-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DZRids1rteqJxJsWo4QlLwC9IVBQg/Owm/3OJ2Dds2AUiQIY857j1zJknS5GKvSP iauUVk8a1e17dyNmKsHKEA== 0001169232-06-004836.txt : 20061221 0001169232-06-004836.hdr.sgml : 20061221 20061221172654 ACCESSION NUMBER: 0001169232-06-004836 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20061215 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061221 DATE AS OF CHANGE: 20061221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUTLER INTERNATIONAL INC /MD/ CENTRAL INDEX KEY: 0000786765 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 061154321 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14951 FILM NUMBER: 061294320 BUSINESS ADDRESS: STREET 1: 110 SUMMIT AVE CITY: MONTVALE STATE: NJ ZIP: 07645 BUSINESS PHONE: 2015738000 MAIL ADDRESS: STREET 1: 110 SUMMIT AVENUE STREET 2: 110 SUMMIT AVENUE CITY: MONTVALE STATE: NJ ZIP: 07645 FORMER COMPANY: FORMER CONFORMED NAME: NORTH AMERICAN VENTURES INC DATE OF NAME CHANGE: 19920703 8-K 1 d70210_8-k.htm CURRENT REPORT


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): December 15, 2006

BUTLER INTERNATIONAL, INC.
(Exact name of Registrant as specified in Charter)

 

 

 

 

 

MARYLAND

 

0-14951

 

06-1154321


 


 


(State or other jurisdiction of

 

(Commission File No.)

 

(I.R.S. Employer

incorporation or organization)

 

 

 

Identification No.)

110 Summit Avenue, Montvale, New Jersey 07645

(Address of Principal Executive Offices/Zip Code)

Registrant’s telephone number, including area code: (201) 573-8000

Not Applicable
(Former Name or Former Address, if Changed Since
Last Report)

          Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o          Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o          Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o          Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(e))




TABLE OF CONTENTS

 

 

 

INFORMATION TO BE INCLUDED IN THE REPORT

 

ITEM 1.01

Entry into a Material Definitive Agreement

 

ITEM 3.02

Unregistered Sale of Equity Securities

 

ITEM 9.01

Exhibits

SIGNATURE

EXHIBIT INDEX

EXHIBIT 10.1

2



 

 

ITEM 1.01

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

          (a)          On December 15, 2006, the Company entered into a Fifteenth Amendment to Credit Agreement (“Fifteenth Amendment”) with General Electric Capital Corporation (“GECC”). The Fifteenth Amendment provides, among other matters, for an extension of the termination date of the credit facility and term loans from April 30, 2007 to June 30, 2007.

          The foregoing description of the Fifteenth Amendment is not, and does not purport to be, complete and is qualified in its entirety by reference to a copy of the same filed as Exhibit 10.1 hereto and incorporated herein in its entirety by this reference.

          (b)          In addition, on December 21, 2006, the Company announced that it had closed on the sale to certain institutional and non-institutional investors (the “Investors”) of $8,500,000 in shares of Series A 7% Preferred Stock (the “Shares”) and warrants to purchase 2,125,000 shares of the Company’s Common Stock at $2.00 per share (individually, “Warrant” and collectively, “Warrants”) in a private placement (the “Offering”). The Warrants are callable under certain circumstances. Each Share, along with Warrants to purchase 250 shares of the Company’s Common Stock, was issued at a price of $1,000. The Shares are not convertible into Common Stock. A copy of the Articles Supplementary (“Articles Supplementary”) Establishing and Fixing the Rights and Preferences of A Series of Shares of Preferred Stock (“Series A Preferred Stock”) is attached as Exhibit 4.1 to this Current Report on Form 8-K.

          In connection with the Offering, the Company entered into a Registration Rights Agreement with the Investors, pursuant to which the Company granted the Investors certain registration rights with respect to the Shares. The Shares sold to the Investors have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements. The form of the Registration Rights Agreement between the Company and the institutional investors is attached as Exhibit 10.2 to this Current Report on Form 8-K and the form of the Registration Rights Agreement between the Company and the non-institutional investors is attached as Exhibit 10.3 to this Current Report on Form 8-K. The form of the Warrant granted to the institutional investors is attached as Exhibit 10.4 to this Current Report on Form 8-K and the form of the Warrant granted to the non-institutional investors is attached as Exhibit 10.5 to this Current Report on Form 8-K. The form of the Subscription Agreement between the Company and the institutional investors is attached as Exhibit 10.6 to this Current Report on Form 8-K.

          The Shares and Warrants were offered and sold only to “accredited investors” (as defined in section 501(a) of Regulation D under the Securities Act) pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act. All exhibits attached hereto are incorporated herein by reference.

          The foregoing descriptions of the Shares, the Registration Rights Agreement and the Warrants are not, and do not purport to be, complete, and are qualified in their entirety by references to copies of the Articles Supplementary, forms of Registration Rights Agreements, and forms of Warrants filed as Exhibits 10.2 through 10.6 hereof.

          A copy of the Press Release announcing the transaction is attached hereto as Exhibit 99.1.

3



 

 

ITEM 3.02

UNREGISTERED SALES OF EQUITY SECURITIES

          The information set forth under Item 1.01(b) is incorporated by reference.

 

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS


 

 

 

 

(a)

Not applicable.

 

 

 

 

(b)

Not applicable.

 

 

 

 

(c)

Exhibits

          The exhibits listed below are being furnished pursuant to Item 9.01.

 

 

 

Exhibit Number

 

Description


 


 

 

 

4.1

 

Articles Supplementary dated December 18, 2006 Establishing and Fixing the Rights and Preferences of A Series of Shares of Preferred Stock.

 

 

 

10.1

 

Fifteenth Amendment to Credit Agreement dated December 14, 2006, by and among Butler International, Inc., a Maryland corporation (“BI”), certain of its subsidiaries, and General Electric Capital Corporation (“GECC”).

 

 

 

10.2

 

Form of Registration Rights Agreement dated December 15, 2006, between BI and certain institutional investors.

 

 

 

10.3

 

Form of Registration Rights Agreement dated December 15, 2006, between BI and certain non-institutional investors.

 

 

 

10.4

 

Form of Warrant dated December 15, 2006, issued by BI to certain institutional investors.

 

 

 

10.5

 

Form of Warrant dated December 15, 2006, issued by BI to certain non-institutional investors.

 

 

 

10.6

 

Form of Subscription Agreement dated December 15, 2006 between BI and certain institutional investors.

4



SIGNATURES

          Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

Date: December 21, 2006

 

BUTLER INTERNATIONAL, INC.

 

 

 

 

 

 

By:

/s/ Mark Koscinski

 

 

 


 

 

 

Mark Koscinski

 

 

 

Principal Accounting Officer

5



BUTLER INTERNATIONAL, INC.
EXHIBIT LIST

 

 

 

Exhibit Number

 

Description


 


 

 

 

4.1

 

Articles Supplementary dated December 18, 2006 Establishing and Fixing the Rights and Preferences of A Series of Shares of Preferred Stock.

 

 

 

10.1

 

Fifteenth Amendment to Credit Agreement dated December 14, 2006, by and among Butler International, Inc., a Maryland corporation (“BI”), certain of its subsidiaries, and General Electric Capital Corporation (“GECC”).

 

 

 

10.2

 

Form of Registration Rights Agreement dated December 15, 2006, between BI and certain institutional investors.

 

 

 

10.3

 

Form of Registration Rights Agreement dated December 15, 2006, between BI and certain non-institutional investors.

 

 

 

10.4

 

Form of Warrant dated December 15, 2006, issued by BI to certain institutional investors.

 

 

 

10.5

 

Form of Warrant dated December 15, 2006, issued by BI to certain non-institutional investors.

 

 

 

10.6

 

Form of Subscription Agreement dated December 15, 2006 between BI and certain institutional investors.

 

 

 

99.1

 

Press Release.

 

 

 

6


EX-4.1 2 d70210_ex4-1.htm ARTICLES SUPPLEMENTARY

EXHIBIT 4.1

ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF A SERIES OF
SHARES OF PREFERRED STOCK

          BUTLER INTERNATIONAL, INC., a Maryland corporation, having its principal office in Montvale, New Jersey (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

          FIRST: Under a power contained in Section 2-208 of the Maryland General Corporation Law and Article Fifth of the Corporation’s Articles of Incorporation (as amended, the “Charter”), the Board of Directors (the “Board”), by resolutions duly adopted on November 10, 2006 and December 18, 2006, classified and designated 15,000 shares of the unissued preferred stock, par value $0.001 per share, of the Corporation as Series A 7% Preferred Stock (the “Series A Preferred Stock”) and has provided for the issuance of such series.

          SECOND: The terms of the Series A Preferred Stock as set by the Board, including preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption, are as follows:

A.      RANKING

          The Series A Preferred Stock shall, with respect to dividend rights and rights of liquidation, dissolution and winding up, rank senior to (a) the common stock of the Corporation, par value $0.001 per share (the “Common Stock”), (b) the Series B 7% Cumulative Convertible Preferred Stock of the Corporation, par value $0.001 per share (the “Series B Preferred Stock”), and (c) all other classes and series of stock of the Corporation, whether authorized now or in the future, that do not expressly provide that such class or series of stock ranks on a parity with the Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively, with the Common Stock and the Series B Preferred Stock, the “Junior Stock”). The Corporation shall not issue shares that rank senior to the Series A Preferred Stock with respect to dividend rights and rights of liquidation, dissolution and winding up.

B.      DIVIDENDS

          1.     Dividend Rate. Holders of shares of Series A Preferred Stock (the “Series A Investors”) shall be entitled to receive out of funds legally available therefor (the “Legally Available Funds”), dividends at the annual rate of 7% per annum (the “Dividend Rate”) per share of Series A Preferred Stock, based upon the amount of $1,000.00 per share (the “Liquidation Value”). Such dividends shall be payable semi-annually on the last day of December and June in each year commencing December 31, 2006, or if any such day is not a business day in the state of New Jersey, then the next succeeding business day in such State (the “Dividend Payment Dates”). Such dividends shall be paid to the holders of record at the close of business on the date



specified by the Board; provided, however, that such record date shall not be more than sixty (60) nor less than thirty (30) days prior to the Dividend Payment Date upon which such dividends shall be paid. Dividends on the Series A Preferred Stock will be cumulative, whether or not earned or declared.

          2.     Dividends Payable in Kind. Except as provided below, the Corporation may, at its option, pay all or part of the dividends on the Series A Preferred Stock by issuing and delivering shares of Series A Preferred Stock to the holders of Series A Preferred Stock at the Dividend Rate; provided, however, that if a holder of Series A Preferred Stock notifies the Secretary of the Corporation, not more than 60 days nor less than 30 days prior to a Dividend Payment Date, of his election to receive either shares of Series A Preferred Stock or cash in lieu of shares of Series A Preferred Stock, then the Corporation shall pay to such holder, at such Dividend Payment Date, dividends in either shares of Series A Preferred Stock or cash in lieu of shares of Series A Preferred Stock, at the holder’s election. In computing the amount of dividends accrued in respect of a fractional year, such amount shall be computed on the basis of a 360-day year of twelve 30-day months and actual number of days elapsed.

          3.     Reservation of Series A Preferred Stock. Until the date upon which no shares of Series A Preferred Stock are outstanding, the Corporation shall reserve and keep available out of its authorized and unissued Preferred Stock, solely for the purpose of paying dividends thereon pursuant to the preceding paragraph, such number of shares of Series A Preferred Stock as shall from time to time be sufficient for such purpose. The Board shall, from time to time, if necessary, propose to the stockholders of the Corporation amendments to the Charter to increase its authorized capital stock and take such other actions as may be necessary to permit the issuance from time to time of shares of Series A Preferred Stock upon the declaration of any dividend payable in shares of Series A Preferred Stock.

          4.     Fractional Shares of Series A Preferred Stock. Fractional shares of Series A Preferred Stock shall be issued to the extent necessary to make dividend payments in shares of Series A Preferred Stock.

          5.     Insufficient Funds for Payment of Series A Preferred Stock. All dividends paid in respect of the Series A Preferred Stock pursuant to this Section B shall be paid pro rata to the holders entitled thereto. In the event that the Legally Available Funds for the payment of dividends shall be insufficient for the payment of the entire amount of dividends payable at any Dividend Payment Date, then the amount of any available surplus shall be allocated for the payment of dividends with respect to the Series A Preferred Stock pro rata based upon the Liquidation Value of the outstanding shares and all unpaid dividends shall continue to accrue, whether or not earned or declared.

          6.     Restrictions on Payment of Dividends. So long as any shares of Series A Preferred Stock are outstanding, no dividends shall be paid or other distribution made on any Junior Stock (other than dividends paid or distributions made solely in additional shares of Common Stock), nor shall the Corporation redeem, purchase or otherwise acquire, or permit any subsidiary of the Corporation to purchase or otherwise acquire (or declare, pay or set aside for payment money for a sinking fund or other similar fund for such redemption, purchase, acquisition or retirement), any Junior Stock (including any warrants, rights, calls or options

- 2 -



exercisable for or convertible into any of such Junior Stock), except that the Corporation may pay cash or stock dividends on the Series B Preferred Stock.

C.      LIQUIDATION

          1.     General. In the event of any liquidation, dissolution or winding up of the Corporation, then out of the assets of the Corporation before any distribution or payment to the holders of the Junior Stock, the holders of shares of Series A Preferred Stock shall be entitled to be paid the Liquidation Value per share (or a pro rata portion thereof with respect to fractional shares) plus all accrued but unpaid dividends thereon. In the event of any liquidation, dissolution or winding up of the Corporation, the Corporation by resolution of the Board shall, to the extent of any Legally Available Funds therefor, declare a dividend payable in cash on the Series A Preferred Stock payable before any distribution is made to any holders of Junior Stock, in an amount equal to the accrued and unpaid dividends, calculated at the Dividend Rate, on the Series A Preferred Stock up to and including the date of such liquidation, dissolution or winding up and, if the Corporation does not have sufficient Legally Available Funds to declare and pay all dividends in cash so accrued, an amount payable in cash equal to any remaining accrued and unpaid dividends, calculated at the Dividend Rate, shall be added to the amount to be received by the holders of the Series A Preferred Stock for such Series A Preferred Stock upon such liquidation, dissolution or winding up. The holders of the Series A Preferred Stock shall be entitled to no other or further distribution in connection with such liquidation, dissolution or winding up.

          2.     Insufficient Funds for Payment of Series A Preferred Stock. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation available for distribution to the holders of Series A Preferred Stock shall be insufficient to permit payment in full to such holders the sums which such holders are entitled to receive in such case, then all of the assets available for distribution to the holders of the Series A Preferred Stock shall be distributed among and paid to such holders, ratably in proportion to the respective amounts that would be payable to such holders if such assets were sufficient to permit payment in full. The holders of the Series A Preferred Stock shall be entitled to no other or further distribution in connection with such liquidation, dissolution or winding up.

D.      REDEMPTION.

          1.     Optional Redemption by Corporation. On any Dividend Payment Date on or after December 31, 2006, the Corporation may, at its option, redeem the Series A Preferred Stock, at any time in whole or from time to time in part, at a redemption price equal to one hundred one percent (101%) of the Liquidation Value per share of the Series A Preferred Stock, together with an amount in cash equal to accrued and unpaid dividends thereupon, calculated at the Dividend Rate to the date fixed for redemption thereof (the “Redemption Price”).

          2.     Mandatory Redemption After December 31, 2011. On December 31, 2011, to the extent the Corporation shall have Legally Available Funds therefor, the Corporation shall redeem all remaining outstanding shares of Series A Preferred Stock at the Redemption Price (the “Mandatory Redemption”).

- 3 -



          3.     Equitable Adjustment of Redemption Price. The Redemption Price set forth in this Section D shall be subject to equitable adjustment whenever there shall occur a stock split, stock dividend, combination, reorganization, recapitalization, reclassification or other similar event involving a change in the number of outstanding shares of Series A Preferred Stock.

          4.     Notice of Redemption by Corporation. Notice of intention of the Corporation to redeem the Series A Preferred Stock, as provided in Section D.1 above, and of the date and place for redemption (the “Redemption Notice”) and shall be mailed by certified mail, return receipt requested, or by FedEx or similar overnight delivery or courier service or delivered (in person or by telecopy, telex, electronic mail or similar telecommunications equipment) against receipt to the party to whom it is to be given, mailed at least thirty (30) and not more than sixty (60) days prior to the date fixed for redemption (“Redemption Date”) to the holders of record of shares so to be redeemed at the address of the holders as shown by the records of the Corporation; provided, however, that no failure to mail the Redemption Notice nor any defect therein shall affect the validity of the proceeding for the redemption of any shares of Series A Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to mail such notice or except as to the holder where notice was defective. Each Redemption Notice shall state: (i) the Redemption Date; (ii) the number of shares to be redeemed from such holder; (iii) the Redemption Price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price; and (v) that dividends on the shares to be redeemed shall cease to accrue on the Redemption Date unless the Corporation defaults in making such payment.

          5.     Effect of Redemption. If the Redemption Notice has been mailed as aforesaid, from and after the Redemption Date (unless the Corporation shall default in providing money for the payment of the Redemption Price of the shares called for redemption), dividends on the shares of Series A Preferred Stock so redeemed shall cease to accrue, and said shares shall no longer be deemed to be issued and outstanding, and all rights of the holder thereof with respect to the Series A Preferred Stock (except the right to receive from the Corporation the Redemption Price) shall cease and terminate. Upon surrender in accordance with the Redemption Notice of the certificates for any shares of Series A Preferred Stock so redeemed (properly endorsed or assigned for transfer, if the Corporation shall so require in the Redemption Notice, by the holder of such shares of Series A Preferred Stock), the Corporation shall redeem such shares for the Redemption Price. In case less than all shares represented by any such surrendered certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

          6.     Retirement of Series A Preferred Stock. All Series A Preferred Stock redeemed or otherwise acquired by the Corporation shall be retired and cancelled and shall resume the status of authorized and unissued shares of Series A Preferred Stock, but shall not be reissued, until all shares of Series A Preferred Stock shall have been redeemed.

          7.     Redemption of Less Than All Series A Preferred Stock. If the Corporation shall determine to redeem less than all shares of Series A Preferred Stock then outstanding pursuant to Section D.1 above, then the shares to be redeemed shall be selected pro rata (as nearly as may be) so that the number of shares redeemed from each holder shall be the same proportion of all

- 4 -



the shares to be redeemed as the total number of shares of Series A Preferred Stock then held by such holder bears to the total number of shares of Series A Preferred Stock then outstanding.

E.       VOTING RIGHTS.

          1.     General. No voting rights are attached to the Series A Preferred Stock other than those rights (a) to vote on certain transactions, as described in Section E.2 below; and (b) to vote on certain Charter amendments, as described in Section E.3 below. On any matter on which the holders of Series A Preferred Stock are entitled to vote as a class (whether as expressly provided herein or as may be required by law), including any action by written consent, each share of Series A Preferred Stock shall have one vote per share. With respect to each matter on which the holders of Series A Preferred Stock are entitled to vote, the holder of each share of Series A Preferred Stock may designate a number of proxies equal to the number of votes to which the share is entitled, with each such proxy having the right to vote a whole number of votes on behalf of such holder.

          2.     Corporate Action. Except as expressly provided herein or as required by law, so long as any shares of Series A Preferred Stock remain outstanding, the Corporation shall not and shall not permit any of its Subsidiaries to, without the prior written consent of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the then outstanding Series A Preferred Stock, voting as a separate class (each share of Series A Preferred Stock to be entitled to one vote in each instance), (i) create, incur, assume or permit to exist any Debt, (ii) create, authorize or issue any class or series of preferred stock that ranks senior or pari passu to the Series A Preferred Stock as to dividends or upon liquidation, dissolution or winding up, (iii) while any dividends are unpaid on the Series A Preferred Stock, make any payment on any common stock or on any class or series of preferred stock that ranks junior to the Series A Preferred Stock as to dividends or upon liquidation, dissolution or winding up, (iv) issue any additional shares of common stock below the then current market price, other than at the request of any creditor of the Corporation or pursuant to the issuance of stock upon the exercise of stock options or stock warrants, or (v) make any payment to any employee or Affiliate of the Corporation other than in the ordinary course of business or pursuant to past practices; provided, however, that the prohibitions of this Section 2 shall not apply to to any Debt, or any refinancing thereof, or preferred stock issued or existing as of the date of the filing of these Articles. Nothing in this Section E.2 shall prohibit or limit the Corporation in creating or organizing an Affiliate for any purpose, including, without limitation, the acquisition of any Person not engaged in a business similar to any business conducted by the Corporation or its Subsidiaries.

                  For purposes of this Section E.2, the terms set forth below shall have the following meanings:

 

 

 

a.    “Affiliate” shall have the meaning set forth in Rule 12b-2 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934, as amended.

 

 

 

b.    “Debt” means (a) all obligations for borrowed money other than obligations under the Corporation’s senior secured credit facility as in existence on the date hereof or as hereafter refinanced, (b) all obligations evidenced by bonds, debentures, notes or other similar instruments, (c) all indebtedness of any person secured by a lien or encumbrance

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on all or substantially all of the assets or properties of the Corporation, whether or not such indebtedness is assumed by the Corporation, and (d) all indebtedness of any person guaranteed by the Corporation; provided, that “Debt” shall not include obligations or indebtedness incurred by the Corporation or its Subsidiaries in the ordinary course of business including, by way of example, through premium finance agreements, leasee of real or personal property or otherwise, lending agreements, purchase money agreements or similar arrangements.

 

 

 

c.    “Designated Person” shall mean any Person conducting, as one of its primary businesses, any business similar to any business conducted by the Company or any of its Subsidiaries (other than the Company or any Affiliate).

 

 

 

d.    “Person” shall mean an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a governmental entity or any department or agency thereof.

 

 

 

e.    “Subsidiary”, when used in reference to any other Person, shall mean any corporation of which outstanding securities having ordinary voting power to elect a majority of the Board of Directors of such corporation are owned directly or indirectly by such other Person.

          3.     Amendments to Charter. The Corporation shall not amend its Charter or Bylaws without the approval, by vote or written consent, of the holders of at least sixty-six and two-thirds percent (66-2/3 %) of the then outstanding shares of Series A Preferred Stock, voting separately as a class (each such share to be entitled to one vote in each instance), if such amendment would change any of the rights, preferences, privileges of or limitations provided for herein for the benefit of the Series A Preferred Stock or materially adversely affect the rights of any holder of Series A Preferred Stock. Without limiting the generality of the preceding sentence, the Corporation shall not amend its Charter or Bylaws without the approval by the holders of at least sixty-six and two-thirds percent (66-2/3 %) of the then outstanding Series A Preferred Stock, voting separately as a class, if such amendment would reduce the amount payable to the holders of Series A Preferred Stock upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or adversely affect the dividend rights or redemption rights of the holders of Series A Preferred Stock.

