Document:

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.

- 2 -

          “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

- 3 -

“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

- 4 -

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. 

- 6 -

          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.

- 7 -

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; 

- 8 -

                              (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

- 9 -

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

- 10 -

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

- 11 -

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 

- 12 -

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 

- 13 -

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

- 14 -

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

- 15 -

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). 

- 16 -

                    (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 

- 17 -

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), 

- 18 -

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.

- 19 -

          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]

- 20 -

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:

	
 

	
 

	

- 21 -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 

- 2 -

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 

- 3 -

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 

- 4 -

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 

- 5 -

	
 

	
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 

- 6 -

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. 

- 7 -

          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. 

- 8 -

          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: 

	
 

	

- 9 -

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)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]