Exhibit 10.5
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND NEITHER THESE SECURITIES NOR ANY INTEREST
THEREIN MAY BE TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF WITHOUT
REGISTRATION UNDER THAT ACT OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
 
ISSUE DATE: _________________
 
WARRANT TO PURCHASE COMMON STOCK
of
THWAPR, INC.
a Delaware corporation
 
This certifies that for value received ______________, or his permitted
registered assigns ("Holder"), is entitled, subject to the terms set forth
below, to purchase from THWAPR, INC., a Delaware corporation (the "Company"), up
to _____________ (______) shares of the common stock of the Company ("Common
Stock") at the price of ____ Dollar ($____) per share (the "Purchase Price"),
upon surrender of this Warrant at the principal office of the Company referred
to below, with the subscription form attached hereto (the "Subscription Form")
duly executed, and simultaneous payment therefor in the manner specified in
Section 1 hereof. The Purchase Price and the number of shares of Common Stock
purchasable hereunder (the "Warrant Shares") are subject to adjustment as
provided in Section 3 of this Warrant.
 
As used herein, (i) "Exercise Date shall mean the particular date (or dates) on
which this Warrant is exercised, (ii) "Issue Date" shall mean the date of this
Warrant reflected above, (iii) "Warrant" shall include this Warrant and any
warrant delivered in substitution or exchange therefor as provided herein and
(iv) "Warrant Shares" shall mean any shares of Common Stock acquired by Holder
upon exercise of this Warrant
 
1.  Expiration.  This warrant shall expire five years from the date of issue as
noted above.
 
2. Exercise.
 
(a) This Warrant may be exercised, in whole or in part, at any time or from time
to time, on any business day, for all or any part of the number of shares of
Common Stock called for hereby, by surrendering it at the principal office of
the Company, 220 12th Avenue, New York, NY 10001 together with a completed and
executed Subscription Form, together with delivery of a certified or cashier's
check in an amount equal to (i) the number of shares of Common Stock being
purchased, multiplied by (ii) the Purchase Price. Notwithstanding the foregoing,
in the event of the closing of the Company's sale or transfer of all or
substantially all of its assets, or the closing of the acquisition of the
Company by another entity by means of merger, consolidation or other transaction
or series of related transactions, resulting in the exchange of the outstanding
shares of the Company's capital stock such that the stockholders of the Company
prior to such transaction own, directly or indirectly, less the 50% of the
voting power of the surviving entity (an "Acquisition"), this Warrant shall, on
the date of such event, no longer be exercisable and become null and void. In
the event of a proposed transaction of the kind described above, the Company
shall use its best efforts to notify the holder of the Warrant at least thirty
(30) days prior to the consummation of such event or transaction.
 
 
1

--------------------------------------------------------------------------------

 
 
(b) This Warrant may be exercised for less than the full number of shares as of
the Exercise Date. Upon such partial exercise, this Warrant shall be
surrendered, and a new Warrant of the same tenor and for the purchase of the
Warrant Shares not purchased upon such exercise shall be issued to Holder by the
Company.
 
(c) A Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided above,
and the person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As soon as practicable on or
after such date, and in any event within five (5) business days thereafter, the
Company shall issue and deliver to the person or persons entitled to receive the
same a certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash, in lieu of any fraction of a
share, equal to such fraction of the current fair market value of one full share
as reasonably determined in good faith by the Company's Board of Directors (the
"Board").
 
3. Payment of Taxes.   All shares of Common Stock issued upon the exercise of a
Warrant shall be validly issued, fully paid and non-assessable and the Company
shall pay all taxes and other governmental charges that may be imposed in
respect of the issue or delivery thereof, other than any tax or other charge
imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock in any name other than that of the registered Holder
of the Warrant surrendered in connection with the purchase of such shares, and
in such case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the Company's satisfaction that no tax or other charge is due.
 
4. Certain Adjustments.
 
(a) Automatic Adjustment. Any Company adjustment in the nature of a stock
dividend, stock split (e.g. splits) rights generally, reclassification,
Extraordinary Dividend or Distribution or other event which adjusts the number
of authorized and/or issued Common Shares or adds value to the shares (herein of
dividends in cash, or property) shall accrue proportionately to the benefit of
the Holder and the Common Shares callable by the same as provided herein as if,
mutatis mutandis, each had exercised the Warrant and held Warrant Shares, plus
all prior accretion, from the date of Warrant issuances to the date, or dates,
this paragraph is triggered. For the avoidance of doubt, a two for one common
stock split, or a 100% stock dividend doubles the number of Warrant Shares
obtainable upon Warrant exercise; a $10 cash dividend on each share of Common
Stock means, on subsequent exercise, the Company issues the Holder $10 (without
interest, for purposes of simplicity) per Warrant Share; an opportunity extended
to Common shareholders to participate in a favorable arrangement … e.g. a
so-called pre-emptive (including rights offering) or tag along rights .. shall
be extended contemporaneously to the Holders on an as-if exercisable basis.
 