F.       NO DILUTION OR IMPAIRMENT.

          The Corporation shall not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Series A Preferred Stock set forth herein, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of the Series A Preferred Stock against dilution or other impairment. Without limiting the generality of the foregoing, the Corporation shall not transfer all or substantially all of its properties and assets to any other person (corporate or otherwise), or consolidate with or merge into any other person or permit any such person to consolidate with or merge into the Corporation (if the Corporation is not the surviving person), unless such other

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person shall expressly assume in writing and shall be bound by all the terms of the Series A Preferred Stock set forth herein.

G.      NOTICES OF RECORD DATE.

 

 

 

In the event of:

 

 

 

1.    any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, or

 

 

 

2.    any capital reorganization of the Corporation, any reclassification or recapitalization of the capital stock of the Corporation, any merger or consolidation of the Corporation, or any transfer of all or substantially all of the assets of the Corporation to any other Corporation, or any other entity or person, or

 

 

 

3.    any voluntary or involuntary dissolution, liquidation or winding up of the Corporation,

               then, and in each such event, the Corporation shall mail or cause to be mailed to each holder of Series A Preferred Stock, a notice specifying (a) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, (b) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective and (c) the time, if any, that is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their Common Stock (or other securities) for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding up. Such notice shall be mailed at least twenty (20) days prior to the date specified in such notice on which such action is to be taken.

H.       PUT RIGHTS

          1.     Grant of Option Covering Series A Preferred Shares. The Corporation hereby grants to each holder of Series A Preferred Stock an option to sell to the Corporation, and the Corporation is obligated to purchase from each such holder under such option (the “Series A Put Option”), all (or such portion as is designated by any such holder) of the shares of Series A Preferred Stock then held by such holder. The Series A Put Option shall be effective at any time or times after the earliest to occur of any event listed in clause (a), (b), or (c) below (the “Series A Put Option Period”):

 

 

 

 

 

a.    the fifth anniversary of the date of this Agreement

 

 

 

 

 

b.    the liquidation or dissolution of the Corporation; or

 

 

 

 

      c.    a merger, consolidation, share exchange or similar transaction involving the Corporation or a sale in one or more related transactions of all or substantially all of

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the assets, business, or revenue or income generating operations of the Corporation or any substantial change in the type of business conducted by the Corporation.

          2.     Put Price. In the event that any holder of shares of Series A Preferred Stock exercises the Series A Put Option, the price (the “Put Price”) to be paid to such holder pursuant to this Agreement shall be cash in the amount determined by multiplying: (a) the Liquidation Value per share of Series A Preferred Stock plus accrued and unpaid dividends with respect to such Series A Preferred Stock, times (b) the number of shares of Series A Preferred Stock for which the Put Option is being exercised.

          3.     Exercise of Series A Put Option. The Series A Put Option may be exercised during the Series A Put Option Period with respect to all or any portion of the shares of Series A Preferred Stock of a holder, by such holder giving notice to the Corporation and each other holder of shares of Series A Preferred Stock during the Series A Put Option Period of such holder’s election to exercise the Series A Put Option, and the date of the Put Option Closing (as defined below) pertaining thereto, which shall be not less than 30 nor more than 60 days after the date of such notice. The Corporation shall provide each such holder desiring to exercise its Series A Put Option the name and address of each other holder of shares of Series A Preferred Stock. Notwithstanding the foregoing, if a holder of shares of Series A Preferred Stock receives such notice of another such holder’s exercise of such other holder’s Series A Put Option, the holder receiving such notice may elect to exercise its Series A Put Option and designate a Series A Put Option Closing simultaneous and pari passu with that of such other holder of shares of Series A Preferred Stock.

          4.     Certain Remedies. In the event that the Corporation does not pay to any holder of Series A Preferred Stock on the scheduled date of the Put Option Closing all or any portion of the Put Price payable with respect to any shares of Series A Preferred Stock upon exercise of the Series A Put Option, or in the event the Corporation does not effectuate the Mandatory Redemption on the date set forth in Section D2 above with respect to any shares of Series A Preferred Stock that have not been put to the Corporation, then in addition to any other rights or remedies of a holder, the unpaid portion of the Series A Put Price pertaining thereto, or the Redemption Price of the shares that have not been put to the Corporation and have not been mandatorily redeemed by the Corporation, as the case may be, shall bear interest at the rate of 15% per annum or, if lower, the highest rate permitted by applicable law. The Corporation shall, upon the request of any holder of Series A Preferred Stock, execute and deliver to such holder a promissory note in form and substance satisfactory to such holder evidencing such obligation, and the Corporation acknowledges that such promissory note shall be junior only to the Corporation’s then existing senior secured credit facility.

          5.     Put Option Closing. The closing for the purchase and sale of all oar any portion of the shares of Series A Preferred Stock shall take place at the office of the Corporation on the date specified in such notice of exercise (a “Put Option Closing”). At any Put Option Closing, to the extent applicable, each holder of shares of Series A Preferred Stock shall deliver the certificate or certificates evidencing the shares of Series A Preferred Stock which are the subject of such exercise of such holder’s Series A Put Option, duly endorsed in blank. In consideration therefor, the Corporation shall deliver to the holder the Series A Put Price that is payable with respect to the exercise, which shall be immediately due and payable in cash. In the event that a

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holder of shares of Series A Preferred Stock exercises its Series A Put Option for less than all of its shares of Series A Preferred Stock, the Corporation shall reissue a certificate or certificates to such holder to evidence the shares of Series A Preferred Stock with respect to which the holder’s Series A Put Option was not exercised.

I.        CONVERSION

          Except as expressly provided in any instrument to the contrary, including but not limited to any warrant agreement, the shares of Series A Preferred Stock are not convertible or exchangeable for any other property or securities of the Corporation.

          THIRD:          These Articles Supplementary have been approved by the Board of the Corporation in the manner and by the vote required by law.

          FOURTH:      These Articles Supplementary shall be effective at the time the State Department of Assessments and Taxation of Maryland accepts these Articles Supplementary for record.

          FIFTH:          The undersigned Chairman and Chief Executive Officer of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Chairman and Chief Executive Officer acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

          IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed in its name and on its behalf by its Chairman and Chief Executive Officer and witnessed by its Secretary on December 18, 2006.

 

 

 

 

 

 

BUTLER INTERNATIONAL, INC.

 

 

 

By: 

  /s/ Edward M. Kopko

 

 

 


 

 

 

Edward M. Kopko

 

 

 

Chairman and CEO

 

ATTEST:

 

 

 


 

 

Secretary

 

 

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EX-10.1 3 d70210_ex10-1.htm CREDIT AGREEMENT

Exhibit 10.1

FIFTEENTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT

                    FIFTEENTH AMENDMENT AND LIMITED WAIVER, dated as of December 14, 2006, to the Credit Agreement referred to below (this “Amendment”) among BUTLER INTERNATIONAL, INC., a Maryland corporation (“Holdings”), BUTLER SERVICE GROUP, INC., a New Jersey corporation, as Borrower (the “Borrower”); the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for itself, as Lender, and as Agent for Lenders (“Agent”) and the other Lenders signatory hereto from time to time.

WITNESSETH:

                    WHEREAS, Borrower, the other Credit Parties signatory thereto, Agent, and Lenders signatory thereto are parties to that certain Second Amended and Restated Credit Agreement, dated as of September 28, 2001 (including all annexes, exhibits and schedules thereto, and as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); and

                    WHEREAS, Agent and Lenders have agreed to amend the Credit Agreement in the manner, and on the terms and conditions, provided for herein.

                    NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

                    1. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in Annex A of the Credit Agreement.

                    2. Limited Consent. (i) On or about December 15, 2006, Borrower issued 8,500 shares of series A preferred Stock (the “Preferred Stock”) and warrants exercisable to purchase an aggregate of 2,125,000 shares of common Stock for an aggregate cash consideration of $8,500,000 (the “Preferred Stock Offering”). Agent and Requisite Lenders consented to the Preferred Stock Offering in the Fourteenth Amendment and Limited Waiver to Credit Agreement, dated October 31, 2006 (the “Fourteenth Amendment”).

                    (ii) Notwithstanding the restrictions of Section 1.3(c) of the Credit Agreement and Section 2(iii) of the Fourteenth Amendment, Borrower shall apply the proceeds of the Preferred Stock Offering in the following revised manner: (a) Borrower shall apply $6,000,000 of the net proceeds of the Preferred Stock Offering to prepay the Term Loan on or prior to December 18, 2006 (the “Initial Term Loan Repayment”); (b) Borrower shall apply $2,000,000 of the net proceeds of the Preferred Stock Offering to fund its working capital account on or prior to December 18, 2006 (“Working Capital Funds”); and (c) any additional proceeds of the Preferred Stock Offering in excess of $8,000,000 in the aggregate (inclusive of the Initial Term Loan Repayment and the payment of the Working Capital Funds) shall be applied by Borrower to prepay the Term Loan.



                    3. Amendment to Article 3 of the Credit Agreement. Article 3 of the Credit Agreement is hereby amended as of the Amendment Effective Date (as defined below) by adding to the end thereof the following new Sections 3.26 and 3.27:

 

 

 

          “3.26 Foreign Assets Control Regulations. None of the Credit Parties nor, to the best knowledge of each Credit Party, any Affiliate of any Credit Party, is, or will after consummation of the Related Transactions, the Preferred Stock Offering and the application of the proceeds of the Loans, by reason of being a “national” of a “designated foreign country” or a “specially designated national” within the meaning of the Regulations of the Office of Foreign Assets Control, United States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other reason, in violation of, any United States Federal statute or Presidential Executive Order concerning trade or other relations with any foreign country or any citizen or national thereof or the ownership or operation of any property.

 

 

 

          3.27 Anti-Terrorism Law.

 

 

 

               (a) No Credit Party and, to the knowledge of the Credit Parties, none of its Affiliates is in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the “Patriot Act”).

 

 

 

               (b) No Credit Party, and to the knowledge of the Credit Parties, no Affiliate or broker or other agent of any Credit Party acting or benefiting in any capacity in connection with the Loans is any of the following:

 

 

 

                    (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

 

 

 

                    (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

 

 

 

                    (iii) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; or

 

 

 

                    (iv) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order.

 

 

 

               (c) No Credit Party and, to the knowledge of the Credit Parties, no broker or other agent of any Credit Party acting in any capacity in connection with the Loans (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in paragraph (b) above, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading




 

or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.”

 

 

 

          4. Amendments to Article 5 of the Credit Agreement.

 

 

                   (i) Section 5.15 of the Credit Agreement is hereby amended and restated as of the Amendment Effective Date as follows:

 

 

 

          “5.15 Issuance of Holdings’ Common Stock. Holdings agrees to issue to GE Capital, in the name of CFE, (a) twenty-five thousand shares (25,000) of common Stock on September 30, 2005, (b) thirty-five thousand shares (35,000) of common Stock on December 30, 2005, (c) forty thousand shares (40,000) of common Stock on February 28, 2006, (d) ten thousand shares (10,000) of common Stock on March 31, 2006 and on each month-end date ending thereafter until October 31, 2006 and (e) twenty-five thousand shares (25,000) of common Stock on November 30, 2006 and on each month-end date ending thereafter until the occurrence of the Initial Term Loan Repayment and the payment of the Working Capital Funds.”

 

 

                   (ii) Section 5.16 of the Credit Agreement is hereby amended and restated as of the Amendment Effective Date as follows:

 

 

 

          “5.16 Credit Commitment. Borrower shall have obtained and delivered to Agent or to Agent and Lenders, on or prior to April 30, 2007, a copy of a fully executed commitment letter for a $60,000,000 revolving credit facility, in form and substance satisfactory to Agent, which revolving credit facility shall be utilized to repay in full in cash all of the Obligations.”

 

 

                   (iii) Section 5.17 of the Credit Agreement is hereby deleted in its entirety as of the Amendment Effective Date, and in consideration thereof, on or prior to March 31, 2007, Borrower shall make a cash payment in the amount of $1,000,000, which amount shall be applied in full to prepay the Term Loan.

 

 

 

          5. Amendment to Annex A (Definitions) of the Credit Agreement.

 

 

                   (i) Annex A (Definitions) of the Credit Agreement is hereby amended as of the Amendment Effective Date by adding the following definitions in the appropriate alphabetical order:

 

 

 

          “‘Anti-Terrorism Law’ has the meaning ascribed to it in Section 3.27(a).”

 

 

 

          “‘Executive Order’ has the meaning ascribed to it in Section 3.27(a).”

 

 

 

          “‘Patriot Act’ has the meaning ascribed to it in Section 3.27(a).”

 

 

 

          “‘Preferred Stock Offering’ means Borrower’s issuance on or about December 15, 2006 of up to 8,500 shares of its series A preferred Stock and warrants exercisable to




 

 

 

purchase an aggregate of up to 2,125,000 shares of common Stock for an aggregate cash consideration of up to $8,500,000.”

 

 

 

          “‘ Restated Financial Statements’ has the meaning ascribed to it in subsection (q) of Annex E.

 

 

 

          “‘2005 Year End Financial Information’ has the has the meaning ascribed to it in subsection (q) of Annex E.”

 

 

 

          “‘2006 Fiscal Quarter Financial Information’ has the has the meaning ascribed to it in subsection (q) of Annex E.”

 

 

                    (ii) Annex A (Definitions) of the Credit Agreement is hereby further amended as of the Amendment Effective Date by deleting the language “April 30, 2007” in clause (a) of the definition of “Commitment Termination Date” and substituting in lieu thereof the language “June 30, 2007.”

 

 

                    6. Amendment to Subsection (q) of Annex E (Financial Statements and Projections - Reporting) of the Credit Agreement. Subsection (q) of Annex E (Financial Statements and Projections – Reporting) of the Credit Agreement is hereby amended and restated as of the Amendment Effective Date as follows:

 

 

 

               “(q) Restated 2004 Audited Financial Statements; 2005 Audited Financial Statements; 2006 Fiscal Quarter Financial Information; and 10-Q Filings. To Agent, on or prior to March 31, 2007, (i) restated audited Financial Statements for Borrower and its Subsidiaries for Fiscal Year ended December 31, 2004 (the “Restated Financial Statements”), which Restated Financial Statements shall be prepared in accordance with GAAP and certified without qualification by an independent certified public accounting firm of national standing or otherwise acceptable to Agent, (ii) the annual Financial Statements, certifications, statements, reports, letters and all other documentation required to be delivered pursuant to Section 4.1 (a) and clause (d) of Annex E of the Credit Agreement in respect of the Fiscal Year ended December 31, 2005 (the “2005 Year End Financial Information”) for Borrower and its Subsidiaries on a consolidated basis, which 2005 Year End Financial Information shall be prepared in accordance in all respects with subsection (d) hereof, (iii) the quarterly financial information, certifications, management discussion and analysis and all other documentation required to be delivered pursuant to Section 4.1 (a) and clause (b) of Annex E of the Credit Agreement in respect of the Fiscal Quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 (collectively, the “2006 Fiscal Quarter Financial Information”) for Borrower and its Subsidiaries, which 2006 Fiscal Quarter Financial Information shall be prepared in accordance in all respects with subsection (b) hereof and (iv) any and all quarterly reports on Form 10-Q filed by any Credit Party with the Securities and Exchange Commission during the period commencing on January 1, 2003 and ending on December 31, 2006 and all other documentation required to be delivered pursuant to Section 4.1 (a) and clause (g) of Annex E of the Credit Agreement.”




                    7. Representations and Warranties. To induce Agent and Lenders to enter into this Amendment, each of Holdings and Borrower makes the following representations and warranties to Agent and Lenders:

                         (i) The execution, delivery and performance of this Amendment and the performance of the Credit Agreement, as amended by this Amendment (the “Amended Credit Agreement”) by Borrower and the other Credit Parties: (a) is within such Person’s organizational power; (b) has been duly authorized by all necessary or proper corporate and shareholder action; (c) does not contravene any provision of such Person’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 Person is a party or by which such Person 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 Person 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 Person.

                         (ii) This Amendment has been duly executed and delivered by or on behalf of each of Holdings, Borrower and the other Credit Parties.

                         (iii) Each of this Amendment and the Amended Credit Agreement constitutes a legal, valid and binding obligation of Borrower and each of the other Credit Parties party thereto, enforceable against each in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

                         (iv) No Default or Event of Default has occurred and is continuing after giving effect to this Amendment.

                         (v) No action, claim, lawsuit, demand, investigation or proceeding is now pending or, to the knowledge of any Credit Party, threatened against any Credit Party, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any Governmental Authority, or before any arbitrator or panel of arbitrators, (a) which challenges Borrower’s or, to the extent applicable, any other Credit Party’s right, power, or competence to enter into this Amendment or perform any of their respective obligations under this Amendment, the Amended Credit Agreement or any other Loan Document, or the validity or enforceability of this Amendment, the Amended Credit Agreement or any other Loan Document or any action taken under this Amendment, the Amended Credit Agreement or any other Loan Document or (b) which if determined adversely, is reasonably likely to have or result in a Material Adverse Effect. To the knowledge of Holdings or Borrower, there does not exist a state of facts which is reasonably likely to give rise to such proceedings.

                         (vi) 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 Amendment Effective Date and 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.

                    8. No Other Amendments/Waivers. 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 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.

                    9. Outstanding Indebtedness; Waiver of Claims. Each of Borrower and the other Credit Parties hereby acknowledges and agrees that as of December 14, 2006, the aggregate outstanding principal amount of (i) the Revolving Loan is $41,261,572.10, (ii) the Term Loan A is $3,000,000 and (iii) the Term Loan B is $18,000,000, and that such principal amounts are payable pursuant to the Credit Agreement without defense, offset, withholding, counterclaim or deduction of any kind. Borrower and each other Credit Party hereby waives, releases, remises and forever discharges Agent, Lenders and each other Indemnified Person from any and all claims, suits, actions, investigations, proceedings or demands arising out of or in connection with the Credit Agreement (collectively, “Claims”), whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which Borrower or any other Credit Party ever had, now has or might hereafter have against Agent or Lenders which relates, directly or indirectly, to any acts or omissions of Agent, Lenders or any other Indemnified Person on or prior to the date hereof; provided, that neither Borrower nor any other Credit Party waives any Claim solely to the extent such Claim relates to the Agent’s or any Lender’s gross negligence or willful misconduct.

                    10. Expenses. Borrower and the other Credit Parties hereby reconfirm their respective obligations pursuant to Sections 1.9 and 11.3 of the Credit Agreement to pay and reimburse Agent, for itself and Lenders, for all reasonable costs and expenses (including, without limitation, reasonable fees of counsel) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and all other documents and instruments delivered in connection herewith.

                    11. Effectiveness. This Amendment shall be deemed effective as of the date hereof (the “Amendment Effective Date”) only upon satisfaction in full in the judgment of Agent of each of the following conditions:

                         (i) Amendment. Agent shall have received five (5) original copies of this Amendment duly executed and delivered by Agent, the Requisite Lenders, Borrower and the other Credit Parties.

                         (ii) Payment of Fees and Expenses. Borrower shall have paid to Agent (i) a non-refundable cash amendment fee in the aggregate principal amount of $50,000 for the pro



rata account of the Lenders and (ii) all costs, fees and expenses owing in connection with this Amendment and the other Loan Documents and due to Agent (including, without limitation, reasonable legal fees and expenses).

                         (iii) Representations and Warranties. The representations and warranties of or on behalf of the Borrowers and the Credit Parties in this Amendment shall be true and correct on and as of the Amendment Effective Date and the date hereof, 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.

                    12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                    13. Counterparts. This Amendment may be executed by the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[SIGNATURE PAGES FOLLOW]



          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

 

 

 

BUTLER SERVICE GROUP, INC., as Borrower

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender

 

 

 

By:

 


 

Name:

 


 

Title: Duly Authorized Signatory




          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

 

 

 

BUTLER SERVICE GROUP, INC., as Borrower

 

 

By:

 


 

Name:

 


 

Title:

 


 

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender

 

By: -s- STEVEN SANICOLA

 

Name: STEVEN SANICOLA

 

Title: Duly Authorized Signatory




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

 

 

 

BUTLER NEW JERSEY REALTY CORP.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

BUTLER INTERNATIONAL, INC.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

BUTLER SERVICES INTERNATIONAL, INC.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

BUTLER TELECOM, INC.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

BUTLER SERVICES, INC.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX

 

 

 

BUTLER UTILITY SERVICE, INC.

 

By: -s- PETER MOHAN

 

Name: PETER MOHAN

 

Title: VP - TAX



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EXHIBIT 10.2



REGISTRATION RIGHTS AGREEMENT

by and among

BUTLER INTERNATIONAL, INC.,

and


Dated as of December 15, 2006




Table of Contents

 

 

 

 

 

 

 

 

Page

 

 

 


ARTICLE I

     DEFINITIONS; CONSTRUCTION

 

1

 

 

 

 

 

 

1.1

Defined Terms

 

1

 

1.2

Rules of Construction

 

3

 

 

 

 

 

 

ARTICLE II

     REGISTRATION RIGHTS

 

4

 

 

 

 

 

 

2.1

Required Registration

 

4

 

2.2

Piggyback Registration

 

5

 

2.3

Expenses

 

6

 

2.4

Registration Procedures

 

6

 

2.5

Underwritten Offerings

 

10

 

2.6

Postponements

 

14

 

2.7

Indemnification

 

13

 

2.8

Registration Rights to Others

 

16

 

2.9

Adjustments Affecting Registrable Common Stock

 

16

 

2.10

Rule 144 and Rule 144A

 

16

 

2.11

Nominees for Beneficial Owners

 

16

 

2.12

Calculation of Number of Shares of Registrable Common Stock

 

16

 

2.13

Termination of Registration Rights

 

17

 

 

 

 

 

 

ARTICLE III

     MISCELLANEOUS

 

17

 

 

 

 

 

 

3.1

Injunctive Relief

 

17

 

3.2

Amendments; Entire Agreement

 

17

 

3.3

Severability

 

17

 

3.4

Successors and Assigns

 

17

 

3.5

Notices

 

17

 

3.6

Counterparts

 

18

 

3.7

Governing Law; Consent to Jurisdiction

 

18

 

3.8

Waiver of July Trial

 

18

 




REGISTRATION RIGHTS AGREEMENT

          THIS REGISTRATION RIGHTS AGREEMENT, is made as of December 15, 2006, by and among BUTLER INTERNATIONAL, INC., a Maryland corporation (the “Company”), and _______________________________ or its designees (the “Stockholder”).

