Document:

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT

            
            This Amendment No. 1, dated as of April 25, 2008
            (“Amendment No.1”) to
            the Registration Rights Agreement (the “Registration
            Rights Agreement”) dated as of January 3, 2008, by and
            among Pharmos Corporation, a Nevada corporation (the
            “Company”), and the
            purchasers signatory hereto (each a
            “Purchaser” and
            collectively, the
            “Purchasers”).

            
            The Company and the Purchasers hereby agree as follows:

            
            1. Capitalized terms used and not otherwise defined herein that are
            defined in the Registration Rights Agreement shall have the meanings given such terms
            in the Registration Rights Agreement.

            
            2. The definition of “Effectiveness Date” as it appears in
            the Registration Rights Agreement is deleted and replaced in its entirety by the
            following:

            
            “
            “Effectiveness
            Date” means, with respect to the Registration Statement
            required to be filed hereunder, the earlier of (a) December 31, 2008 or (b) the fifth
            Business Day following the date on which the Company is notified by the Commission that
            the Registration Statement will not be reviewed or is no longer subject to further
            review and comments.”

             

            
            3. Section 2(c) is revised to provide that liquidated damages shall be
            payable by the Company if the Registration Statement is not declared effective by the
            Commission on or before December 31, 2008, rather than six months after the Closing
            Date, as originally was provided in the Registration Rights Agreement. Accordingly,
            Section 2(c) is deleted and replaced in its entirety by the following:

             

            
            “(c)    If: (i) a
            Registration Statement filed or required to be filed hereunder is not declared
            effective by the Commission on or before December 31, 2008, or (ii) after a
            Registration Statement is first declared effective by the Commission, it ceases for any
            reason to remain continuously effective as to all Registrable Securities for which it
            is required to be effective, or the Holders are not permitted to utilize the Prospectus
            therein to resell such Registrable Securities, for in any such cases fifteen Trading
            Days (which need not be consecutive days) in the aggregate during any 12-month period
            (any such failure or breach being referred to as an “Event,” and for
            purposes of clause (i) the date on which such Event occurs, or for purposes of clause
            (ii) the date on which such fifteen Trading Day period is exceeded being referred to as
            “Event Date”), then in addition to any other rights the Holders may have
            hereunder or under applicable law: (x) on each such Event Date the Company shall pay to
            each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 1%
            of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
            for any Debentures then held by such Holder; and (y) on each monthly anniversary of
            each such Event Date (if the applicable Event shall not have been cured by such date)
            until the applicable Event is cured, the Company shall pay to each Holder an amount in
            cash, as liquidated damages and not as a penalty, equal to 1% of the aggregate purchase
            price paid by such Holder pursuant to the Purchase Agreement for any Debentures then
            held by such Holder; provided, however, liquidated damages payable to any Holder
            hereunder shall not exceed 25% of the aggregate purchase price paid by such Holder
            pursuant to the Purchase Agreement for the Debentures issued to such
            Holder.”

            
             

            
            4.   Except as otherwise set forth herein, the Registration
            Rights Agreement shall remain in full force and effect.

            
            5.  This Agreement may be executed in any number of counterparts,
            each of which when so executed shall be deemed to be an original and, all of which
            taken together shall constitute one and the

             

            
            

            

             

            
            same Agreement. In the event that any signature is delivered by
            facsimile transmission, such signature shall create a valid binding obligation of the
            party executing (or on whose behalf such signature is executed) the same with the same
            force and effect as if such facsimile signature were the original thereof.

            
            IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
            the Registration Rights Agreement as of the date first written above.

