EXHIBIT 10.5

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

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

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

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

          1.       Definitions. As used herein:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          7.       No Dilution or Impairment.

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

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

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

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

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

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

 

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

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

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

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

          11.     Voting Rights; Information; Notice of Transactions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

BUTLER INTERNATIONAL, INC.

 

 

 

By:

 

 

 

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EXHIBIT A
NOTICE OF EXERCISE

 

 

 

 

To:

BUTLER INTERNATIONAL, INC. (the “Corporation”)

 

 

 

 

 

1.

The undersigned hereby:

 

 

 

 

 

 

o

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

 

 

 

 

 

 

o

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

 

 

 

 

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

 

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(Name)

 

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(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.

 

 

 

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      (Signature)

 

 

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(Date)

 

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