Recital

          The Company has agreed to enter into a registration rights agreement with the Stockholder on the terms and conditions set forth herein.

          Accordingly, the parties hereby agree as follows:

ARTICLE I
DEFINITIONS; CONSTRUCTION

          1.1     Defined Terms. As used in this Agreement, the following capitalized terms shall have the meanings ascribed to them below:

          “Affiliate” means any Person who is an “affiliate” of such Person as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

          “Agreement” means this Registration Rights Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

          “Board” means the Board of Directors of the Company.

          “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to be closed.

          “Closing Price” means, with respect to the Registrable Common Stock, as of the date of determination: (a) if the Registrable Common Stock is listed on a national securities exchange, the closing price per share of the Registrable Common Stock on such date published in The Wall Street Journal (National Edition) or, if no such closing price on such date is published in The Wall Street Journal (National Edition), the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which the Registrable Common Stock is then listed or admitted to trading; (b) if the Registrable Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the NASD, the last trading price per share of the Registrable Common Stock on such date; (c) if there shall have been no trading on such date or if the Registrable Common Stock is not designated as a national market system security by the NASD, the average of the reported closing bid and asked prices of the Registrable Common Stock on such date as shown by The NASDAQ Stock Market LLC (or its successor) and reported by any member firm of The New York Stock Exchange, Inc. selected by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined in good faith by the Board. If trading is conducted on a continuous basis on any exchange, then the closing price shall be determined at 4:00 p.m., New York City time.



          “Commission” means the U.S. Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

          “Common Stock” means the shares of common stock, $0.001 par value per share, of the Company, as adjusted to reflect any merger, consolidation, recapitalization, reclassification, split-up, stock dividend, rights offering or reverse stock split made, declared or effected with respect to the Common Stock.

          “Company” has the meaning set forth in the preamble to this Agreement.

          “Company Indemnitee” has the meaning set forth in Section 2.8(a) hereof.

          “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Expenses” means all expenses incurred by the Company incident to the Company’s performance of or compliance with its obligations under this Agreement, including (a) all registration, filing, listing, stock exchange and NASD fees, (b) all fees and expenses of complying with state securities or blue sky laws (including the reasonable fees, disbursements and other charges of counsel for the underwriters in connection with blue sky filings), (c) all of the Company’s word processing, duplicating and printing expenses, messenger, telephone and delivery expenses, (d) all fees, disbursements and other charges of counsel for the Company and of its independent registered public accounting firm, including the expenses incurred in connection with “cold comfort” letters required by or incident to such performance and compliance, (e) all fees and expenses incurred by the Company in connection with the listing of the securities to be registered on each securities exchange or national market system on which similar securities issued by the Company are then listed, (f) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (g) all reasonable fees, disbursements and other charges, if any, of one firm of counsel (per registration statement prepared) to the holders of Registrable Common Stock having stock registered pursuant to Section 2.1(a) hereof (selected by the Stockholder holding the largest number of the shares of Registrable Common Stock covered by such registration), (h) all fees and expenses of any special experts retained by the Company in connection with such registration, and (i) all fees and expenses of other Persons retained by the Company, but excluding underwriting discounts and commissions and applicable transfer taxes, if any, which discounts, commissions and transfer taxes shall be borne by the seller or sellers of Registrable Common Stock in all cases.

          “Governmental Authority” means (a) the government of any nation, state, city, locality or any political subdivision thereof, (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and (c) any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

          “Loss” and “Losses” have the meanings set forth in Section 2.8(a) hereof.

          “Market Price” means, on any date of determination, the average of the daily Closing Price of the Registrable Common Stock during the immediately preceding thirty days on which the national securities exchanges are open for trading.

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          “NASD” means the National Association of Securities Dealers, Inc.

          “Offering Documents” has the meaning set forth in Section 2.8(a) hereof.

          “Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint stock company, trust, unincorporated organization or other entity.

          “Public Offering” means a public offering and sale of Common Stock pursuant to an effective registration statement filed under the Securities Act.

          “Registrable Common Stock” means (i) any shares of Common Stock owned by the Stockholder as of the date hereof, (ii) any shares of Common Stock issued or issuable upon the exercise of any warrants owned or acquired by the Stockholder as of the date hereof, and (iii) any shares of Common Stock acquired by the Stockholder or any of its Affiliates after the date hereof if the Stockholder or Affiliate is an Affiliate of the Company on the date of such acquisition (including any such shares of Common Stock which have been transferred by the Stockholder or its Affiliates in accordance with Section 3.4 hereof); provided that a share of Common Stock will cease to be Registrable Common Stock upon the earliest to occur of the time that (a) such share has been sold under a registration statement effected pursuant hereto or pursuant to Rule 144 promulgated under the Securities Act; (b) such share, along with all of the other shares held by the Stockholder, may immediately be sold under Rule 144 in a given 90 day period and the Stockholder owns less than 1% of the outstanding Common Stock; (c) such share is eligible for sale either under Rule 144(k) or without regard to the volume limitations contained in Rule 144(e); or (d) such share is proposed to be sold or distributed by a Person not entitled to registration rights granted by this Agreement.

          “SEC” means the U.S. Securities and Exchange Commission.

          “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Stockholder Information” has the meaning set forth in Section 2.4(b) hereof.

          “Stockholder Indemnitee” has the meaning set forth in Section 2.8(b) hereof.

          “Subsidiary” means with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which fifty percent (50%) or more of the total voting power of equity interests entitled (without regard to the occurrence of any contingency) to vote generally in the election of directors, managers or trustees thereof, or fifty percent (50%) or more of the equity interest therein, is at the time owned or controlled, directly or indirectly, by any Person or one or more of the other Subsidiaries of such Person or a combination thereof.

          1.2     Rules of Construction. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to.” “Or” is disjunctive but not necessarily exclusive. All references herein to Articles

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and Sections shall be deemed references to Articles and Sections of this Agreement unless the context shall otherwise require. Words such as “herein,” “hereof,” “hereto,” “hereby” and “hereunder” refer to this Agreement, taken as a whole. Except as otherwise expressly provided herein: (a) any reference in this Agreement to any agreement shall mean such agreement as amended, restated, supplemented or otherwise modified from time to time; (b) any reference in this Agreement to any law shall include corresponding provisions of any successor law and any regulations and rules promulgated pursuant to such law or such successor law; and (c) all terms of an accounting or financial nature shall be construed in accordance with United States generally accepted accounting principles, as in effect from time to time. The headings in this Agreement are included for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation of this Agreement.

ARTICLE II
REGISTRATION RIGHTS

          2.1     Required Registration.

                    (a)     Registration for Resale. The Company will use its reasonable best efforts to effect, at the earliest practicable date but in any event subject to Section 2.6, registration for resale under the Securities Act of all of the Stockholder’s Registrable Common Stock so as to permit the disposition of the Registrable Common Stock so to be registered.

                    (b)     Registration of Other Securities. Whenever the Company shall effect a registration pursuant to Section 2.1(a) hereof, no securities other than (i) Registrable Common Stock, (ii) subject to Section 2.1(f), Common Stock that the Company is required to register under registration rights agreements between the Company and third parties, and (iii) subject to Section 2.1(f),Common Stock to be sold by the Company for its own account shall be included among the securities covered by such registration unless the Stockholder shall have consented in writing to the inclusion of such other securities.

                    (c)     Registration Statement Form. Registrations under Section 2.1(a) hereof shall be on Form S-1 or, if permitted by law, Form SB-2, Form S-3 (or, in either case, any successor forms thereto) and as shall permit the disposition of the Registrable Common Stock pursuant to an underwritten offering unless the Stockholder determines otherwise, in which case pursuant to the method of disposition determined by the Stockholder, provided that if the Stockholder requests an underwritten Public Offering, the Company shall not be required to effect such registration unless such underwriting shall be conducted on a “firm commitment” basis. The Company agrees to include in any such registration statement filed pursuant to Section 2.1(a) all information which the Stockholder, upon advice of counsel, shall reasonably request.

                    (d)     Effective Registration Statement. A registration pursuant to Section 2.1(a) shall not be deemed to have been effected:

                              (i)     unless a registration statement with respect thereto has been declared effective by the Commission and remains effective in compliance with the provisions of the Securities Act and the laws of any state or other jurisdiction applicable to the disposition of

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the shares of Registrable Common Stock covered by such registration statement until such time as all of such shares of Registrable Common Stock shall have been disposed of in accordance with such registration statement or there shall cease to be any shares of Registrable Common Stock;

                              (ii)    if, after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other Governmental Authority or court for any reason other than a violation of applicable law solely by the Stockholder, and such registration has not thereafter again become effective;

                              (iii)   if the public trading of the Common Stock is suspended by any stop order, injunction or other order or requirement of the Commission or other Government Authority or court for any reason other than a violation of applicable law by the Stockholder, and such public trading does not thereafter resume; or

                              (iv)   if, in the case of an underwritten offering, the conditions to closing specified in an underwriting agreement to which the Company is a party are not satisfied or waived other than by reason of any breach or failure by the Stockholder.

                    (e)     Selection of Underwriters. The underwriter or underwriters of each underwritten offering, if any, of shares of Registrable Common Stock to be registered pursuant to Section 2.1(a) or Section 2.2 hereof shall be an investment bank mutually selected by the Company and the Stockholder.

                    (f)     Priority in Registration. If a registration under this Section 2.1 involves an underwritten Public Offering and the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that, in such underwriter’s opinion, the number of shares of Registrable Common Stock requested to be included in such registration exceeds the number of such securities that can be sold in such offering within a price range that is acceptable to the Stockholder, as stated by the Stockholder to such managing underwriter, then the Company shall include in such registration, to the extent of the number and type of securities which the Company is advised can be sold in such offering, the following: (i) first, all shares of Registrable Common Stock requested to be registered and sold for the account of the Stockholder; (ii) second, all shares of Common Stock requested to be registered and sold for the account of third parties under other registration rights agreements to which the Company is a party, and (iii) third, any securities to be registered and sold for the account of the Company.

          2.2     Piggyback Registration. If the Company proposes to register any of its securities under the Securities Act by registration on any forms other than Form S-4 or Form S-8 (or any successor or similar form(s)), whether or not pursuant to registration rights granted to other holders of its securities and whether or not for sale for its own account, it shall give prompt written notice to the Stockholder of its intention to do so and of the Stockholder’ rights under this Section 2.2, which notice, in any event, shall be given at least 30 days prior to such proposed registration. Upon the written request of the Stockholder made within 20 days after the Stockholder’s receipt of any such notice from the Company (within 10 days if the Company states in such written notice or gives telephonic notice to the Stockholder, followed promptly by

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written confirmation, stating that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date), which request shall specify the Registrable Common Stock intended to be disposed of by the Stockholder, the Company shall, subject to Section 2.5(b) hereof, effect the registration under the Securities Act of all Registrable Common Stock which the Company has been so requested to register by the Stockholder; provided that,

                    (a)     prior to the effective date of the registration statement filed in connection with such registration and promptly following receipt of notification by the Company from the managing underwriter (if an underwritten offering) of the price at which such securities are to be sold, the Company shall advise the Stockholder of such price, and the Stockholder shall then have the right, exercisable in its sole discretion by delivery of written notice to the Company within five Business Days of such the Stockholder being advised of such price, irrevocably to withdraw its request to have its Registrable Common Stock included in such registration statement, without prejudice to the rights of any holder or holders of Registrable Common Stock to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 2.2 or to cause such registration to be effected as a registration under Section 2.1(a);

                    (b)     if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to the Stockholder and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Common Stock in connection with such registration (but not from any obligation of the Company to pay the Expenses in connection therewith), without prejudice, however, to the rights of the Stockholder to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 2.2 or to cause such registration to be effected as a registration under Section 2.1(a) hereof, as the case may be, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Common Stock, for the same period as the delay in registering such other securities; and

                    (c)     if such registration was initiated by the Company for its own account and involves an underwritten offering, the Stockholder shall sell its Registrable Common Stock on the same terms and conditions as those that apply to the Company, and the underwriters of each such underwritten Public Offering shall be a nationally-recognized underwriter (or underwriters) selected by the Company.

No registration effected under this Section 2.2 shall relieve the Company of its obligation to effect any required registration under Section 2.1(a) hereof, and no registration effected pursuant to this Section 2.2 shall be deemed to have been effected pursuant to Section 2.1(a) hereof.

          2.3     Expenses. The Company shall pay all Expenses in connection with any registration initiated pursuant to Section 2.1(a) or 2.2 hereof, whether or not such registration shall become effective and whether or not all or any portion of the Registrable Common Stock originally requested to be included in such registration is ultimately included in such registration.

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          2.4     Registration Procedures.

                    (a)     Obligations of the Company. Whenever the Company is required to effect any registration under the Securities Act as provided in Sections 2.1(a), 2.1(g) and 2.2 hereof, the Company shall, as expeditiously as possible:

                              (i)       prepare and file with the Commission (which filing shall, in the case of any registration pursuant to Section 2.1(a), be made on or before the date that is 90 days after the date of this Agreement) the requisite registration statement to effect such registration and thereafter use its reasonable best efforts to cause such registration statement to become and remain effective; provided, that the Company may discontinue any registration of its securities other than shares of Registrable Common Stock (and, under the circumstances specified in Sections 2.2 and 2.7(b) hereof, its securities that are shares of Registrable Common Stock) at any time prior to the effective date of the registration statement relating thereto;

                              (ii)      prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Common Stock covered by such registration statement (including filing amendments to such registration statement and prospectus to list in such registration statement and prospectus, as “selling stockholder”, any permitted transferee of the Stockholder) until the earlier of (A) two years after such registration statement becomes effective or (B) such time as all of such Registrable Common Stock has been disposed of in accordance with the method of disposition set forth in such registration statement;

                              (iii)     furnish to each seller of Registrable Common Stock covered by such registration statement and each underwriter, if any, the number of copies reasonably requested by such seller or underwriter of (A) such drafts and final conformed versions of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits and any documents incorporated by reference), (B) such drafts and final versions of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and (C) such other documents as the Stockholder or underwriter may reasonably request in writing;

                              (iv)     use its reasonable best efforts (A) to register or qualify all Registrable Common Stock and other securities, if any, covered by such registration statement under such securities laws (or “blue sky” laws) of such states or other jurisdictions within the United States of America as the sellers of Registrable Common Stock covered by such registration statement shall reasonably request in writing, (B) to keep such registrations or qualifications in effect for so long as such registration statement remains in effect and (C) to take any other action that may be necessary or reasonably advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by such sellers, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the

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requirements of this subsection be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

                              (v)      use its reasonable best efforts to cause all Registrable Common Stock and other securities, if any, covered by such registration statement to be registered with or approved by such other Governmental Authority as may be necessary in the opinion of counsel to the Company and counsel to the seller or sellers of Registrable Common Stock to enable the seller or sellers thereof to consummate the disposition of such Registrable Common Stock;

                              (vi)     use its reasonable best efforts to obtain and, if obtained, furnish to each seller of Registrable Common Stock, and each such seller’s underwriters, if any, (A) a signed opinion of counsel for the Company, dated the effective date of such registration statement (and, if such registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters), reasonably satisfactory (based on the customary form and substance of opinions of issuers’ counsel customarily given in such offerings) in form and substance to such seller, and (B) a “cold comfort” letter, dated the effective date of such registration statement (and, if such registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters) and signed by the independent registered public accounting firm that has certified the Company’s financial statements included or incorporated by reference in such registration statement, reasonably satisfactory (based on the customary form and substance of “cold comfort” letters of issuers’ independent registered public accounting firms customarily given in such offerings) in form and substance to such seller, in each case, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the independent registered public accounting firm’s comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuers’ counsel and in independent registered public accounting firms’ comfort letters delivered to underwriters in underwritten Public Offerings of securities;

                              (vii)    (A) notify each seller of Registrable Common Stock and of any other securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and (B) at the written request of any such seller of Registrable Common Stock or other securities, promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus so that, as thereafter delivered to the purchasers of such securities, such prospectus, as supplemented or amended, shall not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

                            (viii)    use its reasonable best efforts to obtain the withdrawal at the earliest possible moment of any order suspending the effectiveness of a registration statement relating to the Registrable Common Stock;

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                              (ix)     make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months, but not more than eighteen months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and furnish to each seller of Registrable Common Stock and to the managing underwriter, if any, at least ten days prior to the filing thereof a copy of any amendment or supplement to any registration statement or prospectus containing such earnings statement;

                              (x)      otherwise comply with all applicable rules and regulations of the Commission and any other Governmental Authority having jurisdiction over the offering;

                              (xi)     if the Common Stock is then listed on a national securities exchange, use its reasonable best efforts to cause all Registrable Common Stock covered by a registration statement to be listed on such exchange;

                              (xii)    provide a transfer agent and registrar for the Registrable Common Stock covered by a registration statement no later than the effective date thereof;

                              (xiii)   enter into such agreements (including an underwriting agreement in customary form) and take such other actions as the Stockholder shall reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock, including customary indemnification;

                              (xiv)    if requested by the managing underwriter(s) or the Stockholder, promptly (A) incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter(s) and the Stockholder agree should be included therein relating to the plan of distribution with respect to such Registrable Common Stock (including information with respect to the number of shares of Registrable Common Stock being sold to such underwriters and the purchase price being paid therefor by such underwriters) and relating to any other terms of the underwritten offering of the Registrable Common Stock to be sold in such offering; and (B) make all required filings of such prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

                              (xv)    cooperate with the Stockholder and the managing underwriter(s), if any, (A) to facilitate the timely preparation and delivery of certificates representing Registrable Common Stock to be sold which do not bear any restrictive legends and (b) to enable such Registrable Common Stock to be in such share amounts and registered in such names as the managing underwriter(s) or, if none, the Stockholder may request at least three Business Days prior to any sale of Registrable Common Stock.

                    (b)     Delivery of Stockholder Information. As a condition to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Common Stock, the Stockholder must furnish to the Company in writing such information (the “Stockholder Information”) regarding itself and any of its Affiliates or transferees who may be participating in such offering, the Registrable Common Stock held by

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them and the intended methods of disposition of the Registrable Common Stock held by them as are necessary to effect the registration of the Registrable Common Stock and as may be requested in writing by the Company. At least 30 days prior to the first anticipated filing date of a registration statement for any registration under this Agreement, the Company shall notify in writing the Stockholder of the Stockholder Information which the Company is requesting from the Stockholder, whether or not the Stockholder has elected to have any of the Registrable Common Stock included in the registration statement. If within ten days prior to the anticipated filing date the Company has not received the requested Stockholder Information from the Stockholder, then the Company may file the registration statement without including Registrable Common Stock.

                    (c)     Prospectus Distribution. The Stockholder agrees that, as of the date that a final prospectus is made available to it for distribution to prospective purchasers of Registrable Common Stock, the Stockholder shall cease to distribute copies of any preliminary prospectus prepared in connection with the offer and sale of such Registrable Common Stock. The Stockholder further agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.4(a)(vii), the Stockholder shall forthwith discontinue the Stockholder’s disposition of Registrable Common Stock pursuant to the registration statement relating to such Registrable Common Stock until the Stockholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.4(a)(vii) and, if so directed by the Company, shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in the Stockholder’s possession of the prospectus relating to such Registrable Common Stock current at the time of receipt of such notice. If any event of the kind described in Section 2.4(a)(vii) occurs and such event is the fault solely of the Stockholder due to the inaccuracy of the Stockholder Information provided by the Stockholder for inclusion in the registration statement, the Stockholder shall pay all Expenses attributable to the preparation, filing and delivery of any supplemented or amended prospectus contemplated by Section 2.4(a)(vii).

          2.5     Underwritten Offerings.

                    (a)     Requested Underwritten Offerings. If requested by the underwriters in connection with a registration under Section 2.1(a) that is a firm commitment underwritten offering, the Company and the Stockholder shall enter into a firm commitment underwriting agreement with such underwriters for such offering, such agreement (i) to be reasonably satisfactory in substance and form to the Company and the Stockholder and (ii) to contain such representations and warranties by the Company and the Stockholder and such other terms as are customary in agreements of that type, including indemnification and contribution to the effect and to the extent provided in Section 2.8.

                    (b)     Piggyback Underwritten Offerings; Priority.

                              (i)     If the Company proposes to register any of its securities under the Securities Act for its own account as contemplated by Section 2.2 and such securities are to be distributed by or through one or more underwriters, and if the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that if all shares of Registrable Common Stock requested to be included in such registration were so

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included, in such underwriter’s opinion, the number and type of securities proposed to be included in such registration would exceed the number and type of securities which could be sold in such offering within a price range acceptable to the Company (such writing to state the basis for the underwriter’s opinion and the approximate number and type of securities which may be included in such offering without such effect), then the Company shall include in such registration pursuant to Section 2.2, to the extent of the number and type of securities which the Company is so advised can be sold in such offering, (A) first, securities that the Company proposes to issue and sell for its own account, (B) second, shares of Registrable Common Stock requested to be registered by the Stockholder pursuant to Section 2.2 hereof and (C) third, other securities, if any.

                              (ii)    In the case of any other registration contemplated by Section 2.2 involving an underwritten Public Offering, if the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that if all shares of Registrable Common Stock requested to be included in such registration were so included, in such underwriter’s opinion, the number and type of securities proposed to be included in such registration would exceed the number of such securities that can be sold in such offering within a price range that is acceptable to the Stockholder, as stated by the Stockholder to such managing underwriter (such writing to state the basis of the underwriter’s opinion and the approximate number and type of securities which may be included in such offering without such effect), then the Company shall include in such registration pursuant to Section 2.2, to the extent of the number and type of securities which the Company is so advised can be sold in such offering, (A) first, the shares of Registrable Common Stock requested to be registered by the Stockholder pursuant to Section 2.2 hereof, (B) second, securities that the Company proposed to issue and sell for its own account and (C) third, other securities.

                              (iii)   The Stockholder may withdraw its request to have all or any portion of its Registrable Common Stock included in any such offering by notice to the Company within 10 days after receipt of a copy of a notice from the managing underwriter pursuant to this Section 2.5(b)

                    (c)     Stockholder to be Party to Underwriting Agreement. The Stockholder, if shares of Registrable Common Stock are to be distributed by underwriters in an underwritten offering contemplated by Section 2.5(b), shall be a party to the underwriting agreement between the Company and such underwriters, and the Stockholder, at its option, may reasonably require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of the Stockholder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Stockholder. Neither the Stockholder nor any of its Affiliates or transferees shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than customary representations, warranties or agreements of selling stockholders.

                    (d)     Holdback Agreements.