 
2

--------------------------------------------------------------------------------

 
 
(b) Adjustment for Reorganization, Consolidation, Merger. In case of any
reclassification or change of outstanding Company securities or of any
reorganization of the Company (or any other corporation the stock or securities
of which are at the time receivable upon the exercise of this Warrant) or any
similar corporate reorganization on or after the date hereof, then and in each
such case the Holder, upon the exercise hereof at any time after the
consummation of such reclassification, change, reorganization, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property to which the Holder
would have been entitled upon such consummation if the Holder had exercised this
Warrant immediately prior thereto, all subject to further adjustment as provided
in paragraph (a); and in each such case, the terms of this Section 3 shall be
applicable to the Company securities properly receivable upon the exercise of
this Warrant after such consummation.
 
(c) Adjustments for Dividends in Common Stock. In case at any time after the
Issue Date the Company shall declare any dividend on the Common Stock which is
payable in Common Stock, the number of Warrant Shares evidenced hereby shall be
proportionately increased and the Purchase Price shall be proportionately
decreased.
 
(d) Stock Split and Reverse Stock Split. If the Company at any time or from time
to time after the Issue Date effects a subdivision of the outstanding Common
Stock, the Purchase Price then in effect immediately before that subdivision
shall be proportionately decreased and the number of shares of Common Stock
theretofore receivable upon the exercise of this Warrant shall be
proportionately increased. If the Company at any time or from time to time after
the Issue Date combines the outstanding shares of Common Stock into a smaller
number of shares, the Purchase Price then in effect immediately before that
combination shall be proportionately increased and the number of shares of
Common Stock theretofore receivable upon the exercise of this Warrant shall be
proportionately decreased. Each adjustment under this Section 3(d) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
 
e) Accountants' Certificate as to Adjustment. In each case of an adjustment in
the shares of Common Stock receivable on the exercise of the Warrant, the
Company at its expense shall cause independent public accountants of recognized
standing selected by the Company (who may be the independent public accountants
then auditing the books of the Company) to compute such adjustment in accordance
with the terms of the Warrant and prepare a certificate setting forth such
adjustment and showing the facts upon which such adjustment is based. The
Company will forthwith mail a copy of each such certificate to each holder of a
Warrant at the time outstanding.

 
3

--------------------------------------------------------------------------------

 
 
In case any event shall occur as to which the provisions of Section 3 are not
strictly applicable, but the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principles of such section, then, in each such case, the
Company shall, at its expense, appoint a firm of independent public accountants
of recognized national standing (who may be the independent public accountants
regularly employed by the Company) to issue a report which shall determine the
adjustment, if any, on a basis consistent with the essential intent and
principles established in Section ___, necessary to preserve without dilution
the purchase rights represented by this Warrant. Upon receipt of such report,
the Company will promptly mail a copy thereof to the Holder and shall make the
adjustments described therein. If at any time conditions shall arise by reason
of action taken by the Company which in the reasonable opinion of the Board of
Directors are not adequately covered by the provisions hereof and which might
materially and adversely affect the rights of the Holder or if at any time any
such conditions are expected to arise by reason of any action contemplated by
the Company, the Board of Directors shall make adjustments, if any (not
inconsistent with the standards established in this Article II), of the Warrant
Price (including, if necessary, any adjustment as to the securities for which
the Warrants may thereafter be exercisable) and any distribution which is or
would be required to preserve the rights of the Holder.
 
(f) No Dilution or Impairment. Subject to the provisions of Section 1(a)(B), the
Company will not, by amendment of its restated articles of incorporation or
through reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of the Warrants, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holders of the Warrants against dilution or other impairment.
 
5. Notices of Record Date.   If the Company shall take a record of the holders
of its Common Stock (or other stock or securities at the time receivable upon
the exercise of the Warrants) for the purpose of entitling them to receive any
dividend or other distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right, or of any voluntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to each holder of a Warrant at the time outstanding a notice specifying,
as the case may be, (1) the date on which a record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (2) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such stock or
securities at the time receivable upon the exercise of the Warrants) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 30
days prior to the date therein specified.
 
 
4

--------------------------------------------------------------------------------

 
 
6. Registration Rights.  Subject to the approval of the Company's board of
directors, the Company shall take all actions necessary to grant to the Holder
with respect to the Warrant Shares the registration rights granted to "Future
Registrable Securities," as that term is defined in the First Amended
Registration Rights Agreement by and between the Company and its shareholders.
 
