07645

    Attention: Ron Uyematsu

    Telephone No.:  (310)
591-8731

    Telecopier
No.:  (201) 573-9723

     

    with a
copy to:

     

    Moses
& Singer LLP

    The
Chrysler Building

    405
Lexington Avenue

    NY, NY
10174-1299

    Attention:  Jeffrey
M. Davis

    Telephone
No.: (212) 554-7837

    Telecopier
No.: (917) 206-4337

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties have hereunto set their hands effective as of the
date first above written.

     

    [Signature Pages
Follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

      
        
          	 	BUTLER SERVICE GROUP, INC.,
      as Borrower	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Gerald
      P. Simone	 
	 	 	

                  Name:
      Gerald P. Simone

                  Title:
      SVP Finance & Accounting

                	 
	 	 	 	 
	 	 	 	 


        

      

    

     

    
      
        	 	GENERAL ELECTRIC CAPITAL
      CORPORATION, as Agent and Lender	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Dave
      Kopchick	 
	 	 	Name: Dave
      Kopchick                                                        
      

                Title:   Duly
      Authorized Signatory

              	 
	 	 	 	 
	 	 	 	 


      

    

    
    

    


    The
following Persons are signatories to this Amendment in their capacity as Credit
Parties and not as Borrower.

     

    


     

    
      	
              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/ Gerald P. Simone

              Name:
      Gerald P. Simone

              Title:
      SVP Finance &
Accounting