                              (i)     The Stockholder agrees, unless otherwise agreed to by the managing underwriter for any underwritten offering pursuant to this Agreement, not to effect any

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sale or distribution of any equity securities of the Company or securities convertible into or exchangeable or exercisable for equity securities of the Company, including any sale under Rule 144 under the Securities Act, during the 10 days prior to the date on which an underwritten registration of Registrable Common Stock pursuant to Section 2.1 or 2.2 has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration or to the extent that the Stockholder is prohibited by applicable law from agreeing to withhold securities from sale or is acting in its capacity as a fiduciary or an investment adviser. Without limiting the scope of the term “fiduciary,” a holder shall be deemed to be acting as a fiduciary or an investment adviser if its actions or the securities proposed to be sold are subject to the Employee Retirement Income Security Act of 1974, as amended, the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended, or if such securities are held in a separate account under applicable insurance law or regulation.

                              (ii)     The Company agrees (A) not to effect any Public Offering or distribution of any equity securities of the Company, or securities convertible into or exchangeable or exercisable for equity securities of the Company, during the 10 days prior to the date on which any underwritten registration pursuant to Section 2.1(a) or 2.2 has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration, and (B) to cause each holder of any equity securities, or securities convertible into or exchangeable or exercisable for equity securities, in each case, acquired from the Company at any time on or after the date of this Agreement (other than in a Public Offering), to agree not to effect any Public Offering or distribution of such securities, during such period.

          2.6     Postponements.

                    (a)     Failure to File. The Company shall use its best efforts to have each Registration Statement declared effective as soon as practicable after it is filed with the SEC. If (A) the Company fails to file with the SEC a Registration Statement on or before the date by which the Company is required to file the Registration Statement pursuant to Section 2.4(a)(i) above, (B) the Registration Statement covering Registrable Securities is not declared effective by the SEC within one hundred fifty (150) days following the date hereof, (C) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement) but except as excused pursuant to subparagraph (b) below, then the Company will make payments to the Stockholder as liquidated damages for the full amount of damages to the Stockholder by reason thereof, and not as a penalty, at the rate of 1% per month of the Liquidation Value of the Series A Preferred Stock (as defined in the Articles Supplementary Establishing and Fixing the Rights and Preferences of A Series of Shares of Preferred Stock) held at such time by the Stockholder, for the period following the date during which any of the events described in clause (A), (B), or (C) above occurs and is continuing (the “Blackout Period”). Each such payment shall be due and payable within five (5) days after the end of each calendar month of the Blackout Period until the termination of the Blackout Period and within five (5) days after such termination. Such payments shall constitute the Stockholder’s exclusive remedy for such events. The Blackout Period shall terminate upon (x) the filing of the applicable Registration Statement in the case of

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clause (A) above, and (y) the effectiveness of the applicable Registration Statement in the cause of clauses (B) and (C) above. The amounts payable as liquidated damages pursuant to this paragraph shall be payable, at the option of the Stockholder, in lawful money of the United States or in shares of Series A Preferred Stock calculated as set forth in the Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock.

                    (b)     Adverse Effect. The Company shall not be obligated to file any registration statement, or file any amendment or supplement to any registration statement, and may suspend the Stockholder’s rights to make sales pursuant to any effective registration statement, at any time (but not to exceed one time in any 12-month period) when the Company, in the good faith judgment of the Board, reasonably believes that the filing thereof at the time requested, or the offering of securities pursuant thereto, would have a material adverse affect on the Company’s present or proposed operations, or would materially adversely affect a pending or proposed Public Offering of the Company’s securities, a material financing, or a material acquisition, merger, recapitalization, consolidation, reorganization or similar transaction, or negotiations, discussions or pending proposals with respect thereto. The filing of a registration statement, or any amendment or supplement thereto, by the Company cannot be deferred, and the Stockholder’s rights to make sales pursuant to an effective registration statement cannot be suspended, pursuant to the provisions of the preceding sentence for more than 10 days after the abandonment or consummation of any of the foregoing proposals or transactions or for more than 120 days after the date of the Board’s determination referenced in the preceding sentence. If the Company suspends the Stockholder’s rights to make sales pursuant hereto, the applicable registration period shall be extended by the number of days of such suspension.

          2.7     Indemnification.

                    (a)     By the Company. In connection with any registration statement filed by the Company pursuant to Section 2.1 or 2.2 hereof, to the fullest extent permitted by law, the Company shall and hereby agrees to indemnify and hold harmless (i) the Stockholder and any other sellers of Registrable Common Stock covered by such registration statement, (ii) each other Person who participates as an underwriter in the offering or sale of such securities, (iii) each other Person, if any, who controls (within the meaning of the Exchange Act) the Stockholder or any seller or any such underwriter, and (iv) their respective shareholders, members, directors, officers, managers, employees, partners, agents and Affiliates (each, a “Company Indemnitee”), against any losses, claims, damages, liabilities (including actions or proceedings, whether commenced or threatened, in respect thereof, whether or not such indemnified party is a party thereto), joint or several, and expenses, including the reasonable fees, disbursements and other charges of legal counsel and reasonable costs of investigation, in each case to which such Company Indemnitee may become subject under the Securities Act or otherwise (collectively, a “Loss” or “Losses”), insofar as such Losses arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered or otherwise offered or sold under the Securities Act or otherwise, any preliminary prospectus, final prospectus or summary prospectus related thereto, or any amendment or supplement thereto (or any document incorporated by reference therein) (collectively, “Offering Documents”), or (B) any omission or alleged omission to state in such Offering Documents a material fact required to be stated therein or necessary to make the

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statements therein in the light of the circumstances in which they were made not misleading, or (C) any violation by the Company of any federal or state law, rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration; provided that, the Company shall not be liable in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Offering Documents in reliance upon and in conformity with information furnished to the Company in a writing duly executed by such Company Indemnitee specifically stating that it is expressly for use therein; and provided, further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of shares of Registrable Common Stock or who controls (within the meaning of the Exchange Act) such underwriter, in any such case to the extent that any such Loss arises out of such Person’s failure to send or give a copy of the final prospectus (including any documents incorporated by reference therein), as the same may be then supplemented or amended, to the Person asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Common Stock to such Person if such statement or omission was corrected in such final prospectus. The foregoing indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Company Indemnitee and shall survive the transfer of such securities by such Company Indemnitee.

                    (b)     By the Stockholder. In connection with any registration statement filed by the Company pursuant to Section 2.1 or 2.2 in which shares of Registrable Common Stock are registered for sale, the Stockholder shall, and hereby agrees to, indemnify and hold harmless to the fullest extent permitted by law the Company and each of its directors, officers, employees, agents, Affiliates and each other Person, if any, who controls (within the meaning of the Exchange Act) the Company (each, a “Stockholder Indemnitee”), against all Losses insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Offering Document or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of circumstances in which they were made not misleading, if such untrue statement or alleged untrue statement or omission or alleged omission was made by the Company in reliance upon and in conformity with information furnished to the Company in a writing duly executed by the Stockholder specifically stating that it is expressly for use therein; provided, that the liability of such indemnifying party under this Section 2.7(b) shall be limited to the amount of the net proceeds (after giving effect to underwriting discounts and commissions) received by the Stockholder in the sale of Registrable Common Stock giving rise to such liability. The foregoing indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Stockholder Indemnitee and shall survive the transfer of such securities by such indemnifying party.

                    (c)     Notice of Loss, Etc. Promptly after receipt by an indemnified party of written notice of the commencement of any action or proceeding involving a Loss referred to in Section 2.7(a) or (b), such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under Section 2.7(a) or (b) except to the extent that the indemnifying party is materially and actually prejudiced by

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such failure to give notice. In case any such action is brought against an indemnified party, (i) the indemnifying party shall be entitled to participate in and, unless in the indemnified party’s reasonable judgment a conflict of interest between the indemnified and indemnifying parties exists in respect of such Loss, to assume and control the defense thereof, in each case at its own expense, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to the indemnified party, and (ii) after its assumption of the defense thereof, the indemnifying party shall not be liable to the indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, unless in the indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof. No indemnifying party shall be liable for any settlement of any such action or proceeding effected without the indemnifying party’s written consent, which shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability in respect of such Loss or which requires action on the part of the indemnified party or otherwise subjects the indemnified party to any obligation or restriction to which it would not otherwise be subject.

                    (d)     Contribution. If the indemnification provided for in Section 2.7(a) or (b) shall for any reason be unavailable in respect of any Loss, then, in lieu of the amount paid or payable under Section 2.7(a) or (b), the indemnified party and the indemnifying party under Section 2.7(a) or (b), as applicable, shall contribute to the aggregate Losses (including legal or other expenses reasonably incurred in connection with investigating the same) (i) in such proportion as is appropriate to reflect the relative fault of the Company and the prospective sellers of Registrable Common Stock covered by the registration statement which resulted in such Loss with respect to the statements, omissions or action which resulted in such Loss, as well as any other relevant equitable considerations, or (ii) if the allocation provided by the preceding clause (i) is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and such prospective sellers, on the other hand, from their sale of Registrable Common Stock; provided that, for purposes of this clause (ii), the relative benefits received by the prospective sellers shall be deemed not to exceed the amount received by such sellers. No Person guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The obligations, if any, of the selling holders of Registrable Common Stock to contribute as provided in this subsection (c) are not joint but are several in proportion to the relative value of their respective Registrable Common Stock covered by such registration statement. In addition, no Person shall be obligated to contribute amounts under this Section 2.7(d) in payment for any settlement of any Loss effected without such Person’s consent.

                    (e)     Other Indemnification. The Company shall, in connection with any registration statement filed by the Company pursuant to Section 2.1(a) or 2.2, and, if the Stockholder has registered for sale Registrable Common Stock, the Stockholder shall, with respect to any required registration or other qualification of securities under any federal or state law or regulation of any Governmental Authority other than the Securities Act, indemnify Stockholder Indemnitees and Company Indemnitees, respectively, against Losses, or, to the

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extent that indemnification shall be unavailable to a Stockholder Indemnitee or Company Indemnitee, contribute to the aggregate Losses of such Stockholder Indemnitee or Company Indemnitee in a manner similar to that specified in the preceding subsections of this Section 2.7 (with appropriate modifications).

                    (f)     Indemnification Payments. The indemnification and contribution required by this Section 2.7 shall be made by periodic payments of the amount thereof during the course of any investigation or defense, as and when any Loss is incurred and is due and payable.

          2.8     Registration Rights to Others. If the Company shall at any time hereafter provide to any holder of any securities of the Company rights with respect to the registration of such securities under the Securities Act, such rights shall not be in conflict with or adversely affect any of the rights provided to the holders of Registrable Common Stock in this Agreement or conflict (in a manner that adversely affects holders of Registrable Common Stock) with any other provisions included in this Agreement. To the extent the Company provides any right to others that are more favorable than those provided for herein, the Company shall be required to make appropriate modifications to this Agreement to ensure that the Stockholder will have the benefit of terms that are at least as favorable as those provided to such other Persons.

          2.9     Adjustments Affecting Registrable Common Stock. Without the written consent of the Stockholder, the Company shall not effect or permit to occur any combination, subdivision or reclassification of Registrable Common Stock that would materially adversely affect the ability of the Stockholder to include shares of such Registrable Common Stock in any registration of the Company’s securities under the Securities Act or the marketability of such Registrable Common Stock under any such registration or other offering.

          2.10    Rule 144 and Rule 144A. The Company shall take all actions reasonably necessary to enable the Stockholder to sell shares of Registrable Common Stock without registration under the Securities Act within the limitations of the exemptions provided by (a) Rule 144 under the Securities Act, (b) Rule 144A under the Securities Act, or (c) any similar rules or regulations hereafter adopted by the Commission, including the Company’s filing on a timely basis all reports required to be filed under the Exchange Act. Upon the written request of the Stockholder, the Company shall deliver to the Stockholder a written statement as to the Company’s compliance with such requirements. The Stockholder acknowledges that the Company has not filed on a timely basis all reports required to be filed under the Exchange Act, and the Stockholder waives any breach of this Agreement based on such failure.

          2.11    Nominees for Beneficial Owners. In the event that any shares of Registrable Common Stock are held by a nominee for the beneficial owner thereof, such beneficial owner may, at its election delivered to the Company in writing, be treated as the Stockholder owning such shares of Registrable Common Stock for purposes of any request or other action by the Stockholder pursuant to this Agreement or any determination of the number or percentage of shares of Registrable Common Stock held by the Stockholder contemplated by this Agreement. If the beneficial owner of any shares of Registrable Common Stock so elects, the Company may require assurances reasonably satisfactory to the Company of such owner’s beneficial ownership of such shares of Registrable Common Stock.

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          2.12    Calculation of Number of Shares of Registrable Common Stock. For purposes of this Agreement, all references to a percentage or number of shares of Registrable Common Stock or Common Stock shall be calculated based upon the number of shares of Registrable Common Stock or Common Stock, as the case may be, outstanding at the time such calculation is made and shall exclude any Registrable Common Stock or Common Stock, as the case may be, owned by the Company or any Subsidiary of the Company. For the purposes of calculating the number of shares of Registrable Common Stock or Common Stock as contemplated by the previous sentence, the term “Stockholder” shall include all Affiliates and transferees thereof owning any shares of Registrable Common Stock or Common Stock.

          2.13    Termination of Registration Rights. The Company’s obligations under Sections 2.1 and 2.2 hereof to register Common Stock for sale under the Securities Act shall terminate on the first date on which no shares of Registrable Common Stock are held by the Stockholder, its Affiliates or any other Person to whom the Stockholder has assigned its rights hereunder.

ARTICLE III
MISCELLANEOUS

          3.1     Injunctive Relief. The Stockholder and the Company acknowledge and agree that a violation of any of the terms of this Agreement will cause irreparable injury for which adequate remedy at law is not available. Accordingly, it is agreed that the Company and the Stockholder shall each be entitled to an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or equity.

          3.2     Amendments; Entire Agreement. This Agreement may be amended and the Company may take action herein prohibited, or omit to perform any act herein required to be performed by it, if and only if the Company has obtained the prior written consent of the Stockholder. This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among any or all of the parties with respect to the subject matter hereof.

          3.3     Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

          3.4     Successors and Assigns. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, each of which successors shall agree in a writing in form and substance reasonably satisfactory to the Company to become a party hereto and to be bound hereby to the same extent as the parties hereto. This Agreement and the rights, duties and obligations hereunder of the Stockholder may be assigned or transferred by the Stockholder, in whole or in part, without the prior written consent of the Company, to any Person to which the Stockholder transfers any rights in shares of Registrable

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Common Stock. The Stockholder shall promptly notify the Company in writing of any such assignment or transfer.

          3.5     Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile or other electronic transmission), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or two Business Days after being delivered to a recognized courier (whose stated terms of delivery are two Business Days or less to the destination of such notice), or, in the case of an electronic notice, when received, addressed as set forth below to the parties hereto, or to such other address as may be hereafter notified by the respective parties hereto:

 

 

 

 

(a)

If to the Company:

 

 

 

 

 

Butler International Inc.
110 Summit Avenue
Montvale, New Jersey 07645
Attention: Edward M. Kopko
Fax: (954) 761-9675

 

 

 

 

 

With a copy to:

 

 

 

 

 

McBreen & Kopko
20 North Wacker Drive, Suite 2520
Chicago, Illinois 60606
Attention: James Stern, Esq.
Fax: (312) 332-2657

 

 

 

 

(b)

If to the Stockholder:

 

 

 

 

 


 

 

 

 

 

With a copy to:

 

 

 

 

 


          3.6     Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

          3.7     Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts made and to be fully performed therein. The parties hereto irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the County of Bergen, in the State of New Jersey, over any action or proceeding arising out of or relating to this Agreement or the transaction contemplated hereby to the fullest extent they may effectively do so under applicable law. The parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense

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or otherwise, (a) any claim that they are not subject to the jurisdiction of any such court, (b) any objection that they may now or hereafter have to the laying of the venue of any such action or proceeding brought in any such court and (c) any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

          3.8     Waiver of July Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

[Remainder of this page intentionally blank]

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Execution

          IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first above written.

 

 

 

 

BUTLER INTERNATIONAL, INC.,

 

 

 

 

By:

 

 

 


 

 

 

 


 

 

 

 

By:

 

 

 


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EX-10.3 8 d70210_ex10-3.htm FORM OF REGISTRATION RIGHTS AGREEMENT

EXHIBIT 10.3



REGISTRATION RIGHTS AGREEMENT

by and among

BUTLER INTERNATIONAL, INC.,

and


Dated as of December 15, 2006




Table of Contents

 

 

 

 

 

Page

 

 

 

 

 


ARTICLE I

 

DEFINITIONS; CONSTRUCTION

 

1

 

 

 

 

 

 

 

 

1.1

 

 

Defined Terms

 

1

 

1.2

 

 

Rules of Construction

 

3

 

 

 

 

 

 

 

 

ARTICLE II

 

REGISTRATION RIGHTS

 

4

 

 

 

 

 

 

 

 

2.1

 

 

Demand Registration

 

4

 

2.2

 

 

Piggyback Registration

 

7

 

2.3

 

 

Expenses

 

8

 

2.4

 

 

Registration Procedures

 

8

 

2.5

 

 

Underwritten Offerings

 

11

 

2.6

 

 

Postponements

 

13

 

2.7

 

 

Indemnification

 

14

 

2.8

 

 

Registration Rights to Others

 

17

 

2.9

 

 

Adjustments Affecting Registrable Common Stock

 

17

 

2.10

 

 

Rule 144 and Rule 144A

 

17

 

2.11

 

 

Nominees for Beneficial Owners

 

17

 

2.12

 

 

Calculation of Number of Shares of Registrable Common Stock

 

17

 

2.13

 

 

Termination of Registration Rights

 

18

 

 

 

 

 

 

 

 

ARTICLE III

 

MISCELLANEOUS

 

18

 

 

 

 

 

 

 

 

3.1

 

 

Injunctive Relief

 

18

 

3.2

 

 

Amendments; Entire Agreement

 

18

 

3.3

 

 

Severability

 

18

 

3.4

 

 

Successors and Assigns

 

18

 

3.5

 

 

Notices

 

18

 

3.6

 

 

Counterparts

 

19

 

3.7

 

 

Governing Law; Consent to Jurisdiction

 

19

 

3.8

 

 

Waiver of July Trial

 

20

 




REGISTRATION RIGHTS AGREEMENT

          THIS REGISTRATION RIGHTS AGREEMENT, is made as of December 15, 2006, by and among BUTLER INTERNATIONAL, INC., a Maryland corporation (the “Company”), and ________________ or its designees (the “Stockholder”).

Recital

          The Company has agreed to enter into a registration rights agreement with the Stockholder on the terms and conditions set forth herein.

          Accordingly, the parties hereby agree as follows:

ARTICLE I
DEFINITIONS; CONSTRUCTION

          1.1    Defined Terms. As used in this Agreement, the following capitalized terms shall have the meanings ascribed to them below:

          “Affiliate” means any Person who is an “affiliate” of such Person as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

          “Agreement” means this Registration Rights Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

          “Board” means the Board of Directors of the Company.

          “Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to be closed.

          “Closing Price” means, with respect to the Registrable Common Stock, as of the date of determination: (a) if the Registrable Common Stock is listed on a national securities exchange, the closing price per share of the Registrable Common Stock on such date published in The Wall Street Journal (National Edition) or, if no such closing price on such date is published in The Wall Street Journal (National Edition), the average of the closing bid and asked prices on such date, as officially reported on the principal national securities exchange on which the Registrable Common Stock is then listed or admitted to trading; (b) if the Registrable Common Stock is not then listed or admitted to trading on any national securities exchange but is designated as a national market system security by the NASD, the last trading price per share of the Registrable Common Stock on such date; (c) if there shall have been no trading on such date or if the Registrable Common Stock is not designated as a national market system security by the NASD, the average of the reported closing bid and asked prices of the Registrable Common Stock on such date as shown by The NASDAQ Stock Market LLC (or its successor) and reported by any member firm of The New York Stock Exchange, Inc. selected by the Company; or (d) if none of (a), (b) or (c) is applicable, a market price per share determined in good faith by the Board. If trading is conducted on a continuous basis on any exchange, then the closing price shall be determined at 4:00 p.m., New York City time.



          “Commission” means the U.S. Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

          “Common Stock” means the shares of common stock, $0.001 par value per share, of the Company, as adjusted to reflect any merger, consolidation, recapitalization, reclassification, split-up, stock dividend, rights offering or reverse stock split made, declared or effected with respect to the Common Stock.

          “Company” has the meaning set forth in the preamble to this Agreement.

          “Company Indemnitee” has the meaning set forth in Section 2.8(a) hereof.

          “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Expenses” means all expenses incurred by the Company incident to the Company’s performance of or compliance with its obligations under this Agreement, including (a) all registration, filing, listing, stock exchange and NASD fees, (b) all fees and expenses of complying with state securities or blue sky laws (including the reasonable fees, disbursements and other charges of counsel for the underwriters in connection with blue sky filings), (c) all of the Company’s word processing, duplicating and printing expenses, messenger, telephone and delivery expenses, (d) all fees, disbursements and other charges of counsel for the Company and of its independent registered public accounting firm, including the expenses incurred in connection with “cold comfort” letters required by or incident to such performance and compliance, (e) all fees and expenses incurred by the Company in connection with the listing of the securities to be registered on each securities exchange or national market system on which similar securities issued by the Company are then listed, (f) any fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (g) all reasonable fees, disbursements and other charges, if any, of one firm of counsel (per registration statement prepared) to the holders of Registrable Common Stock making a request pursuant to Section 2.1(a) or 2.1(g) hereof (selected by the Stockholder holding the largest number of the shares of Registrable Common Stock covered by such registration), (h) all fees and expenses of any special experts retained by the Company in connection with such registration, and (i) all fees and expenses of other Persons retained by the Company, but excluding underwriting discounts and commissions and applicable transfer taxes, if any, which discounts, commissions and transfer taxes shall be borne by the seller or sellers of Registrable Common Stock in all cases.

          “Governmental Authority” means (a) the government of any nation, state, city, locality or any political subdivision thereof, (b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and (c) any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

          “Loss” and “Losses” have the meanings set forth in Section 2.8(a) hereof.

          “Market Price” means, on any date of determination, the average of the daily Closing Price of the Registrable Common Stock during the immediately preceding thirty days on which the national securities exchanges are open for trading.

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          “NASD” means the National Association of Securities Dealers, Inc.

          “Offering Documents” has the meaning set forth in Section 2.8(a) hereof.

          “Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint stock company, trust, unincorporated organization or other entity.

          “Public Offering” means a public offering and sale of Common Stock pursuant to an effective registration statement filed under the Securities Act.