7. Restrictions on Transfer.  Neither this Warrant nor the Warrant Shares may be
assigned, disposed of, encumbered, or otherwise transferred (any such action, a
"Transfer"), except to an Affiliate (as that term is defined in Rule 405 as
promulgated under the Securities Act), or any officer of the Holder or its
Affiliates, or (ii) to any underwriter in connection with an effective
registration statement ("Registration Statement") filed under the Securities Act
used in connection with a public offering of the Company's common stock ("Public
Offering"), provided as to (ii) that this Warrant is exercised upon such
Transfer and the shares of Common Stock issued upon such exercise are sold by
such underwriter as part of such Public Offering and, as to both (i) and (ii),
only in accordance with and subject to the provisions of the Securities Act and
the rules and regulations promulgated thereunder. If at the time of a Transfer,
a Registration Statement is not in effect to register this Warrant or the
Warrant Shares, the Company may require the Holder to make such representations,
and may place such legends on certificates representing this Warrant, as may be
reasonably required in the opinion of counsel to the Company to permit a
Transfer without such registration.
 
8. No Rights as Shareholder.  Prior to the exercise of this Warrant, the Holder
shall not be entitled to any rights of a shareholder with respect to the Warrant
Shares, including without limitation the right to vote such Warrant Shares,
receive dividends or other distributions thereon, exercise preemptive rights or
be notified of stockholder meetings, and such Holder shall not be entitled to
any notice or other communication concerning the business or affairs of the
Company. However, nothing in this Section 8 shall limit the right of the holder
to be provided the notices required under this Warrant. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on such
Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the
Company or by creditors of the Company.
 
9. Compliance with Securities Act.  The Holder, by acceptance hereof, agrees
that this Warrant and the Warrant Shares to be issued upon exercise hereof are
being acquired for investment and not with a view towards resale and that it
will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares
to be issued upon exercise hereof except under circumstances which will not
result in a violation of the Securities Act. Upon exercise of this Warrant, the
holder hereof shall confirm in writing, in the form of Exhibit A, that the
Warrant Shares so purchased are being acquired for investment and not with a
view toward distribution or resale. This Warrant and all shares of Warrant
Shares issued upon exercise of this Warrant (unless registered under the
Securities Act) shall be stamped or imprinted with the legend indicated on the
first page of this Warrant.
 
10. Loss or Mutilation.  Upon receipt by the Company of evidence satisfactory to
it (in the exercise of reasonable discretion) of the ownership of and the loss,
theft, destruction or mutilation of any Warrant and (in the case of loss, theft
or destruction) of indemnity satisfactory to it (in the exercise of reasonable
discretion), and (in the case of mutilation) upon surrender and cancellation
thereof, the Company will execute and deliver in lieu thereof a new Warrant in
lieu of the lost or mutilated Warrant.
 
 
5

--------------------------------------------------------------------------------

 
 
11. Reservation of Common Stock.  The Company shall at all times reserve and
keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants.
 
12. Notices.  All notices and other communications from the Company to the
Holder of this Warrant shall be mailed by first-class registered or certified
mail, postage prepaid, to the address furnished to the Company by Holder.
 
13. Change; Waiver.  Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
 
14. Headings.  The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
 
15. Law Governing.  This Warrant shall be construed and enforced in accordance
with and governed by the internal laws, and not the law of conflicts, of
Delaware.
 
16.  Restrictions on Shares.  Upon exercise, the Holder of any shares of the
Company’s capital stock shall be subject to the same restrictions that may be
imposed on comparable shares of the same class of Company stock as imposed on
such shares pursuant to any merger, acquisition or other transaction giving rise
to such restrictions on transfer and/or hypothecation by the Holder of such
shares.
 
THWAPR, INC.
 
By: ______________________________________
 
_________________________________________
 
[Officer of Thwapr, Inc.]
 
ACCEPTED AND AGREED:
 
Warrant Holder
 
By: _____________________________________
 
Name: ______________________
 
 
6

--------------------------------------------------------------------------------

 
 
SUBSCRIPTION FORM
 
(To be executed only upon exercise of Warrant)
 
The undersigned registered owner of this Warrant irrevocably exercises this
Warrant and purchases ____________ of the number of shares of the Common Stock
of THWPRR, INC., a Delaware corporation, purchasable with this Warrant, and
herewith makes payment therefor, all at the price and on the terms and
conditions specified in this Warrant.
 
The undersigned hereby represents and warrants that the undersigned is acquiring
such shares for its own account for investment purposes only, and not for resale
or with a view to distribution of such shares or any part thereof.
 
By: ______________________________ Date: __________
 
Name:
 
Address:
 
7

--------------------------------------------------------------------------------

 
FORM OF ASSIGNMENT
 
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within Warrant, with respect to the number of shares
of Common Stock set forth below:
 
Name of Assignee
 
Address
 
# of Shares
           
  
 
  
 

 
and does hereby irrevocably constitute and appoint
____________________________________ as Attorney-in-Fact to make such transfer
on the books of THWAPR, INC., a Delaware corporation, maintained for the
purpose, with full power of substitution in the premises.
 
By: _________________________________ Date: __________
 
Name:
 
Address:
 
Witness: ____________________________________________
 
 
8

--------------------------------------------------------------------------------