            
            PHARMOS CORPORATION

             

            
            By: _____________________________________

            
                	
                            
                             

                        	
                            
                            Name:

                        	
                            
                            S. Colin Neill

                        

            

            
                	
                            
                             

                        	
                            
                            Title:

                        	
                            
                            President and Chief Financial Officer

                        

            

             

             

            
            NEW ENTERPRISE ASSOCIATES 10, LIMITED PARTNERSHIP

             

            By:
            NEA PARTNERS 10, LIMITED PARTNERSHIP, its General Partner

             

            
            By:___________________________

            
            A General Partner

            
             

            
            ___________________________

            
            Lloyd I. Miller, III

             

            
            ___________________________

            
            Robert F. Johnston

             

            
            VENROCK ASSOCIATES

             

            
            By:___________________________

            
                	
                            
                             

                        	
                            
                            Anthony B. Evnin,

                        

            

            
                	
                             

                        	
                            General
                            Partner

                        

            

             

            
            VENROCK ASSOCIATES III, L.P.

             

            By:
            Venrock Management III LLC

            
                	
                            
                             

                        	
                            
                            Its: General Partner

                        

            

             

            
                	
                            
                             

                        	
                            
                            By:___________________________

                        

            

            
                	
                            
                             

                        	
                            
                            Anthony B. Evnin,

                        

            

            
                	
                             

                        	
                            
                            Member

                        

            

             

            
            VENROCK ENTREPRENEURS FUND III, L.P.

             

            By:
            VEF Management III LLC

            
                	
                            
                             

                        	
                            
                            Its: General Partner

                        

            

             

            
                	
                            
                             

                        	
                            
                            By:___________________________

                        

            

            
                	
                            
                             

                        	
                            
                            Anthony B. Evnin,

                        

            

            
                	
                            
                             

                        	
                            
                            Member

                        

            

             

             

            
            2Execution
            Copy

            FOURTH
            AMENDMENT TO

            THIRD AMENDED AND RESTATED CREDIT AGREEMENT

            
                                FOURTH
            AMENDMENT, dated as of April 28, 2008 to the Credit Agreement referred to below (this
            “Amendment”), by and among BUTLER SERVICE GROUP, INC., a New Jersey
            corporation, as the Borrower (the “Borrower”), the other Credit
            Parties signatory hereto, GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
            for itself, as Lender, and as Agent for Lenders (in such capacity, the
            “Agent”) and the other Lenders signatory hereto.

            W I
            T N E S S E T H:

            
                                WHEREAS,
            the Borrower, the other Credit Parties signatory thereto, Agent, and Lenders signatory
            thereto are parties to that certain Third Amended and Restated Credit Agreement, dated
            as of August 29, 2007, as amended on February 1, 2008, as further amended on February
            28, 2008 and as further amended on April

            14, 2008 (including, all annexes, exhibits and schedules thereto, and as amended,
            supplemented or otherwise modified from time to time prior to the date hereof, the
            “Credit Agreement”); 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.          
            Amendment to Credit Agreement. Annex A of the Credit Agreement is hereby
            amended as of the date hereof by deleting the language “April 28, 2008” in
            clause (a) of the definition of “Commitment Termination Date”
            and substituting in lieu thereof the language “May 12, 2008”.

            
                        
                    3.          
            Payment of Default Rate. The Borrower and the other Credit Parties acknowledge
            and agree that Agent provided notice to the Borrower that, commencing on January 3,
            2008, all outstanding Obligations bore interest at the Default Rate in accordance with
            Section 1.5(d) of the Credit Agreement through the date hereof, all of which
            interest shall be due and payable in cash on the Commitment Termination Date;
            provided, that the Default Rate interest due on the date hereof shall be
            waived if the Borrower pays in full in cash on the Commitment Termination Date all then
            outstanding Obligations (including, without limitation, cash collateralizing all
            outstanding Letters of Credit in accordance with the terms of Section 1.2 and
            Annex B, clause (c) of the Credit Agreement), together with interest, fees,
            expenses, attorneys fees and any other charges hereafter accruing through the date of
            payment, under the Loan Documents; provided, further, that to the extent
            all outstanding Obligations are not paid in full

            

            

            

            As of April 28, 2008

            Page 2 of 7

            on or prior to the Commitment
            Termination Date, all outstanding Obligations shall continue to bear interest at the
            Default Rate until such Obligations are paid in full.