          “Registrable Common Stock” means any shares of Common Stock owned by the Stockholder as of the date hereof and any shares of Common Stock acquired by the Stockholder or any of its Affiliates after the date hereof if the Stockholder or Affiliate is an Affiliate of the Company on the date of such acquisition (including any such shares of Common Stock which have been transferred by the Stockholder or its Affiliates in accordance with Section 3.4 hereof); provided that a share of Common Stock will cease to be Registrable Common Stock upon the earliest to occur of the time that (a) such share has been sold under a registration statement effected pursuant hereto or pursuant to Rule 144 promulgated under the Securities Act; (b) such share, along with all of the other shares held by the Stockholder, may immediately be sold under Rule 144 in a given 90 day period and the Stockholder owns less than 1% of the outstanding Common Stock; (c) such share is eligible for sale either under Rule 144(k) or without regard to the volume limitations contained in Rule 144(e); or (d) such share is proposed to be sold or distributed by a Person not entitled to registration rights granted by this Agreement.

          “SEC” means the U.S. Securities and Exchange Commission.

          “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar or successor statute.

          “Stockholder Information” has the meaning set forth in Section 2.4(b) hereof.

          “Stockholder Indemnitee” has the meaning set forth in Section 2.8(b) hereof.

          “Subsidiary” means with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which fifty percent (50%) or more of the total voting power of equity interests entitled (without regard to the occurrence of any contingency) to vote generally in the election of directors, managers or trustees thereof, or fifty percent (50%) or more of the equity interest therein, is at the time owned or controlled, directly or indirectly, by any Person or one or more of the other Subsidiaries of such Person or a combination thereof.

          1.2     Rules of Construction. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to.” “Or” is disjunctive but not necessarily exclusive. All references herein to Articles and Sections shall be deemed references to Articles and Sections of this Agreement unless the context shall otherwise require. Words such as “herein,” “hereof,” “hereto,” “hereby” and

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“hereunder” refer to this Agreement, taken as a whole. Except as otherwise expressly provided herein: (a) any reference in this Agreement to any agreement shall mean such agreement as amended, restated, supplemented or otherwise modified from time to time; (b) any reference in this Agreement to any law shall include corresponding provisions of any successor law and any regulations and rules promulgated pursuant to such law or such successor law; and (c) all terms of an accounting or financial nature shall be construed in accordance with United States generally accepted accounting principles, as in effect from time to time. The headings in this Agreement are included for convenience of reference only and shall not limit or otherwise affect the meaning or interpretation of this Agreement.

ARTICLE II
REGISTRATION RIGHTS

          2.1     Demand Registration.

                    (a)     Request. At any time and from time to time after the date hereof, the Stockholder may make a written request to the Company for the registration with the Commission under the Securities Act of all or part of the Stockholder’s Registrable Common Stock which request shall specify the number of shares of Registrable Common Stock to be disposed of by the Stockholder and the proposed plan of distribution therefor. Upon the receipt of any request for registration made in accordance with the terms of this paragraph, the Company will use its reasonable best efforts to effect, at the earliest practicable date, such registration under the Securities Act of the Registrable Common Stock which the Company has been so requested to register by the Stockholder so as to permit the disposition of the Registrable Common Stock so to be registered; provided that:

                              (i)       the Company shall not be required to effect more than a total of one demand registration pursuant to this Section 2.1(a);

                              (ii)      if the intended method of distribution is an underwritten Public Offering, the Company shall not be required to effect such registration pursuant to this Section 2.1(a) unless such underwriting shall be conducted on a “firm commitment” basis;

                              (iii)     if the Company has previously effected a registration pursuant to this Section 2.1(a) or Section 2.1(g) hereof or has previously effected a registration of which notice has been given to the Stockholder pursuant to Section 2.2 hereof, the Company shall not be required to effect any registration pursuant to this Section 2.1(a) until a period of 180 days shall have elapsed from the date on which the previous such registration ceased to be effective;

                              (iv)     the Stockholder, by written notice to the Company, may withdraw such request and, on the Company’s receipt of notice of such withdrawal, the Company shall not be required to effect such registration; provided that, if the Stockholder agrees to pay the Expenses related to such registration, then the request for registration shall not be counted for purposes of determining the number of registrations to which the Stockholder is entitled pursuant to this Section 2.1(a); and

                              (v)      the Company shall not be required to effect any registration to be effected pursuant to this Section 2.1(a) unless the shares of Registrable Common Stock proposed

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to be sold in such registration have an aggregate price (calculated based upon the Market Price of such shares of Registrable Common Stock as of the date of such request) of at least $8,000,000.

                    (b)    Registration of Other Securities. Whenever the Company shall effect a registration pursuant to Section 2.1(a) hereof, no securities other than (i) Registrable Common Stock, (ii) subject to Section 2.1(f), Common Stock that the Company is required to register under registration rights agreements between the Company and third parties, and (iii) subject to Section 2.1(f),Common Stock to be sold by the Company for its own account shall be included among the securities covered by such registration unless the Stockholder shall have consented in writing to the inclusion of such other securities.

                    (c)    Registration Statement Form. Registrations under Section 2.1(a) hereof shall be on Form S-1 or, if permitted by law, Form S-3 (or, in either case, any successor forms thereto) and as shall permit the disposition of the Registrable Common Stock pursuant to an underwritten offering unless the Stockholder determines otherwise, in which case pursuant to the method of disposition determined by the Stockholder. The Company agrees to include in any such registration statement filed pursuant to Section 2.1(a) all information which the Stockholder, upon advice of counsel, shall reasonably request.

                    (d)    Effective Registration Statement. A registration requested pursuant to Section 2.1(a) or Section 2.1(g) shall not be deemed to have been effected:

                             (i)      unless a registration statement with respect thereto has been declared effective by the Commission and remains effective in compliance with the provisions of the Securities Act and the laws of any state or other jurisdiction applicable to the disposition of the shares of Registrable Common Stock covered by such registration statement until such time as all of such shares of Registrable Common Stock shall have been disposed of in accordance with such registration statement or there shall cease to be any shares of Registrable Common Stock;

                             (ii)     if, after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other Governmental Authority or court for any reason other than a violation of applicable law solely by the Stockholder, and such registration has not thereafter again become effective; or

                              (iii)   if, in the case of an underwritten offering, the conditions to closing specified in an underwriting agreement to which the Company is a party are not satisfied or waived other than by reason of any breach or failure by the Stockholder.

Any holder of Registrable Common Stock to be included in a registration statement may at any time withdraw a request for registration made pursuant to Section 2.1(a) in accordance with Section 2.1(a)(v).

                    (e)    Selection of Underwriters. The underwriter or underwriters of each underwritten offering, if any, of shares of Registrable Common Stock to be registered pursuant to Section 2.1(a) or Section 2.2 hereof shall be an investment bank mutually selected by the Company and the Stockholder.

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                    (f)    Priority in Requested Registration. If a registration under this Section 2.1 involves an underwritten Public Offering and the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that, in such underwriter’s opinion, the number of shares of Registrable Common Stock requested to be included in such registration exceeds the number of such securities that can be sold in such offering within a price range that is acceptable to the Stockholder, as stated by the Stockholder to such managing underwriter, then the Company shall include in such registration, to the extent of the number and type of securities which the Company is advised can be sold in such offering, the following: (i) first, all shares of Registrable Common Stock requested to be registered and sold for the account of the Stockholder; (ii) second, all shares of Common Stock requested to be registered and sold for the account of third parties under other registration rights agreements to which the Company is a party, and (iii) third, any securities to be registered and sold for the account of the Company.

                    (g)    Shelf Registration. At any time the Company is eligible to file a shelf registration under the securities laws, the Stockholder may make a written request that the Company file a shelf registration statement (a “Shelf Registration Statement”) pursuant to Rule 415 promulgated under the Securities Act (a “Shelf Registration”) and any related qualification or compliance with respect to all or part of the Registrable Common Stock owned by the Stockholder, provided that the Stockholder (together with any other holders of Registrable Common Stock to be included in such registration) proposes to sell shares of Registrable Common Stock having an aggregate price (calculated based upon the Market Price of such shares of Registrable Common Stock as of the date of such request) of at least $8,000,000. The Company shall as soon as practicable use its reasonable best efforts to file such Shelf Registration Statement under the Securities Act at the earliest practicable date, but in any event not later than 60 days after the date that such Shelf Registration was requested, and use its reasonable best efforts to have such Shelf Registration Statement thereafter declared effective by the SEC at the earliest practicable date. The Company agrees to use its reasonable best efforts to keep the Shelf Registration Statement continuously effective for the period beginning on the date on which the Shelf Registration Statement is declared effective under the Securities Act until the earliest to occur of (A) 18 months thereafter (plus a number of Business Days equal to the number of Business Days, if any, that the Shelf Registration Statement is not kept effective after the initial date of its effectiveness and prior to 18 months thereafter pursuant to Section 2.7(b) or otherwise), (B) the day after the date on which all shares of Registrable Common Stock covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or another registration statement, or (C) the first date on which there shall cease to be any Registrable Common Stock covered by such Shelf Registration Statement. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration or by the Securities Act or by any other rules and regulations thereunder for Shelf Registration, and the Company agrees to furnish to the Stockholder copies of any such supplement or amendment promptly after its being issued or filed with the SEC. No registration requested by the Stockholder pursuant to this Section 2.1(g) shall be deemed a registration pursuant to Section 2.1(a). Not more than one registration pursuant to this Section 2.1(g) shall be required in any 12-month period.

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          2.2     Piggyback Registration. If the Company proposes to register any of its securities under the Securities Act by registration on any forms other than Form S-4 or Form S-8 (or any successor or similar form(s)), whether or not pursuant to registration rights granted to other holders of its securities and whether or not for sale for its own account, it shall give prompt written notice to the Stockholder of its intention to do so and of the Stockholder’ rights under this Section 2.2, which notice, in any event, shall be given at least 30 days prior to such proposed registration. Upon the written request of the Stockholder made within 20 days after the Stockholder’s receipt of any such notice from the Company (within 10 days if the Company states in such written notice or gives telephonic notice to the Stockholder, followed promptly by written confirmation, stating that (i) such registration will be on Form S-3 and (ii) such shorter period of time is required because of a planned filing date), which request shall specify the Registrable Common Stock intended to be disposed of by the Stockholder, the Company shall, subject to Section 2.5(b) hereof, effect the registration under the Securities Act of all Registrable Common Stock which the Company has been so requested to register by the Stockholder; provided that,

                    (a)     prior to the effective date of the registration statement filed in connection with such registration and promptly following receipt of notification by the Company from the managing underwriter (if an underwritten offering) of the price at which such securities are to be sold, the Company shall advise the Stockholder of such price, and the Stockholder shall then have the right, exercisable in its sole discretion by delivery of written notice to the Company within five Business Days of such the Stockholder being advised of such price, irrevocably to withdraw its request to have its Registrable Common Stock included in such registration statement, without prejudice to the rights of any holder or holders of Registrable Common Stock to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 2.2 or to cause such registration to be effected as a registration under Section 2.1(a) or Section 2.1(g) hereof, as the case may be;

                    (b)     if at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to the Stockholder and (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Common Stock in connection with such registration (but not from any obligation of the Company to pay the Expenses in connection therewith), without prejudice, however, to the rights of the Stockholder to include Registrable Common Stock in any future registration (or registrations) pursuant to this Section 2.2 or to cause such registration to be effected as a registration under Section 2.1(a) or Section 2.1(g) hereof, as the case may be, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Common Stock, for the same period as the delay in registering such other securities; and

                    (c)     if such registration was initiated by the Company for its own account and involves an underwritten offering, the Stockholder shall sell its Registrable Common Stock on the same terms and conditions as those that apply to the Company, and the underwriters of each such underwritten Public Offering shall be a nationally-recognized underwriter (or underwriters) selected by the Company.

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No registration effected under this Section 2.2 shall relieve the Company of its obligation to effect any demand registration under Section 2.1(a) or Section 2.1(g) hereof, and no registration effected pursuant to this Section 2.2 shall be deemed to have been effected pursuant to Section 2.1(a) or Section 2.1(g) hereof.

          2.3     Expenses. The Company shall pay all Expenses in connection with any registration initiated pursuant to Section 2.1(a), 2.1(g) or 2.2 hereof, whether or not such registration shall become effective and whether or not all or any portion of the Registrable Common Stock originally requested to be included in such registration is ultimately included in such registration.

          2.4     Registration Procedures.

                    (a)     Obligations of the Company. Whenever the Company is required to effect any registration under the Securities Act as provided in Sections 2.1(a), 2.1(g) and 2.2 hereof, the Company shall, as expeditiously as possible:

                               (i)     prepare and file with the Commission (which filing shall, in the case of any registration pursuant to Section 2.1(a) or Section 2.1(g), be made on or before the date that is 90 days after the receipt by the Company of the written request from the Stockholder) the requisite registration statement to effect such registration and thereafter use its reasonable best efforts to cause such registration statement to become and remain effective; provided, that the Company may discontinue any registration of its securities other than shares of Registrable Common Stock (and, under the circumstances specified in Sections 2.2 and 2.7(b) hereof, its securities that are shares of Registrable Common Stock) at any time prior to the effective date of the registration statement relating thereto;

                              (ii)    prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Common Stock covered by such registration statement until the earlier of (A) 360 days after such registration statement becomes effective or (B) such time as all of such Registrable Common Stock has been disposed of in accordance with the method of disposition set forth in such registration statement;

                              (iii)   furnish to each seller of Registrable Common Stock covered by such registration statement and each underwriter, if any, the number of copies reasonably requested by such seller or underwriter of (A) such drafts and final conformed versions of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits and any documents incorporated by reference), (B) such drafts and final versions of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and (C) such other documents as the Stockholder or underwriter may reasonably request in writing;

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                              (iv)    use its reasonable best efforts (A) to register or qualify all Registrable Common Stock and other securities, if any, covered by such registration statement under such securities laws (or “blue sky” laws) of such states or other jurisdictions within the United States of America as the sellers of Registrable Common Stock covered by such registration statement shall reasonably request in writing, (B) to keep such registrations or qualifications in effect for so long as such registration statement remains in effect and (C) to take any other action that may be necessary or reasonably advisable to enable such sellers to consummate the disposition in such jurisdictions of the securities to be sold by such sellers, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this subsection be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service of process in any such jurisdiction;

                              (v)     use its reasonable best efforts to cause all Registrable Common Stock and other securities, if any, covered by such registration statement to be registered with or approved by such other Governmental Authority as may be necessary in the opinion of counsel to the Company and counsel to the seller or sellers of Registrable Common Stock to enable the seller or sellers thereof to consummate the disposition of such Registrable Common Stock;

                              (vi)    use its reasonable best efforts to obtain and, if obtained, furnish to each seller of Registrable Common Stock, and each such seller’s underwriters, if any, (A) a signed opinion of counsel for the Company, dated the effective date of such registration statement (and, if such registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters), reasonably satisfactory (based on the customary form and substance of opinions of issuers’ counsel customarily given in such offerings) in form and substance to such seller, and (B) a “cold comfort” letter, dated the effective date of such registration statement (and, if such registration involves an underwritten offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters) and signed by the independent registered public accounting firm that has certified the Company’s financial statements included or incorporated by reference in such registration statement, reasonably satisfactory (based on the customary form and substance of “cold comfort” letters of issuers’ independent registered public accounting firms customarily given in such offerings) in form and substance to such seller, in each case, covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the independent registered public accounting firm’s comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuers’ counsel and in independent registered public accounting firms’ comfort letters delivered to underwriters in underwritten Public Offerings of securities;

                              (vii)   (A) notify each seller of Registrable Common Stock and of any other securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and (B) at the written

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request of any such seller of Registrable Common Stock or other securities, promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus so that, as thereafter delivered to the purchasers of such securities, such prospectus, as supplemented or amended, shall not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

                              (viii)  use its reasonable best efforts to obtain the withdrawal at the earliest possible moment of any order suspending the effectiveness of a registration statement relating to the Registrable Common Stock;

                              (ix)   make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of at least twelve months, but not more than eighteen months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and furnish to each seller of Registrable Common Stock and to the managing underwriter, if any, at least ten days prior to the filing thereof a copy of any amendment or supplement to any registration statement or prospectus containing such earnings statement;

                              (x)     otherwise comply with all applicable rules and regulations of the Commission and any other Governmental Authority having jurisdiction over the offering;

                              (xi)    if the Common Stock is then listed on a national securities exchange, use its reasonable best efforts to cause all Registrable Common Stock covered by a registration statement to be listed on such exchange;

                              (xii)   provide a transfer agent and registrar for the Registrable Common Stock covered by a registration statement no later than the effective date thereof;

                              (xiii)  enter into such agreements (including an underwriting agreement in customary form) and take such other actions as the Stockholder shall reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock, including customary indemnification;

                              (xiv)   if requested by the managing underwriter(s) or the Stockholder, promptly (A) incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter(s) and the Stockholder agree should be included therein relating to the plan of distribution with respect to such Registrable Common Stock (including information with respect to the number of shares of Registrable Common Stock being sold to such underwriters and the purchase price being paid therefor by such underwriters) and relating to any other terms of the underwritten offering of the Registrable Common Stock to be sold in such offering; and (B) make all required filings of such prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

                              (xv)    cooperate with the Stockholder and the managing underwriter(s), if any, (A) to facilitate the timely preparation and delivery of certificates representing Registrable

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Common Stock to be sold which do not bear any restrictive legends and (b) to enable such Registrable Common Stock to be in such share amounts and registered in such names as the managing underwriter(s) or, if none, the Stockholder may request at least three Business Days prior to any sale of Registrable Common Stock.

                    (b)     Delivery of Stockholder Information. As a condition to the obligations of the Company to complete any registration pursuant to this Agreement with respect to the Registrable Common Stock, the Stockholder must furnish to the Company in writing such information (the “Stockholder Information”) regarding itself and any of its Affiliates or transferees who may be participating in such offering, the Registrable Common Stock held by them and the intended methods of disposition of the Registrable Common Stock held by them as are necessary to effect the registration of the Registrable Common Stock and as may be requested in writing by the Company. At least 30 days prior to the first anticipated filing date of a registration statement for any registration under this Agreement, the Company shall notify in writing the Stockholder of the Stockholder Information which the Company is requesting from the Stockholder, whether or not the Stockholder has elected to have any of the Registrable Common Stock included in the registration statement. If within ten days prior to the anticipated filing date the Company has not received the requested Stockholder Information from the Stockholder, then the Company may file the registration statement without including Registrable Common Stock.

                    (c)     Prospectus Distribution. The Stockholder agrees that, as of the date that a final prospectus is made available to it for distribution to prospective purchasers of Registrable Common Stock, the Stockholder shall cease to distribute copies of any preliminary prospectus prepared in connection with the offer and sale of such Registrable Common Stock. The Stockholder further agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.4(a)(vii), the Stockholder shall forthwith discontinue the Stockholder’s disposition of Registrable Common Stock pursuant to the registration statement relating to such Registrable Common Stock until the Stockholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.4(a)(vii) and, if so directed by the Company, shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in the Stockholder’s possession of the prospectus relating to such Registrable Common Stock current at the time of receipt of such notice. If any event of the kind described in Section 2.4(a)(vii) occurs and such event is the fault solely of the Stockholder due to the inaccuracy of the Stockholder Information provided by the Stockholder for inclusion in the registration statement, the Stockholder shall pay all Expenses attributable to the preparation, filing and delivery of any supplemented or amended prospectus contemplated by Section 2.4(a)(vii).

          2.5     Underwritten Offerings.

                    (a)     Requested Underwritten Offerings. If requested by the underwriters in connection with a request for a registration under Section 2.1(a) that is a firm commitment underwritten offering, the Company and the Stockholder shall enter into a firm commitment underwriting agreement with such underwriters for such offering, such agreement (i) to be reasonably satisfactory in substance and form to the Company and the Stockholder and (ii) to contain such representations and warranties by the Company and the Stockholder and such other

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terms as are customary in agreements of that type, including indemnification and contribution to the effect and to the extent provided in Section 2.8.

                    (b)     Piggyback Underwritten Offerings; Priority.

                              (i)     If the Company proposes to register any of its securities under the Securities Act for its own account as contemplated by Section 2.2 and such securities are to be distributed by or through one or more underwriters, and if the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that if all shares of Registrable Common Stock requested to be included in such registration were so included, in such underwriter’s opinion, the number and type of securities proposed to be included in such registration would exceed the number and type of securities which could be sold in such offering within a price range acceptable to the Company (such writing to state the basis for the underwriter’s opinion and the approximate number and type of securities which may be included in such offering without such effect), then the Company shall include in such registration pursuant to Section 2.2, to the extent of the number and type of securities which the Company is so advised can be sold in such offering, (A) first, securities that the Company proposes to issue and sell for its own account, (B) second, shares of Registrable Common Stock requested to be registered by the Stockholder pursuant to Section 2.2 hereof and (C) third, other securities, if any.

                              (ii)    In the case of any other registration contemplated by Section 2.2 involving an underwritten Public Offering, if the managing underwriter of such underwritten offering shall advise the Company in writing (with a copy to the Stockholder) that if all shares of Registrable Common Stock requested to be included in such registration were so included, in such underwriter’s opinion, the number and type of securities proposed to be included in such registration would exceed the number of such securities that can be sold in such offering within a price range that is acceptable to the Stockholder, as stated by the Stockholder to such managing underwriter (such writing to state the basis of the underwriter’s opinion and the approximate number and type of securities which may be included in such offering without such effect), then the Company shall include in such registration pursuant to Section 2.2, to the extent of the number and type of securities which the Company is so advised can be sold in such offering, (A) first, the shares of Registrable Common Stock requested to be registered by the Stockholder pursuant to Section 2.2 hereof, (B) second, securities that the Company proposed to issue and sell for its own account and (C) third, other securities.

                              (iii)   The Stockholder may withdraw its request to have all or any portion of its Registrable Common Stock included in any such offering by notice to the Company within 10 days after receipt of a copy of a notice from the managing underwriter pursuant to this Section 2.5(b)

                    (c)     Stockholder to be Party to Underwriting Agreement. The Stockholder, if shares of Registrable Common Stock are to be distributed by underwriters in an underwritten offering contemplated by Section 2.5(b), shall be a party to the underwriting agreement between the Company and such underwriters, and the Stockholder, at its option, may reasonably require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit

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of the Stockholder and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement be conditions precedent to the obligations of the Stockholder. Neither the Stockholder nor any of its Affiliates or transferees shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than customary representations, warranties or agreements of selling stockholders.

                    (d)     Holdback Agreements.

