THIRD FORBEARANCE AGREEMENT

THIS THIRD FORBEARANCE AGREEMENT (this “ Agreement ”) is made and entered into as of April 27, 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).

           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, Borrower, the other Credit Parties, Lenders and Agent entered into a Forbearance Agreement, dated as of April 20, 2009 (the “ Prior Forbearance Agreement ”), pursuant to which Lenders and Agent, inter alia , agreed to forbear from exercising their rights and remedies with respect to certain ongoing Defaults and Events of Default; and

           WHEREAS, on the date hereof, the aggregate outstanding principal balance of the Revolving Loan is $15,239,894.17; 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) of Annex G of the Credit Agreement for each of the August 1, 2008, August 15, 2008 and September 12, 2008, February 6, 2009, March 6, 2009, March 13, 2009, March 20, 2009, March 27, 2009, April 3, 2009, April 17, 2009 and April 24, 2009 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 Section 6.20 of the Second Lien Credit Agreement, (i) 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, (j) 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 (k) 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, Borrower recognizes the occurrence and continuance of the Existing Events of Default; and

           WHEREAS, the Prior Forbearance Agreement has expired under its own terms as of the date hereof; and

           WHEREAS, Borrower and Guarantors have each requested that Agent on behalf of 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 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 May 4, 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 Secti