            
                         
               4.          
            Representations and Warranties. To induce Agent and Lenders to enter into this
            Amendment, each of the Borrower and Credit Parties make the following representations
            and warranties to Agent and Lenders:

            
                         
                        
                 (a)          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 the 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.

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

            
                                            (c)            Each
            of this Amendment and the Amended Credit Agreement constitutes a legal, valid and
            binding obligation of the 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).

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

            
                       
                                (e)          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 the 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.

            

            

            

            As of April 28, 2008

            Page 3 of 7

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

            
                            
                5.          
            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.

            
                      
                      6.          
            Outstanding Indebtedness; Waiver of Claims. Each of the Borrower and the other
            Credit Parties hereby acknowledges and agrees that as of April 28, 2008, the aggregate
            outstanding principal amount of the Revolving Loan is $ 37,094,321.77 and the aggregate
            outstanding Letters of Credit Obligations is $3,395,844.80, and that such principal
            amounts are payable pursuant to the Credit Agreement without defense, offset,
            withholding, counterclaim or deduction of any kind. The 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 the 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 the 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.

            
                           
                 7.          
            Expenses. The 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.

            
                                8.          
            Effectiveness. This Amendment shall be deemed effective as of the date hereof
            only upon satisfaction in full in the judgment of Agent of each of the following
            conditions:

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

            

            

            

            As of April 28, 2008

            Page 4 of 7

            
                      
                         
                    (b)          
            Payment of Fees and Expenses. The Borrower shall have paid to Agent all
            documented costs, fees and expenses owing to Agent (including, without limitation, all
            reasonable legal fees and expenses).

            
                                             (c)          
            Representations and Warranties. The representations and warranties of or on
            behalf of the Borrower and the Credit Parties in this Amendment shall be true and
            correct on and as of 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.

            
                                   9.          
            GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED

            BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

            
                        
                    10.       
            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]

            

            

            

            As of April 28, 2008

            Page 5 of 7

            
                                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/ Mark
                        Koscinski

                    
	
                         

                    	
                         

                    	
                        

                    
	
                         

                    	
                        Name:

                    	
                        Mark
                        Koscinski

                    
	
                         

                    	
                        Title:

                    	
                        SVP, CFO

                    

            

            

            

            

            As of April 28, 2008

            Page 6 of 7

            	
                         

                    	
                         

                    	
                         

                    
	
                         

                    	
                        GENERAL ELECTRIC
                        CAPITAL

                    
	
                         

                    	
                        CORPORATION,
                        as Agent and Lender

                    
	
                    	
                    	
                    
	
                         

                    	
                    	
                    
	
                         

                    	
                        By:

                    	
                        /s/ James H.
                        Kaufman

                    
	
                         

                    	
                         

                    	
                        

                    
	
                         

                    	
                        Name:

                    	
                        James H.
                        Kaufman

                    
	
                         

                    	
                        Title:

                    	
                        Duly Authorized
                        Signatory

                    

            

            

            

            

            As of April 28, 2008

            Page 7 of 7

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

            BUTLER INTERNATIONAL,
            INC.

            BUTLER SERVICES INTERNATIONAL, INC.

            BUTLER TELECOM, INC.

            BUTLER PUBLISHING, INC.

            BUTLER OF NEW JERSEY REALTY CORP.

            BUTLER SERVICES, INC.

            BUTLER UTILITY SERVICE, INC.

            	
                         

                    	
                         

                    	
                         

                    
	
                        By:

                    	
                        /s/ Mark
                        Koscinski

                    	
                         

                    
	
                         

                    	
                        

                    	
                         

                    
	
                        Name:

                    	
                        Mark
                        Koscinski

                    	
                         

                    
	
                        Title:

                    	
                        SVP, CFO

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