                              (i)     The Stockholder agrees, unless otherwise agreed to by the managing underwriter for any underwritten offering pursuant to this Agreement, not to effect any sale or distribution of any equity securities of the Company or securities convertible into or exchangeable or exercisable for equity securities of the Company, including any sale under Rule 144 under the Securities Act, during the 10 days prior to the date on which an underwritten registration of Registrable Common Stock pursuant to Section 2.1 or 2.2 has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration or to the extent that the Stockholder is prohibited by applicable law from agreeing to withhold securities from sale or is acting in its capacity as a fiduciary or an investment adviser. Without limiting the scope of the term “fiduciary,” a holder shall be deemed to be acting as a fiduciary or an investment adviser if its actions or the securities proposed to be sold are subject to the Employee Retirement Income Security Act of 1974, as amended, the Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended, or if such securities are held in a separate account under applicable insurance law or regulation.

                              (ii)    The Company agrees (A) not to effect any Public Offering or distribution of any equity securities of the Company, or securities convertible into or exchangeable or exercisable for equity securities of the Company, during the 10 days prior to the date on which any underwritten registration pursuant to Section 2.1(a) or 2.2 (but not Section 2.1(g)) has become effective and until 90 days after the effective date of such underwritten registration, except as part of such underwritten registration, and (B) to cause each holder of any equity securities, or securities convertible into or exchangeable or exercisable for equity securities, in each case, acquired from the Company at any time on or after the date of this Agreement (other than in a Public Offering), to agree not to effect any Public Offering or distribution of such securities, during such period.

          2.6     Postponements.

                    (a)     Failure to File. If the Company shall fail to file any registration statement to be filed pursuant to a request for registration under Section 2.1(a) hereof, the Stockholder shall have the right to withdraw the request for registration. Any such withdrawal shall be made by giving written notice to the Company within 20 days after, in the case of a request pursuant to Section 2.1(a) hereof, the date on which a registration statement would otherwise have been required to have been filed with the Commission under Section 2.4(a)(i) (i.e., 20 days after the date that is 90 days after the receipt by the Company of the written request from the Stockholder). In the event of such withdrawal, the request for registration shall not be counted for purposes of determining the number of registrations to which the Stockholder is entitled

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pursuant to Section 2.1 hereof. The Company shall pay all Expenses incurred in connection with a request for registration withdrawn pursuant to this paragraph.

                    (b)     Adverse Effect. The Company shall not be obligated to file any registration statement, or file any amendment or supplement to any registration statement, and may suspend the Stockholder’s rights to make sales pursuant to any effective registration statement, at any time (but not to exceed one time in any 12-month period) when the Company, in the good faith judgment of the Board, reasonably believes that the filing thereof at the time requested, or the offering of securities pursuant thereto, would have a material adverse affect on the Company’s present or proposed operations, or would materially adversely affect a pending or proposed Public Offering of the Company’s securities, a material financing, or a material acquisition, merger, recapitalization, consolidation, reorganization or similar transaction, or negotiations, discussions or pending proposals with respect thereto. The filing of a registration statement, or any amendment or supplement thereto, by the Company cannot be deferred, and the Stockholder’s rights to make sales pursuant to an effective registration statement cannot be suspended, pursuant to the provisions of the preceding sentence for more than 10 days after the abandonment or consummation of any of the foregoing proposals or transactions or for more than 120 days after the date of the Board’s determination referenced in the preceding sentence. If the Company suspends the Stockholder’s rights to make sales pursuant hereto, the applicable registration period shall be extended by the number of days of such suspension.

          2.7     Indemnification.

                    (a)     By the Company. In connection with any registration statement filed by the Company pursuant to Section 2.1 or 2.2 hereof, to the fullest extent permitted by law, the Company shall and hereby agrees to indemnify and hold harmless (i) the Stockholder and any other sellers of Registrable Common Stock covered by such registration statement, (ii) each other Person who participates as an underwriter in the offering or sale of such securities, (iii) each other Person, if any, who controls (within the meaning of the Exchange Act) the Stockholder or any seller or any such underwriter, and (iv) their respective shareholders, members, directors, officers, managers, employees, partners, agents and Affiliates (each, a “Company Indemnitee”), against any losses, claims, damages, liabilities (including actions or proceedings, whether commenced or threatened, in respect thereof, whether or not such indemnified party is a party thereto), joint or several, and expenses, including the reasonable fees, disbursements and other charges of legal counsel and reasonable costs of investigation, in each case to which such Company Indemnitee may become subject under the Securities Act or otherwise (collectively, a “Loss” or “Losses”), insofar as such Losses arise out of or are based upon (A) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered or otherwise offered or sold under the Securities Act or otherwise, any preliminary prospectus, final prospectus or summary prospectus related thereto, or any amendment or supplement thereto (or any document incorporated by reference therein) (collectively, “Offering Documents”), or (B) any omission or alleged omission to state in such Offering Documents a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances in which they were made not misleading, or (C) any violation by the Company of any federal or state law, rule or regulation applicable to the Company and relating to action required of or inaction by the Company in connection with any such registration; provided that, the Company shall not be liable in any such case to the extent

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that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such Offering Documents in reliance upon and in conformity with information furnished to the Company in a writing duly executed by such Company Indemnitee specifically stating that it is expressly for use therein; and provided, further, that the Company shall not be liable to any Person who participates as an underwriter in the offering or sale of shares of Registrable Common Stock or who controls (within the meaning of the Exchange Act) such underwriter, in any such case to the extent that any such Loss arises out of such Person’s failure to send or give a copy of the final prospectus (including any documents incorporated by reference therein), as the same may be then supplemented or amended, to the Person asserting an untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Common Stock to such Person if such statement or omission was corrected in such final prospectus. The foregoing indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any Company Indemnitee and shall survive the transfer of such securities by such Company Indemnitee.

                    (b)     By the Stockholder. In connection with any registration statement filed by the Company pursuant to Section 2.1 or 2.2 in which shares of Registrable Common Stock are registered for sale, the Stockholder shall, and hereby agrees to, indemnify and hold harmless to the fullest extent permitted by law the Company and each of its directors, officers, employees, agents, Affiliates and each other Person, if any, who controls (within the meaning of the Exchange Act) the Company (each, a “Stockholder Indemnitee”), against all Losses insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Offering Document or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in the light of circumstances in which they were made not misleading, if such untrue statement or alleged untrue statement or omission or alleged omission was made by the Company in reliance upon and in conformity with information furnished to the Company in a writing duly executed by the Stockholder specifically stating that it is expressly for use therein; provided, that the liability of such indemnifying party under this Section 2.7(b) shall be limited to the amount of the net proceeds (after giving effect to underwriting discounts and commissions) received by the Stockholder in the sale of Registrable Common Stock giving rise to such liability. The foregoing indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Stockholder Indemnitee and shall survive the transfer of such securities by such indemnifying party.

                    (c)     Notice of Loss, Etc. Promptly after receipt by an indemnified party of written notice of the commencement of any action or proceeding involving a Loss referred to in Section 2.7(a) or (b), such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under Section 2.7(a) or (b) except to the extent that the indemnifying party is materially and actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, (i) the indemnifying party shall be entitled to participate in and, unless in the indemnified party’s reasonable judgment a conflict of interest between the indemnified and indemnifying parties exists in respect of such Loss, to assume and control the defense thereof, in each case at its own

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expense, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to the indemnified party, and (ii) after its assumption of the defense thereof, the indemnifying party shall not be liable to the indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation, unless in the indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defense thereof. No indemnifying party shall be liable for any settlement of any such action or proceeding effected without the indemnifying party’s written consent, which shall not be unreasonably withheld. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability in respect of such Loss or which requires action on the part of the indemnified party or otherwise subjects the indemnified party to any obligation or restriction to which it would not otherwise be subject.

                    (d)     Contribution. If the indemnification provided for in Section 2.7(a) or (b) shall for any reason be unavailable in respect of any Loss, then, in lieu of the amount paid or payable under Section 2.7(a) or (b), the indemnified party and the indemnifying party under Section 2.7(a) or (b), as applicable, shall contribute to the aggregate Losses (including legal or other expenses reasonably incurred in connection with investigating the same) (i) in such proportion as is appropriate to reflect the relative fault of the Company and the prospective sellers of Registrable Common Stock covered by the registration statement which resulted in such Loss with respect to the statements, omissions or action which resulted in such Loss, as well as any other relevant equitable considerations, or (ii) if the allocation provided by the preceding clause (i) is not permitted by applicable law, in such proportion as shall be appropriate to reflect the relative benefits received by the Company, on the one hand, and such prospective sellers, on the other hand, from their sale of Registrable Common Stock; provided that, for purposes of this clause (ii), the relative benefits received by the prospective sellers shall be deemed not to exceed the amount received by such sellers. No Person guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The obligations, if any, of the selling holders of Registrable Common Stock to contribute as provided in this subsection (c) are not joint but are several in proportion to the relative value of their respective Registrable Common Stock covered by such registration statement. In addition, no Person shall be obligated to contribute amounts under this Section 2.7(d) in payment for any settlement of any Loss effected without such Person’s consent.

                    (e)      Other Indemnification. The Company shall, in connection with any registration statement filed by the Company pursuant to Section 2.1(a), 2.1(g) or 2.2, and, if the Stockholder has registered for sale Registrable Common Stock, the Stockholder shall, with respect to any required registration or other qualification of securities under any federal or state law or regulation of any Governmental Authority other than the Securities Act, indemnify Stockholder Indemnitees and Company Indemnitees, respectively, against Losses, or, to the extent that indemnification shall be unavailable to a Stockholder Indemnitee or Company Indemnitee, contribute to the aggregate Losses of such Stockholder Indemnitee or Company Indemnitee in a manner similar to that specified in the preceding subsections of this Section 2.7 (with appropriate modifications).

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                    (f)     Indemnification Payments. The indemnification and contribution required by this Section 2.7 shall be made by periodic payments of the amount thereof during the course of any investigation or defense, as and when any Loss is incurred and is due and payable.

          2.8     Registration Rights to Others. If the Company shall at any time hereafter provide to any holder of any securities of the Company rights with respect to the registration of such securities under the Securities Act, such rights shall not be in conflict with or adversely affect any of the rights provided to the holders of Registrable Common Stock in this Agreement or conflict (in a manner that adversely affects holders of Registrable Common Stock) with any other provisions included in this Agreement. To the extent the Company provides any right to others that are more favorable than those provided for herein, the Company shall be required to make appropriate modifications to this Agreement to ensure that the Stockholder will have the benefit of terms that are at least as favorable as those provided to such other Persons.

          2.9     Adjustments Affecting Registrable Common Stock. Without the written consent of the Stockholder, the Company shall not effect or permit to occur any combination, subdivision or reclassification of Registrable Common Stock that would materially adversely affect the ability of the Stockholder to include shares of such Registrable Common Stock in any registration of the Company’s securities under the Securities Act or the marketability of such Registrable Common Stock under any such registration or other offering.

          2.10     Rule 144 and Rule 144A. The Company shall take all actions reasonably necessary to enable the Stockholder to sell shares of Registrable Common Stock without registration under the Securities Act within the limitations of the exemptions provided by (a) Rule 144 under the Securities Act, (b) Rule 144A under the Securities Act, or (c) any similar rules or regulations hereafter adopted by the Commission, including the Company’s filing on a timely basis all reports required to be filed under the Exchange Act. Upon the written request of the Stockholder, the Company shall deliver to the Stockholder a written statement as to the Company’s compliance with such requirements. The Stockholder acknowledges that the Company has not filed on a timely basis all reports required to be filed under the Exchange Act, and the Stockholder waives any breach of this Agreement based on such failure.

          2.11     Nominees for Beneficial Owners. In the event that any shares of Registrable Common Stock are held by a nominee for the beneficial owner thereof, such beneficial owner may, at its election delivered to the Company in writing, be treated as the Stockholder owning such shares of Registrable Common Stock for purposes of any request or other action by the Stockholder pursuant to this Agreement or any determination of the number or percentage of shares of Registrable Common Stock held by the Stockholder contemplated by this Agreement. If the beneficial owner of any shares of Registrable Common Stock so elects, the Company may require assurances reasonably satisfactory to the Company of such owner’s beneficial ownership of such shares of Registrable Common Stock.

          2.12     Calculation of Number of Shares of Registrable Common Stock. For purposes of this Agreement, all references to a percentage or number of shares of Registrable Common Stock or Common Stock shall be calculated based upon the number of shares of Registrable Common Stock or Common Stock, as the case may be, outstanding at the time such calculation is made and shall exclude any Registrable Common Stock or Common Stock, as the case may be, owned

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by the Company or any Subsidiary of the Company. For the purposes of calculating the number of shares of Registrable Common Stock or Common Stock as contemplated by the previous sentence, the term “Stockholder” shall include all Affiliates and transferees thereof owning any shares of Registrable Common Stock or Common Stock.

          2.13     Termination of Registration Rights. The Company’s obligations under Sections 2.1 and 2.2 hereof to register Common Stock for sale under the Securities Act shall terminate on the first date on which no shares of Registrable Common Stock are held by the Stockholder, its Affiliates or any other Person to whom the Stockholder has assigned its rights hereunder.

ARTICLE III
MISCELLANEOUS

          3.1     Injunctive Relief. The Stockholder and the Company acknowledge and agree that a violation of any of the terms of this Agreement will cause irreparable injury for which adequate remedy at law is not available. Accordingly, it is agreed that the Company and the Stockholder shall each be entitled to an injunction, restraining order or other equitable relief to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which they may be entitled at law or equity.

          3.2     Amendments; Entire Agreement. This Agreement may be amended and the Company may take action herein prohibited, or omit to perform any act herein required to be performed by it, if and only if the Company has obtained the prior written consent of the Stockholder. This Agreement constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among any or all of the parties with respect to the subject matter hereof.

          3.3     Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

          3.4     Successors and Assigns. The provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, each of which successors shall agree in a writing in form and substance reasonably satisfactory to the Company to become a party hereto and to be bound hereby to the same extent as the parties hereto. This Agreement and the rights, duties and obligations hereunder of the Stockholder may be assigned or transferred by the Stockholder, in whole or in part, without the prior written consent of the Company, to any Person to which the Stockholder transfers any rights in shares of Registrable Common Stock. The Stockholder shall promptly notify the Company in writing of any such assignment or transfer.

          3.5     Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by facsimile or other electronic transmission),

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and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand, or two Business Days after being delivered to a recognized courier (whose stated terms of delivery are two Business Days or less to the destination of such notice), or, in the case of an electronic notice, when received, addressed as set forth below to the parties hereto, or to such other address as may be hereafter notified by the respective parties hereto:

 

 

 

 

(a)

If to the Company:

 

 

 

 

 

Butler International Inc.

 

 

110 Summit Avenue

 

 

Montvale, New Jersey 07645

 

 

Attention: Edward M. Kopko

 

 

Fax: (954) 761-9675

 

 

 

 

 

With a copy to:

 

 

 

 

 

McBreen & Kopko

 

 

20 North Wacker Drive, Suite 2520

 

 

Chicago, Illinois 60606

 

 

Attention: James Stern, Esq.

 

 

 

 

 

Fax: (312) 332-2657

 

 

 

 

(b)

If to the Stockholder:

 

 

 

 

 


 

 

 

 

 

With a copy to:

 

 

 

 

 


          3.6     Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

          3.7     Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New Jersey applicable to contracts made and to be fully performed therein. The parties hereto irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the County of Bergen, in the State of New Jersey, over any action or proceeding arising out of or relating to this Agreement or the transaction contemplated hereby to the fullest extent they may effectively do so under applicable law. The parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, (a) any claim that they are not subject to the jurisdiction of any such court, (b) any objection that they may now or hereafter have to the laying of the venue of any such action or proceeding brought in any such court and (c) any claim that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

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          3.8     Waiver of July Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

[Remainder of this page intentionally blank]

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Execution

          IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first above written.

 

 

 

 

BUTLER INTERNATIONAL, INC.,

 

 

 

 

 

 

 

By:

 

 


 

 

Edward M. Kopko, Chairman & CEO

 

 


 

 

 

 

By:

 

 


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EX-10.4 9 d70210_ex10-4.htm FORM OF WARRANT

EXHIBIT 10.4

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

THE SECURITIES REPRESENTED BY THIS WARRANT ARE SUBJECT TO A REGISTRATION RIGHTS AGREEMENT DATED AS OF DECEMBER 15, 2006 (AS THE SAME MAY BE AMENDED, MODIFIED OR SUPPLEMENTED, THE “REGISTRATION RIGHTS AGREEMENT”), A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND MAY BE OBTAINED UPON WRITTEN REQUEST AND WITHOUT CHARGE.

BUTLER INTERNATIONAL, INC.
WARRANT TO PURCHASE _______ SHARES
OF COMMON STOCK

          THIS CERTIFIES THAT, for value received, ______________________ and its assignees are entitled to subscribe for and purchase _______ shares (as adjusted pursuant to Section 5 hereof, the “Shares”) of the fully-paid and nonassessable Common Stock of BUTLER INTERNATIONAL, INC., a Maryland corporation (the “Corporation”), at a price of $2.00 per share (such price, as adjusted pursuant to Section 5 hereof, the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth.

          1.       Definitions. As used herein:

                    (a)     “Common Stock” shall mean the Corporation’s Common Stock, par value $0.001 per share, and any stock into or for which such Common Stock may hereafter be converted or exchanged.

                    (b)     “Date of Grant” shall mean December 15, 2006.

                    (c)     “Fair Market Value” of a share of Common Stock as of a particular date shall mean (i) if traded on a national securities exchange, the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to such date; (ii) if traded on the Nasdaq Stock Market or other over-the-counter system, the average of the closing bid prices of the Common Stock over the five trading days immediately prior to such date; and (iii) if there is no public market for the Common Stock, the fair market value as determined by mutual agreement of the holder of this Warrant and the Corporation.

                    (d)     “Other Warrants” shall mean any other warrants issued by the Corporation in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant.



                    (e)     “Warrant” shall mean this warrant and the Other Warrants, unless the context clearly requires otherwise.

          2.       Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the fifth anniversary of the Date of Grant.

          3.        Method of Exercise; Payment; Issuance of New Warrant. This Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by the surrender of this Warrant, with a notice of exercise substantially in the form attached hereto as Exhibit A duly completed and executed, at the principal office of the Corporation, accompanied by:

                    (a)     a certified or bank check, or wire transfer to an account designated by the Corporation (a “Wire Transfer”), of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; or

                    (b)     certificates evidencing a number of shares of the Corporation’s Series A 7% Cumulative Preferred Stock (the “Series A Preferred Stock”) having an aggregate Redemption Price (as defined in the Articles Supplementary creating the Series A Preferred Stock) equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased.

                    (c)     The person or persons in whose names any certificates representing Shares of Common Stock issuable upon exercise of this Warrant are to be issued shall be deemed to have become the holders of record of, and shall be treated for all purposes as the record holders of, the Shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.

                    (d)     In the event of any exercise of this Warrant, certificates for the shares of Common Stock so purchased shall be delivered to the holder hereof as soon as possible and in any event within 30 days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant has not been exercised shall also be issued to the holder hereof as soon as possible and in any event within such 30-day period; provided, however, at such time as the Corporation is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, if requested by the holder of this Warrant, the Corporation shall cause its transfer agent to deliver the certificate representing the Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

          4.       Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of this Warrant shall, upon issuance pursuant to the terms and conditions herein, be fully-paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. During the period within which this Warrant may be exercised, the Corporation shall at all times have authorized and reserved for issuance upon exercise of this

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Warrant a sufficient number of shares of its Common Stock to provide for the exercise of this Warrant.

          5.       Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

                    (a)     Reclassification or Merger. In case of any reclassification or change of the Common Stock issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Corporation with or into another corporation (other than a merger with another corporation in which the Corporation is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Corporation, the Corporation (or such successor or purchasing corporation, as the case may be) shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), or the Corporation shall make appropriate provision without the issuance of a new Warrant, so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Common Stock theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of shares of Common Stock then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing corporation, at the option of the holder of this Warrant, the securities of the successor or purchasing corporation having a value at the time of the transaction equivalent to the valuation of the Common Stock at the time of the transaction. Any such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subsection shall similarly apply to successive reclassifications, changes, mergers and transfers.

                    (b)     Subdivision or Combination of Shares. If the Corporation at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding shares of Common Stock, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

                    (c)     Stock Dividends and Other Distributions. If the Corporation at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock payable in Common Stock, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Price in effect immediately prior to such date of determination by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding

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immediately after such dividend or distribution; or (ii) make any other distribution with respect to Common Stock (except any distribution specifically provided for in Sections 5(a) and 5(b)), then, in each such case, provision shall be made by the Corporation such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Common Stock as of the record date fixed for the determination of the shareholders of the Corporation entitled to receive such dividend or distribution.

                    (d)     Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the number of Shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

                    (e)     Adjustment of Warrant Price of Warrants. In the event the Corporation’s reported earnings before interest, taxes, depreciation and amortization (EBITDA) for fiscal year 2007 is less than $15,660,000, then the Warrant Price shall be adjusted downward by 10% below the Warrant Price in effect immediately prior to the Company’s announcement of fiscal year 2007 EBITDA.

          6.      Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the Corporation shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 16 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Common Stock shall be adjusted, the Corporation shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Common Stock after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 16 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

          7.       No Dilution or Impairment.

                    (a)     The Corporation shall not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the holder against dilution or other impairment. Without limiting the generality of the foregoing, the Corporation (a) shall not increase the par value of any shares of stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise, (b) shall take all such action as may be necessary or appropriate in order that the Corporation

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may validly and legally issue fully paid and non-assessable shares of stock on the exercise of all Warrants from time to time outstanding, (c) shall not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon voluntary or involuntary dissolution, liquidation or winding up, unless the rights of the Holders thereof shall be limited to a fixed sum or percentage of par value in respect of participation in dividends and in any such distribution of assets, and (d) shall not transfer all or substantially all of its properties and assets to any other person (corporate or otherwise), or consolidate with or merge into any other person or permit any such person to consolidate with or merge into the Corporation (if the Corporation is not the surviving person), unless such other person shall expressly assume in writing and shall be bound by all the terms of this Warrant.

                    (b)     Such antidilution rights shall not be restated, amended, modified or waived in any manner that is adverse to the holder hereof without such holder’s prior written consent. The Corporation shall promptly provide the holder hereof with any restatement, amendment, modification or waiver of the Corporation’s Charter promptly after the same has been made.

          8.       Fractional Shares. No fractional shares of Common Stock shall be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Corporation shall make a cash payment therefor based on the Fair Market Value of the Common Stock on the date of exercise.

          9.       Compliance with Securities Act; Disposition of Warrant or Shares of Common Stock.

                    (a)     The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment and that such holder shall not offer, sell or otherwise dispose of this Warrant, or any shares of Common Stock to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which shall not result in a violation of the Securities Act of 1933, as amended (the “Act”), or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the shares of Common Stock so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Corporation. This Warrant and all shares of Common Stock issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE

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FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

Such legend shall be removed by the Corporation, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated.

                    (b)     Applicability of Restrictions. No restrictions of any legend described in this Warrant shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Common Stock to be purchased upon exercise hereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, or (iii) to any affiliate of the holder if the holder is a corporation; provided, however, in any such transfer, if applicable, the transferee shall on the Corporation’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

          10.     Registration Rights. The Corporation is contemporaneously granting registration rights to the holder of this Warrant for any Shares purchased upon exercise of this Warrant pursuant to that certain Registration Rights Agreement dated as of the date hereof between the Corporation and the holder. Such registration rights are freely assignable by the holder of this Warrant in connection with a permitted transfer of this Warrant or the Shares.

          11.     Voting Rights; Information; Notice of Transactions.

                    (a)     The holder of this Warrant, as such, shall be entitled to such voting rights and rights related thereto as if it were the holder of the Common Stock or other securities of the Corporation, which may at any time be issuable on the exercise hereof, including the right to vote for the election of directors or upon any matter submitted to holders of Common Stock at any meeting thereof and to receive notice of meetings, and the Corporation shall promptly take such actions as may be necessary or advisable to cause such voting rights to be included in the Corporation’s Charter. The holder of this Warrant shall cooperate with the Corporation in the exercise of such voting rights and in all other corporate matters. Notwithstanding the foregoing, nothing herein shall entitle the holder of this Warrant to receive dividends or other distributions until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.

                    (b)     The Corporation shall transmit to the holder of this Warrant such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Corporation concurrently with the distribution thereof to the shareholders.

                    (c)     The Corporation shall provide the holder of this Warrant with at least 20 days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Corporation has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Corporation’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Corporation), or any transaction (including a merger or other

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reorganization) or series of related transactions, in which more than 50% of the voting power of the Corporation is disposed of.

          12.      Required Exercise. The Company may require this warrant to be exercised at any time after May 1, 2007 upon not less than 30 days’ advance written notice to Holder (a “Notice of Required Exercise”), provided that (a) a registration statement with the Securities and Exchange Commission is then in effect as to the shares of Common Stock underlying the Warrant and will be in effect as of a date 30 days from the date of the Notice of Required Exercise; (b) for a period of not less than 10 consecutive trading days prior to the date of the Notice of Required Exercise, the Common Stock has closed at a price of $4.00 per share or higher; and (c) the Common Stock is listed on a national securities exchange and trading of the Common Stock on such exchange has not been suspended. All warrants not exercised within 30 days of the Notice of Required Exercise will be cancelled.

          13.     Representations and Warranties. The Corporation represents and warrants to the holder of this Warrant as follows:

                    (a)     This Warrant has been duly authorized and executed by the Corporation and is a valid and binding obligation of the Corporation enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies;

                    (b)     The Shares have been duly authorized and reserved for issuance by the Corporation and, when issued in accordance with the terms hereof, shall be validly issued, fully paid and non-assessable;

                    (c)     Neither the execution and delivery of this Warrant nor the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof (i) violates the Corporation’s Charter or Bylaws, (ii) contravenes any law, governmental rule or regulation, judgment or order applicable to the Corporation, or (iii) conflicts with or contravenes any provision of, or constitutes a default under, any indenture, mortgage, contract or other instrument to which the Corporation is a party or by which it is bound or requires the consent or approval of, the giving of notice to, the registration or filing with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person, except for the filing of notices pursuant to federal and state securities laws, which filings shall be effected by the time required thereby.

          14.     Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

          15.     Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Corporation shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Corporation or to the Corporation at the address indicated therefor on the signature page of this Warrant.

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          16.     Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Corporation by merger, consolidation or acquisition of all or substantially all of the Corporation’s assets, and all of the obligations of the Corporation relating to the Common Stock issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Corporation shall inure to the benefit of the successors and assigns of the holder hereof.

          17.     Lost Warrants or Stock Certificates. The Corporation covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Corporation, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Corporation shall make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

          18.     Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

          19.     Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New Jersey.

          20.      Survival of Representations, Warranties and Agreements. All representations and warranties of the Corporation and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Corporation and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

          21.       Remedies. In case any one or more of the covenants and agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Corporation), or the Corporation (in the case of a breach by a holder), may proceed to protect and enforce their or its rights either by suit in equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

          22.       No Impairment of Rights. The Corporation shall not, by amendment of its Charter or through any other means, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

          23.       Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

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          24.       Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

          25.       Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

          IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

 

 

BUTLER INTERNATIONAL, INC.

 

 

 

By:

 


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EXHIBIT A
NOTICE OF EXERCISE

 

 

 

 

To:

BUTLER INTERNATIONAL, INC. (the “Corporation”)

 

 

 

 

 

1.

The undersigned hereby:

 

 

 

 

 

 

o

elects to purchase ________ shares of Common Stock of the Corporation pursuant to Section 3(a) of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full in cash, or

 

 

 

 

 

 

o

elects to purchase ________ shares of Common Stock of the Corporation pursuant to the Section 3(b) of the attached Warrant, and tenders herewith certificates evidencing __________ shares of the Corporation’s Series A 7% Cumulative Preferred Stock.

          2.      Please issue a certificate or certificates representing ________ shares of Common Stock in the name of the undersigned or in such other name or names as are specified below:

 


(Name)

 

 


 


(Address)

          3.        The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

 

 

 


(Signature)

 


 

      (Date)

 



EX-10.5 10 d70210_ex10-5.htm FORM OF WARRANT

EXHIBIT 10.5

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

THE SECURITIES REPRESENTED BY THIS WARRANT ARE SUBJECT TO A REGISTRATION RIGHTS AGREEMENT DATED AS OF NOVEMBER 29, 2006 (AS THE SAME MAY BE AMENDED, MODIFIED OR SUPPLEMENTED, THE “REGISTRATION RIGHTS AGREEMENT”), A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION AND MAY BE OBTAINED UPON WRITTEN REQUEST AND WITHOUT CHARGE.

BUTLER INTERNATIONAL, INC.
WARRANT TO PURCHASE ___________ SHARES
OF COMMON STOCK

          THIS CERTIFIES THAT, for value received, ____________ and its assignees are entitled to subscribe for and purchase _____________ shares (as adjusted pursuant to Section 5 hereof, the “Shares”) of the fully-paid and nonassessable Common Stock of BUTLER INTERNATIONAL, INC., a Maryland corporation (the “Corporation”), at a price of $2.00 per share (such price, as adjusted pursuant to Section 5 hereof, the “Warrant Price”), subject to the provisions and upon the terms and conditions hereinafter set forth.

          1.       Definitions. As used herein:

                    (a)     “Common Stock” shall mean the Corporation’s Common Stock, par value $0.001 per share, and any stock into or for which such Common Stock may hereafter be converted or exchanged.

                    (b)     “Date of Grant” shall mean December __, 2006.

                    (c)     “Fair Market Value” of a share of Common Stock as of a particular date shall mean (i) if traded on a national securities exchange, the average of the closing prices of the Common Stock on such exchange over the five trading days immediately prior to such date; (ii) if traded on the Nasdaq Stock Market or other over-the-counter system, the average of the closing bid prices of the Common Stock over the five trading days immediately prior to such date; and (iii) if there is no public market for the Common Stock, the fair market value as determined by mutual agreement of the holder of this Warrant and the Corporation.

                    (d)     “Other Warrants” shall mean any other warrants issued by the Corporation in connection with the transaction with respect to which this Warrant was issued, and any warrant issued upon transfer or partial exercise of or in lieu of this Warrant.



                    (e)     “Warrant” shall mean this warrant and the Other Warrants, unless the context clearly requires otherwise.

          2.       Term. The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time from the Date of Grant through the fifth anniversary of the Date of Grant.

          3.       Method of Exercise; Payment; Issuance of New Warrant. This Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by the surrender of this Warrant, with a notice of exercise substantially in the form attached hereto as Exhibit A duly completed and executed, at the principal office of the Corporation, accompanied by:

                    (a)     a certified or bank check, or wire transfer to an account designated by the Corporation (a “Wire Transfer”), of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased; or

                    (b)     certificates evidencing a number of shares of the Corporation’s Series A 7% Cumulative Preferred Stock (the “Series A Preferred Stock”) having an aggregate Redemption Price (as defined in the Articles Supplementary creating the Series A Preferred Stock) equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased.

                    (c)     The person or persons in whose names any certificates representing Shares of Common Stock issuable upon exercise of this Warrant are to be issued shall be deemed to have become the holders of record of, and shall be treated for all purposes as the record holders of, the Shares represented thereby (and such shares shall be deemed to have been issued) immediately prior to the close of business on the date or dates upon which this Warrant is exercised.

                    (d)     In the event of any exercise of this Warrant, certificates for the shares of Common Stock so purchased shall be delivered to the holder hereof as soon as possible and in any event within 30 days after such exercise and, unless this Warrant has been fully exercised or expired, a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant has not been exercised shall also be issued to the holder hereof as soon as possible and in any event within such 30-day period; provided, however, at such time as the Corporation is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, if requested by the holder of this Warrant, the Corporation shall cause its transfer agent to deliver the certificate representing the Shares issued upon exercise of this Warrant to a broker or other person (as directed by the holder exercising this Warrant) within the time period required to settle any trade made by the holder after exercise of this Warrant.

          4.       Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of this Warrant shall, upon issuance pursuant to the terms and conditions herein, be fully-paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. During the period within which this Warrant may be exercised, the Corporation shall at all times have authorized and reserved for issuance upon exercise of this

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Warrant a sufficient number of shares of its Common Stock to provide for the exercise of this Warrant.

          5.       Adjustment of Warrant Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

                    (a)     Reclassification or Merger. In case of any reclassification or change of the Common Stock issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any merger of the Corporation with or into another corporation (other than a merger with another corporation in which the Corporation is the acquiring and the surviving corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant), or in case of any sale of all or substantially all of the assets of the Corporation, the Corporation (or such successor or purchasing corporation, as the case may be) shall duly execute and deliver to the holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this Warrant), or the Corporation shall make appropriate provision without the issuance of a new Warrant, so that the holder of this Warrant shall have the right to receive, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Common Stock theretofore issuable upon exercise of this Warrant, (i) the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, merger or sale by a holder of the number of shares of Common Stock then purchasable under this Warrant, or (ii) in the case of such a merger or sale in which the consideration paid consists all or in part of assets other than securities of the successor or purchasing corporation, at the option of the holder of this Warrant, the securities of the successor or purchasing corporation having a value at the time of the transaction equivalent to the valuation of the Common Stock at the time of the transaction. Any such new Warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this subsection shall similarly apply to successive reclassifications, changes, mergers and transfers.

                    (b)     Subdivision or Combination of Shares. If the Corporation at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its outstanding shares of Common Stock, the Warrant Price shall be proportionately decreased and the number of Shares issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant Price shall be proportionately increased and the number of Shares issuable hereunder shall be proportionately decreased in the case of a combination.

                    (c)     Stock Dividends and Other Distributions. If the Corporation at any time while this Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stock payable in Common Stock, then the Warrant Price shall be adjusted, from and after the date of determination of shareholders entitled to receive such dividend or distribution, to that price determined by multiplying the Warrant Price in effect immediately prior to such date of determination by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding

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immediately after such dividend or distribution; or (ii) make any other distribution with respect to Common Stock (except any distribution specifically provided for in Sections 5(a) and 5(b)), then, in each such case, provision shall be made by the Corporation such that the holder of this Warrant shall receive upon exercise of this Warrant a proportionate share of any such dividend or distribution as though it were the holder of the Common Stock as of the record date fixed for the determination of the shareholders of the Corporation entitled to receive such dividend or distribution.

                    (d)     Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the number of Shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter.

          6.       Notice of Adjustments. Whenever the Warrant Price or the number of Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the Corporation shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 16 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In addition, whenever the conversion price or conversion ratio of the Common Stock shall be adjusted, the Corporation shall make a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the conversion price or ratio of the Common Stock after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard to Section 16 hereof, by first class mail, postage prepaid) to the holder of this Warrant.

          7.       No Dilution or Impairment.

                    (a)     The Corporation shall not, by amendment of its Charter or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the holder against dilution or other impairment. Without limiting the generality of the foregoing, the Corporation (a) shall not increase the par value of any shares of stock receivable on the exercise of this Warrant above the amount payable therefor on such exercise, (b) shall take all such action as may be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of stock on the exercise of all Warrants from time to time outstanding, (c) shall not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon voluntary or involuntary dissolution, liquidation or winding up, unless the rights of the Holders thereof shall be limited to a fixed sum or percentage of par value in respect of participation in dividends and in any such distribution of assets, and (d) shall not transfer all or substantially all of its properties and assets

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to any other person (corporate or otherwise), or consolidate with or merge into any other person or permit any such person to consolidate with or merge into the Corporation (if the Corporation is not the surviving person), unless such other person shall expressly assume in writing and shall be bound by all the terms of this Warrant.

                    (b)     Such antidilution rights shall not be restated, amended, modified or waived in any manner that is adverse to the holder hereof without such holder’s prior written consent. The Corporation shall promptly provide the holder hereof with any restatement, amendment, modification or waiver of the Corporation’s Charter promptly after the same has been made.

          8.       Fractional Shares. No fractional shares of Common Stock shall be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Corporation shall make a cash payment therefor based on the Fair Market Value of the Common Stock on the date of exercise.

          9.       Compliance with Securities Act; Disposition of Warrant or Shares of Common Stock.

                    (a)     The holder of this Warrant, by acceptance hereof, agrees that this Warrant, and the shares of Common Stock to be issued upon exercise hereof are being acquired for investment and that such holder shall not offer, sell or otherwise dispose of this Warrant, or any shares of Common Stock to be issued upon exercise hereof or any Common Stock issued upon conversion thereof except under circumstances which shall not result in a violation of the Securities Act of 1933, as amended (the “Act”), or any applicable state securities laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act and any applicable state securities laws or an exemption from such registration is available, the holder hereof shall confirm in writing that the shares of Common Stock so purchased (and any shares of Common Stock issued upon conversion thereof) are being acquired for investment and not with a view toward distribution or resale in violation of the Act and shall confirm such other matters related thereto as may be reasonably requested by the Corporation. This Warrant and all shares of Common Stock issued upon exercise of this Warrant and all shares of Common Stock issued upon conversion thereof (unless registered under the Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

Such legend shall be removed by the Corporation, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated.

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                    (b)     Applicability of Restrictions. No restrictions of any legend described in this Warrant shall apply to any transfer of, or grant of a security interest in, this Warrant (or the Common Stock to be purchased upon exercise hereof) or any part hereof (i) to a partner of the holder if the holder is a partnership or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of which the holder is a partner or to a limited liability company of which the holder is a member, or (iii) to any affiliate of the holder if the holder is a corporation; provided, however, in any such transfer, if applicable, the transferee shall on the Corporation’s request agree in writing to be bound by the terms of this Warrant as if an original holder hereof.

          10.     Registration Rights. The Corporation is contemporaneously granting registration rights to the holder of this Warrant for any Shares purchased upon exercise of this Warrant pursuant to that certain Registration Rights Agreement dated as of the date hereof between the Corporation and the holder. Such registration rights are freely assignable by the holder of this Warrant in connection with a permitted transfer of this Warrant or the Shares.

          11.     Voting Rights; Information; Notice of Transactions.

                    (a)     The holder of this Warrant, as such, shall be entitled to such voting rights and rights related thereto as if it were the holder of the Common Stock or other securities of the Corporation, which may at any time be issuable on the exercise hereof, including the right to vote for the election of directors or upon any matter submitted to holders of Common Stock at any meeting thereof and to receive notice of meetings, and the Corporation shall promptly take such actions as may be necessary or advisable to cause such voting rights to be included in the Corporation’s Charter. The holder of this Warrant shall cooperate with the Corporation in the exercise of such voting rights and in all other corporate matters. Notwithstanding the foregoing, nothing herein shall entitle the holder of this Warrant to receive dividends or other distributions until this Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.

                    (b)     The Corporation shall transmit to the holder of this Warrant such information, documents and reports as are generally distributed to the holders of any class or series of the securities of the Corporation concurrently with the distribution thereof to the shareholders.

                    (c)     The Corporation shall provide the holder of this Warrant with at least 20 days’ written notice prior to closing thereof of the terms and conditions of any of the following transactions (to the extent the Corporation has notice thereof): (i) the sale, lease, exchange, conveyance or other disposition of all or substantially all of the Corporation’s property or business, or (ii) its merger into or consolidation with any other corporation (other than a wholly-owned subsidiary of the Corporation), or any transaction (including a merger or other reorganization) or series of related transactions, in which more than 50% of the voting power of the Corporation is disposed of.

          12.     Callable Warrant. This Warrant may be redeemed by the Company at any time after May 1, 2007 upon not less than 30 days’ advance written notice to Holder (a “Notice of Redemption”), at a price equal to $4.00 per Share, provided that (a) a registration statement with the Securities and Exchange Commission is then in effect as to the shares of Common Stock

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underlying the Warrant and will be in effect as of a date 30 days from the date of the Notice of Redemption; and (b) for a period of not less than 10 trading days prior to the date of the Notice of Redemption, the Common Stock has closed at a price of $4.00 per share or higher.

          13.     Representations and Warranties. The Corporation represents and warrants to the holder of this Warrant as follows:

                    (a)     This Warrant has been duly authorized and executed by the Corporation and is a valid and binding obligation of the Corporation enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and the rules of law or principles at equity governing specific performance, injunctive relief and other equitable remedies;

                    (b)     The Shares have been duly authorized and reserved for issuance by the Corporation and, when issued in accordance with the terms hereof, shall be validly issued, fully paid and non-assessable;

                    (c)     Neither the execution and delivery of this Warrant nor the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof (i) violates the Corporation’s Charter or Bylaws, (ii) contravenes any law, governmental rule or regulation, judgment or order applicable to the Corporation, or (iii) conflicts with or contravenes any provision of, or constitutes a default under, any indenture, mortgage, contract or other instrument to which the Corporation is a party or by which it is bound or requires the consent or approval of, the giving of notice to, the registration or filing with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person, except for the filing of notices pursuant to federal and state securities laws, which filings shall be effected by the time required thereby.

          14.     Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

          15.     Notices. Any notice, request, communication or other document required or permitted to be given or delivered to the holder hereof or the Corporation shall be delivered, or shall be sent by certified or registered mail, postage prepaid, to each such holder at its address as shown on the books of the Corporation or to the Corporation at the address indicated therefor on the signature page of this Warrant.

          16.     Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Corporation by merger, consolidation or acquisition of all or substantially all of the Corporation’s assets, and all of the obligations of the Corporation relating to the Common Stock issuable upon the exercise or conversion of this Warrant shall survive the exercise, conversion and termination of this Warrant and all of the covenants and agreements of the Corporation shall inure to the benefit of the successors and assigns of the holder hereof.

          17.     Lost Warrants or Stock Certificates. The Corporation covenants to the holder hereof that, upon receipt of evidence reasonably satisfactory to the Corporation of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss,

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theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Corporation, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Corporation shall make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

          18.      Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

          19.      Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New Jersey.

          20.      Survival of Representations, Warranties and Agreements. All representations and warranties of the Corporation and the holder hereof contained herein shall survive the Date of Grant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder. All agreements of the Corporation and the holder hereof contained herein shall survive indefinitely until, by their respective terms, they are no longer operative.

          21.      Remedies. In case any one or more of the covenants and agreements contained in this Warrant shall have been breached, the holders hereof (in the case of a breach by the Corporation), or the Corporation (in the case of a breach by a holder), may proceed to protect and enforce their or its rights either by suit in equity and/or by action at law, including, but not limited to, an action for damages as a result of any such breach and/or an action for specific performance of any such covenant or agreement contained in this Warrant.

          22.      No Impairment of Rights. The Corporation shall not, by amendment of its Charter or through any other means, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holder of this Warrant against impairment.

          23.      Severability. The invalidity or unenforceability of any provision of this Warrant in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and effect.

          24.      Recovery of Litigation Costs. If any legal action or other proceeding is brought for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or misrepresentation in connection with any of the provisions of this Warrant, the successful or prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs incurred in that action or proceeding, in addition to any other relief to which it or they may be entitled.

          25.      Entire Agreement; Modification. This Warrant constitutes the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and

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contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

          IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly executed and delivered as of the Date of Grant specified above.

 

 

 

 

BUTLER INTERNATIONAL, INC.

 

 

 

By:

 

 

 


 

 

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EXHIBIT A
NOTICE OF EXERCISE

 

 

 

 

To:

BUTLER INTERNATIONAL, INC. (the “Corporation”)

 

 

 

 

 

1.

The undersigned hereby:

 

 

 

 

 

 

o

elects to purchase ________ shares of Common Stock of the Corporation pursuant to Section 3(a) of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full in cash, or

 

 

 

 

 

 

o

elects to purchase ________ shares of Common Stock of the Corporation pursuant to the Section 3(b) of the attached Warrant, and tenders herewith certificates evidencing __________ shares of the Corporation’s Series A 7% Cumulative Preferred Stock.

 

 

 

 

          2.      Please issue a certificate or certificates representing ________ shares of Common Stock in the name of the undersigned or in such other name or names as are specified below:


 


(Name)

 


 


(Address)

          3.       The undersigned represents that the aforesaid shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws.

 

 

 


 

      (Signature)

 

 


 

(Date)

 



EX-10.6 11 d70210_ex10-6.htm FORM OF SUBSCRIPTION AGREEMENT

EXHIBIT 10.6

SUBSCRIPTION AGREEMENT

Butler International, Inc.
110 Summit Avenue
Montvale, NJ 07645

Gentlemen:

                    1.      Subscription. (a) The undersigned, intending to be legally bound, hereby irrevocably subscribes to purchase from Butler International, Inc., a Maryland corporation (the “Company”), the number of shares of Series A Preferred Stock (“Series A Preferred Shares”) of the Company, par value $.001 per share, (the “Preferred Stock”) set forth on the signature page hereof, at a purchase price (the “Purchase Price”) equal to $1,000.00 per share. This subscription is submitted to you in accordance with and subject to the terms and conditions described in this Agreement, the Registration Rights Agreement, of even date herewith (the “Registration Rights Agreement”), the Warrant, of even date herewith (the “Warrant”) and the Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock (the “Articles Supplementary”), relating to an offering (the “Offering”) of up to 15,000 shares of Series A Preferred Shares (the aggregate number of shares sold pursuant to this Agreement is herein referred to as the “Shares”). The undersigned acknowledges that Sheridan Road Capital LLC will receive 7% of the proceeds of all Series A Preferred Shares sold by them in the Offering.

                              (b)     Subscription payments should be made payable to “Butler International, Inc.,” and should be delivered, together with two executed and properly completed copies of this Agreement. If the subscription is not accepted in whole or in part by the Company, the full or ratable amount, as the case may be, of any subscription payment received will be promptly refunded to the subscriber without deduction therefrom or interest thereon.

                              (c)     If this subscription is accepted by the Company, in whole or in part, and subject to the conditions set forth in Section 2 of this Agreement, the Company shall deliver to the undersigned the Shares subscribed for hereby, dated the date of the Closing, and a fully executed copy of this Agreement.

                              (d)     The undersigned may not withdraw this subscription or any amount paid pursuant thereto except as otherwise provided below.

                              (e)     If any other purchaser in the Offering obtains more favorable terms from the Company than those obtained by the undersigned, the Company hereby agrees to amend the relevant documents to provide the same terms to the undersigned.

                              (f)     If and when a closing of the Offering (“Closing”) occurs, the Company will issue to the undersigned Warrants for the purchase of 250 shares of common stock of the Company, par value $.001 per share (“Common Stock”), for every Series A Preferred Share purchased by the undersigned. The Company will issue to the undersigned additional Warrants for the purchase of 150 shares of Common Stock for every Series A Preferred Share



purchased by the undersigned if, but only if, (i) the Closing occurs, and (ii) the Company fails to replace General Electric Capital Corporation (“GECC”) with another senior creditor no later than June 30, 2007.

                    2.      Conditions. It is understood and agreed that this subscription is made subject to the terms and conditions set forth in the Escrow Agreement with Stewart Title Company, along with the Conditions to Escrow Agreement, both of even date herewith.

                    3.      Representations and Warranties of the Company. The Company represents and warrants to, and agrees with the undersigned as follows, in each case as of the date hereof and in all material respects as of the date of the Closing except for any changes resulting solely from the Offering:

                              (a)     The Company is duly organized, validly existing and in good standing under the laws of its state of incorporation with full power and authority to own, lease, license and use its properties and assets and to carry out the business in which it is engaged. The Company is duly qualified to transact the business in which it is engaged and is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing or use of property or assets or the conduct of its business makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company. The Company shall use the net proceeds from this Offering for general corporate purposes. The Company may use a portion of the net proceeds to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies, although the Company has no binding agreements to do so.

                              (b)      At the date of the Closing, the authorized capital stock of the Company will consist of 125,000,000 shares of Common Stock, par value $0.001 per share, 11,913,124 shares of which are issued and outstanding immediately prior to the closing and 15,000,000 shares of Preferred Stock, par value $.001 per share of which 15,000 shares have been designated Series A Preferred Shares, none of which are issued and outstanding immediately prior to the closing, and of which 7,200,000 have been designated Series B Cumulative Convertible Preferred Stock, 6,227,470 of which are issued and outstanding immediately prior to the closing (together, “Preferred Stock”). Each outstanding share of Common Stock is validly authorized, validly issued, fully paid and nonassessable, without any personal liability attaching to the ownership thereof and has not been issued and is not owned or held in violation of any preemptive rights of stockholders.

                              (c)     The Company has all requisite power and authority to (i) execute, deliver and perform its obligations under each of (A) this Agreement, (B) the Registration Rights Agreement, and (C) the Warrant (collectively, the “Documents”) and (ii) to issue and sell the Shares. All necessary corporate proceedings of the Company have been or will be duly taken to authorize the execution, delivery, and performance of the Documents, the issuance and sale of the Shares, and the filing of any documents requiring filing by any federal or state securities or other regulatory authority. Each Document has been or will be duly authorized by the Company and, when executed and delivered by the Company will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms

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(assuming due authorization and execution of the Documents by any other necessary parties thereto).

                              (d)     No consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any federal, state, local or other governmental authority, or any court or any other tribunal, is required by the Company for the execution, delivery or performance by the Company of the Documents or the issuance and sale of the Shares (except such filings and consents as may be required and have been or at the Closing will have been made or obtained under federal and state securities laws).

                              (e)     No consent of any party to any contract, agreement, instrument, lease, license, arrangement or understanding to which the Company is a party or to which any of properties or assets are subject (the “Contracts”) is required for the execution, delivery or performance by the Company of any of the Documents or the issuance and sale of the Shares. The execution, delivery and performance of the Documents and the issuance and sale of the Shares will not trigger anti-dilution adjustments to any of the Company’s outstanding securities under the Company’s Articles of Incorporation or any agreement to which the Company is a party or otherwise.

                              (f)     The execution, delivery and performance of the Documents and the issuance and sale of the Shares will not violate or result in a breach of, or entitle any party (with or without the giving of notice or the passage of time or both) to terminate or call a default under any Contract or violate or result in a breach of any term of the Articles of Incorporation or by-laws of, or violate any law, rule, regulation, order, judgment or decree binding upon, the Company or to which any of its operations, businesses, properties or assets are subject, the breach, termination or violation of which, or default under which, would have a material adverse effect on the operations, business, properties or assets of the Company.

                              (g)     The Company has filed all documents and other reports, including Current Reports on Form 8-K, required to be filed by it pursuant to the U.S. securities laws, except for the Form 10-K for the fiscal year ended December 31, 2005, and Form 10-Q’s for the quarters ended September 31, 2005, March 31, 2006, June 30, 2006, and September 30, 2006.

                    3.      Representations, Warranties and Covenants of the Subscriber. The undersigned hereby represents and warrants to, and agrees with, the Company as follows:

                              (a)     The undersigned is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”). Specifically the undersigned is (check appropriate items(s)):

                              ___    (i)     A bank as defined in Section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Act; an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small

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Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

                              ___    (ii)     A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

                              ___    (iii)    An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

                              ___    (iv)    A director or executive officer of the Company.

                              ___    (v)     A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds $1,000,000. (California and Massachusetts residents: please see Section 4(b) below.)

                              ___    (vi)    A natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year. (California and Massachusetts residents: please see Section 4(b) below.)

                              ___    (vii)   A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) (i.e., a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment).

                              ___    (viii)  An entity in which all of the equity owners are accredited investors. (If this alternative is checked, the undersigned must identify each equity owner and provide statements signed by each demonstrating how each is qualified as an accredited investor.)

                              (b)     For California and Massachusetts individuals: If the subscriber is a California resident, such subscriber’s investment in the Company will not exceed 10% of such subscriber’s net worth (or joint net worth with his spouse). If the subscriber is a Massachusetts resident, such subscriber’s investment in the Company will not exceed 25% of such subscriber’s joint net worth with his spouse (exclusive of principal residence and its furnishings).

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                              (c)     If a natural person, the undersigned is: a bona fide resident of the State contained in the address set forth on the signature page of this Agreement as the under-signed’s home address; at least 21 years of age; and legally competent to execute this Subscription Agreement. If an entity, the undersigned is duly authorized to execute this Agreement and this Agreement constitutes the legal, valid and binding obligation of the undersigned enforceable against the undersigned in accordance with its terms.

                              (d)     The undersigned has received, read carefully and is familiar with the Documents and the Company’s Management Presentation, dated August 29, 2006 (collectively, the “Investment Documents”). The undersigned acknowledges that the Company’s Management Presentation is based on information as of the date thereof, and that the Company has no obligation to update such information. The undersigned further acknowledges that the Investment Documents are provided “as is” and without any representation or warranty of any kind whatsoever. Respecting the Company, the undersigned is familiar with the Company’s business, plans and financial condition, the terms of the Offering and any other matters relating to the Offering; the undersigned has received all materials which have been requested by the undersigned; has had a reasonable opportunity to ask questions of the Company and its representatives; and the Company has answered all inquiries that the undersigned or the undersigned’s representatives have put to it. The undersigned has had access to, and the opportunity to request, all additional information, including budgets, internal forecasts and unaudited financial information, necessary to verify the accuracy of the information set forth in the Investment Documents and any other materials furnished herewith, and has taken all the steps necessary to evaluate the merits and risks of an investment as proposed hereunder.

                              (e)     The undersigned or the undersigned’s purchaser representative has such knowledge and experience in finance, securities, investments and other business matters so as to be able to protect the interests of the undersigned in connection with this transaction, and the undersigned’s investment in the Company hereunder is not material when compared to the undersigned’s total financial capacity.

                              (f)     The undersigned understands the various risks of an investment in the Company as proposed herein and can afford to bear such risks, including, without limitation, the risks of losing the entire investment.

                              (g)     The undersigned has been advised by the Company that none of the Shares or the Warrants have been registered under the Act, that the Shares and the Warrants will be issued on the basis of the statutory exemption provided by Section 4(2) of the Act or Regulation D promulgated thereunder, or both, relating to transactions by an issuer not involving any public offering and under similar exemptions under certain state securities laws, that this transaction has not been reviewed by, passed on or submitted to any Federal or state agency or self-regulatory organization where an exemption is being relied upon, and that the Company’s reliance thereon is based in part upon the representations made by the undersigned in this Agreement. The undersigned acknowledges that the undersigned has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Act and the rules and regulations thereunder on the transfer of the Shares and the Warrants. In particular, the undersigned agrees that no sale, assignment or transfer of any of the Shares or Warrants shall be valid or effective, and the Company shall not be required to give any effect to such a sale,

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assignment or transfer, unless (i) the sale, assignment or transfer of such Shares or Warrants is registered under the Act, it being understood that neither the Shares nor the Warrants are currently registered for sale although the Company has agreed to so register the common stock underlying the Warrants as provided in this Agreement and the Registration Rights Agreement, or (ii) such Shares or Warrants are sold, assigned or transferred in accordance with all the requirements and limitations of Rule 144 under the Act, it being understood that Rule 144 is not available at the present time for the sale of the Shares or Warrants, or (iii) such sale, assignment or transfer is otherwise exempt from registration under the Act. The undersigned further understands that an opinion of counsel and other documents may be required to transfer the Shares or Warrants. The undersigned acknowledges that the Shares and Warrants shall be subject to a stop transfer order and the certificate or certificates evidencing any Shares and Warrants shall bear the following or a substantially similar legend or such other legend as may appear on the forms of Shares and Warrants and such other legends as may be required by state blue sky laws:

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and neither such securities nor any interest therein may be offered, sold, pledged, assigned or otherwise transferred unless a registration statement with respect thereto is effective under the Act and any applicable state securities laws.”

          Such legend shall be removed by the Corporation, upon the request of a holder, at such time as the restrictions on the transfer of the applicable security shall have terminated.

                              (h)     The undersigned will acquire the Shares and the Warrants for the undersigned’s own account (or for the joint account of the undersigned and the undersigned’s spouse either in joint tenancy, tenancy by the entirety or tenancy in common) for investment and not with a view to the sale or distribution thereof or the granting of any participation therein, and has no present intention of distributing or selling to others any of such interest or granting any participation therein.

                              (i)      It never has been represented, guaranteed or warranted by any broker, the Company, any of the officers, directors, stockholders, partners, employees or agents of either, or any other persons, whether expressly or by implication, that:

                                        (i)     the Company or the undersigned will realize any given percentage of profits and/or amount or type of consideration, profit or loss as a result of the Company’s activities or the undersigned’s investment in the Company;

                                        (ii)    the past performance or experience of the management of the Company, or of any other person, will in any way indicate the predictable results of the ownership of the Shares and Warrants or of the Company’s activities;

                                        (iii)   that the resources of the Company, including amounts raised pursuant to the Offering, will be adequate to sustain operations of the Company; or

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                                        (iv)   the Company can sustain its operations without future financings which may result in substantial dilution or total loss of the undersigned’s investment.

                              (j)     The undersigned has not received any information concerning this Offering other than the Investment Documents and is not relying on any other information provided to the undersigned or any representations made to the undersigned.

                              (k)     The undersigned is not subscribing for Shares or Warrants as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by a person other than a representative of the Company with which the undersigned had a pre-existing relationship in connection with investments generally.

                              (l)     The undersigned is not relying on the Company with respect to the tax and other economic considerations of an investment.

                              (m)     The undersigned understands that the net proceeds from all subscriptions paid and accepted pursuant to the Offering (after deduction for expenses of the Offering) will be used in all material respects for the purposes set forth in this Agreement.

                              (n)     Without limiting any of the undersigned’s other representations and warranties hereunder, the undersigned acknowledges that:

                                        (i)     the undersigned has reviewed and is aware of the risks of investing in the Offering;

                                        (ii)    no assurances have been given that the financial resources of the Company are sufficient to sustain operations; and

                                        (iii)   that additional debt or equity financing may be required, which may result in the undersigned’s equity position being substantially diluted or the undersigned incurring a total loss of his investment.

                              (o)     The undersigned acknowledges that audited financial statements for the fiscal year ended December 31, 2005 are not yet available, that unaudited financial statements for the quarters ended September 30, 2005, March 31, 2006, June 30, 2006, and September 30, 2006 are not yet available and that the undersigned has had the opportunity to ask questions concerning the audited and unaudited financial and other information provided to the undersigned.

                              (p)     The undersigned acknowledges that it is aware that the Company will be restating its annual and quarterly financial statements beginning with the financial statements contained in its annual report on Form 10-K for the year ended December 31, 2004, which includes financial statements for fiscal years 2002, 2003 and 2004.

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                              (q)     The undersigned acknowledges that the representations, warranties and agreements made by the undersigned herein shall survive the execution and delivery of this Agreement and the purchase of the Shares.

                              (r)     The undersigned has consulted his own financial, legal and tax advisors with respect to the economic, legal and tax consequences of an investment in the Shares and Warrants and has not relied on the Investment Documents or the Company, its officers, directors or professional advisors for advice as to such consequences.

                    4.       Indemnification. The undersigned acknowledges that the undersigned understands the meaning and legal consequences of the representations and warranties contained in Section 4 hereof, and agrees to indemnify and hold harmless the Company, its partners, and each incorporator, officer, director, partner, employee, agent and controlling person of each thereof, past, present or future, from and against any and all loss (including reasonable attorneys fees), damage or liability due to or arising out of a breach of any such representation or warranty.

                    5.       Transferability. Neither this Agreement, nor any interest of the undersigned herein, shall be assignable or transferable by the undersigned in whole or in part except by operation of law. Any attempt to assign or transfer this Agreement or any interest therein other than by operation of law shall be void.

                    6.       Miscellaneous.

                              (a)     This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements among them concerning such subject matter, and may be modified only by a written instrument duly executed by the party to be charged.

                              (b)     Except as otherwise specifically provided herein, any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, or by FedEx, Express Mail or similar overnight delivery or courier service or delivered (in person or by telecopy, telex or similar telecommunications equipment) against receipt to the party to whom it is to be given, (i) if to the Company, at the address set forth on the first page hereof, (ii) if to the undersigned, at the address set forth on the signature page hereof, or (iii) in either case, to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 6(b). Notice to the estate of any party shall be sufficient if addressed to the party as provided in this Section 6(b). Any notice or other communication given by certified mail shall be deemed given at the time of receipt thereof. Any notice given by other means permitted by this Section 6(b) shall be deemed given at the time of receipt thereof.

                              (c)     This Agreement shall be binding upon and inure to the benefit of the parties hereto, the successors and assigns of the Company, and the permitted successors, assigns, heirs and personal representatives of the undersigned (including permitted transferees of the Shares and Warrants).

                              (d)     The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement.

-8-



                              (e)     This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

                              (f)     This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without giving effect to principles governing conflicts of law.

                              (g)     This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement (except as provided in Sections 6, and 7(c) and 7(g)).

                              (h)     If the Company shall prevail in any litigation, arbitration, or mediation relating to this Agreement, the undersigned shall reimburse the Company for its legal fees, costs and expenses arising from such litigation, arbitration or mediation.

                              (i)     The parties hereto irrevocably consent to the jurisdiction of the courts of the State of Maryland and of any federal court located in such State in connection with any action or proceeding arising out of or relating to this Agreement, any document or instrument delivered pursuant to, in connection with or simultaneously with this Agreement, or a breach of this Agreement or any such document or instrument. In any such action or proceeding, each party hereto waives personal service of any summons, complaint or other process and agrees that service thereof may be made in accordance with Section 8(b). Within 30 days after such service, or such other time as may be mutually agreed upon in writing by the attorneys for the parties to such action or proceeding, the party so served shall appear or answer such summons, complaint or other process.

                              (j)     At the Closing, the Company shall reimburse the Investor for its reasonable legal expenses incurred in the negotiation of the terms hereof, not to exceed $20,000. Such reimbursement may be effected by offset to the Purchase Price.

-9-



          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year this subscription has been accepted by the Company as set forth below.

 

 

 

 

 

 

Number of Shares

 

 

 

 

 

Being Purchased

 


 

 

 


 

 

 

 

 

 

 

 

 

 

 

Number of Warrants

 

By: 

 

 

 

 

 

 



 

 

(Signature of Subscriber or
Authorized Signatory)

 

 

 

 

 

 

 

 

 

Social Security Number or other
Taxpayer Identification Number:

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Address: 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

If the Shares and Warrants will be held as joint tenants, tenants in common, or community property, please complete the following:

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Print name of spouse or other co-subscriber

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Signature of spouse or other co-subscriber

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Print manner in which Shares and Warrants will be held

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

Social Security Number

[

-10-



ACCEPTED BY:
BUTLER INTERNATIONAL, INC.

 

 

By: 

 

 


   Name:

   Title:

Date: ____________, 2006

-11-



[Individuals]

 

 

 

STATE OF

)

 

 

)

ss.:

COUNTY OF

)

 

          On the ______ day of __________, 2006, before me personally came __________________________ and ________________, to me known, and known to me to be the person(s) described in and who executed the foregoing instrument, and s/he/they acknowledged to me that s/he/they executed the same.

 

 

 


 

Notary Public

[Corporations]

 

 

 

STATE OF

)

 

 

)

ss.:

COUNTY OF

)

 

          On the ______ day of ___________, 2006, before me personally came ___________, to me known, who, being by me duly sworn, did depose and say that s/he resides in _____________________________ that s/he is the _____________ of ________________________________________, the corporation described in and which executed the above instrument; and that s/he signed his/her name thereto by order of the board of directors of said corporation.

 

 

 


 

Notary Public

-12-



[Partnerships]

 

 

 

STATE OF

)

 

 

)

ss.:

COUNTY OF

)

 

          On the ______ day of _____________, 2006, before me personally came ________________________, to me known, and known to me to be the person who executed the foregoing instrument, and who, being duly sworn by me, did depose and say that s/he is a general partner of _____________________, that s/he executed the foregoing instrument in such partnership’s name, and that s/he had authority to sign the same, and s/he acknowledged to me that s/he executed the same as the act and deed of said partnership for the uses and purposes therein mentioned.

 

 

 


 

Notary Public

-13-


EX-99.1 12 d70210_ex99-1.htm PRESS RELEASE

 

 

(BUTLER INTERNATIONAL INC. LOGO)

NEWS


 

 

 

FOR IMMEDIATE RELEASE

CONTACT:

Mark Koscinski

December 21, 2006

 

(201) 476-5421

BUTLER INTERNATIONAL ANNOUNCES RAISE OF $8,500,000 OF PREFERRED EQUITY
AND EXTENSION FROM ITS SENIOR LENDER

MONTVALE, NJ . . . Butler International, Inc. (PK:BUTL) announced today that it had closed on the private placement of $8,500,000 of a new issuance of non-convertible Series A 7% Preferred Stock. Warrants to purchase 2,125,000 shares were also issued in connection with the issuance of the Series A 7% Preferred Stock. The warrants are exercisable at $2.00 per share, and are callable under certain conditions.

Purchasers of the newly issued shares and warrants, included the Company’s Chief Executive Officer, Edward M. Kopko and certain principal stockholders, as well as both institutional and non-institutional investors. Sheridan Road Capital acted as financial advisor to the Company and as placement agent in connection with certain institutional sales. The terms of the issuances of the shares and warrants were reviewed and recommended by an independent committee of the board of directors and unanimously approved by the Company’s disinterested directors after reviewing other financing options. The proceeds of the offering were used to repay a portion of the term loans from GECC and the remainder will be used for other general corporate purposes.

The Company also announced that it had entered into an agreement with General Electric Capital Corporation to extend the due date on its senior credit facility to June 30, 2007. GECC also agreed to waive certain conditions in the Company’s loan facility, including a requirement to sell the Company’s headquarters facility in Montvale, New Jersey. However, the Company is continuing its discussions with interested buyers.

The Company noted the new extension from GECC had many beneficial aspects, including the decrease of the interest rate charged under its credit facility, saving approximately $1.7 million in interest expense on an annual basis before accounting for the non-cash amortization of the warrants. Under the terms of the extension, the Company used $6 million of the proceeds to repay a portion of its outstanding term loans with GECC. The Company further stated with this repayment and the issuance of the preferred stock, the Company continues to strengthen its balance sheet and financial condition. In the twenty-nine months since August 2004, the Company has repaid $19 million or 56% of the $34 million in term loans outstanding at July 31, 2004 leaving a remaining balance of $15 million.

The shares and warrants sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws, and may not be offered or sold in the United States without being registered with the Securities and Exchange Commission (“SEC”) or through an applicable exemption from SEC registration requirements. The shares and warrants were offered and sold only to accredited investors. The Company has agreed to file a registration statement with the SEC covering the resale of the common stock underlying the warrants issued in the private placement.

This news release is not an offer to sell or the solicitation of an offer to buy the shares of the Company.

About Butler International

Butler International, Inc. is a leading provider of TechOutsourcing services, helping customers worldwide increase performance and savings. Butler’s global services model provides clients with onsite, offsite, or offshore service delivery options customized appropriately to their unique objectives. During its 60-year history of providing services, Butler has served many prestigious companies in industries including aircraft, aerospace, defense, telecommunications, financial services, heavy equipment, manufacturing, and more. If you would like to find out more about Butler’s value-added global services, visit us on the web at http://www.butler.com.

Information contained in this press release, other than historical information, may be considered forward-looking in nature as such it is based upon certain assumptions and is subject to various risks and uncertainties, which may not be controllable by the Company. To the extent that these assumptions prove to be incorrect, or should any of these risks or uncertainties materialize, the actual results may vary materially from those that were anticipated.

Mindpower for a Changing WorldSM
New River Center, 200 E. Las Olas Blvd., Ft. Lauderdale, FL 33315
www.butler.com


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