EXHIBIT 10.5
_____ COMMON SHARES VOID AFTER
WITHOUT PAR VALUE JULY 31, 1999.
SHARE PURCHASE WARRANT
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DATAWAVE SYSTEMS INC.
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(the "Company")
This is to certify that, for value received, ______________________________
(the "Warrant Holder") of ________________________ has the right to purchase
from the Company, upon and subject to the terms and conditions hereinafter
referred to, ______ common shares without par value (the "Shares") in the
capital of the Company. The Shares may be purchased at a price of $0.31
(Canadian) per Share at any time up to 5:00 p.m. local time in Vancouver, B.C.
on July 31, 1999. The right to purchase the Shares may be exercised in whole
or in part, by the Warrant Holder only, at the price set forth above (the
"Exercise Price") within the time set forth above by:
(a) completing and executing the Subscription Form attached hereto for the
number of the Shares which the Warrant Holder wishes to purchase, in the
manner therein indicated;
(b) surrendering this Warrant Certificate, together with the complete
Subscription Form, to Montreal Trust Company of Canada, (the "Transfer
Agent") at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx; and
(c) paying the appropriate Exercise Price, in Canadian funds, for the number of
the Shares of the Company subscribed for, either by certified cheque or
bank draft (drawn on a Canadian Chartered Bank) or money order payable to
the Company in Vancouver, British Columbia.
Upon surrender and payment, the Company shall issue to the Warrant Holder or to
such other person or persons as the Warrant Holder may direct, the number of
the Shares subscribed for and will deliver to the Warrant Holder, at the address
set forth on the subscription form, a certificate or certificates evidencing the
number of the Shares subscribed for. If the Warrant Holder subscribes for a
number of Shares which is less than the number of Shares permitted by this
warrant, the Company shall forthwith cause to be delivered to the Warrant Holder
a further Warrant Certificate in respect of the balance of Shares referred to in
this Warrant Certificate not then being subscribed for.
In the event of any subdivision of the common shares of the Company (as such
common shares are constituted on the date hereof) into a greater number of
common shares while this warrant is outstanding, the number of Shares
represented by this warrant shall thereafter be deemed to be subdivided in like
manner and the Exercise Price adjusted accordingly, and any subscription by the
Warrant Holder for Shares hereunder shall be deemed to be a subscription for
common shares of the Company as subdivided.
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In the event of any consolidation of the common shares of the Company (as such
common shares are constituted on the date hereof) into a lesser number of common
shares while this warrant is outstanding, the number of Shares represented by
this warrant shall thereafter be deemed to be consolidated in like manner and
the Exercise Price adjusted accordingly, and any subscription by the Warrant
Holder for Shares hereunder shall be deemed to be a subscription for common
shares of the Company as consolidated.
In the event of any capital reorganization or reclassification of the common
shares of the Company or the merger or amalgamation of the Company with another
corporation at any time while this warrant is outstanding, the Company shall
thereafter deliver at the time of purchase of the Shares hereunder the number of
common shares the Warrant Holder would have been entitled to receive in respect
of the number of the Shares so purchased had the right to purchase been
exercised before such capital reorganization or reclassification of the common
shares of the Company or the merger or amalgamation of the Company with another
corporation.
In each case of any adjustment or readjustment in the common shares issuable on
the exercise of this Warrant, the Company at its expense will promptly cause its
Chief Financial Officer to compute such adjustment or readjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the fact upon which
such adjustment or readjustment is based, including a statement of the
consideration received or receivable by the Company for any additional common
shares issued or sold or deemed to have been issued or sold, the number of
common shares outstanding or deemed to be outstanding, and the Exercise Price
and the number of common shares to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or
readjusted as provided in this Warrant. The Company will forthwith mail a copy
of each such certificate to the holder of the Warrant and the Transfer Agent of
the Company, and the Company will, on the written request at the time of any
holder of the Warrant, furnish to such holder a like certificate setting forth
the Exercise Price at the time in effect and showing how it was calculated.
If at any time while this, or any replacement, warrant is outstanding:
(a) the Company proposes to pay any dividend of any kind upon its common shares
or make any distribution to the holders of its common shares;
(b) the Company proposes to offer for subscription pro rata to the holders of
its common shares any additional shares of stock of any class or other
rights;
(c) the Company proposes any capital reorganization or classification of its
common shares or the merger or amalgamation of the Company with another
corporation; or
(d) there is a voluntary or involuntary dissolution, liquidation or winding-up
of the Company;
The Company shall give to the Warrant Holder at least 21 days prior written
notice (the "Notice") of the date on which the books of the Company are to close
or a record is to be taken
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for such dividend, distribution or subscription rights, or for determining
rights to vote with respect to such reorganization, reclassification,
consolidation, merger, amalgamation, dissolution, liquidation or winding-up. The
Notice shall specify, in the case of any such dividend, distribution or
subscription rights, the date on which holders of common shares of the Company
will be entitled to exchange their common shares for securities or other
property deliverable upon any reorganization, reclassification, consolidation,
merger, amalgamation, sale, dissolution, liquidation or winding-up, as the case
may be. Each Notice shall be delivered by hand, addressed to the Warrant Holder
at the address of the Warrant Holder set forth above or at such other address as
the Warrant Holder may from time to time specify to the Company in writing.
The holding of this Warrant Certificate or the Warrants represented hereby does
not constitute the Warrant Holder a member of the Company.
Nothing contained herein confers any right upon the Warrant Holder or any other
person to subscribe for or purchase any Shares of the Company at any time
subsequent to 5:00 p.m. local time in Vancouver, B.C. on July 31, 1999 and from
and after such time, this Warrant and all rights hereunder will be void.
The Warrants represented by this Warrant Certificate are non-transferable. Any
common shares issued pursuant to this Warrant will bear the following legend:
"The shares represented by this certificate are subject to a hold period
expiring at midnight on October 22, 1997 and may not be traded in British
Columbia until the expiry of the hold period except as permitted by the
Securities Act (British Columbia) and regulations made under the Act."
AND
"This Warrant and the shares of Common Stock issuable upon exercise thereof
have not been registered under the United States Securities Act of 1933, as
amended or qualified under the laws of any state, and may not be sold,
offered for sale, pledged or hypothecated unless a registration statement
is in effect with respect to such securities under such Act and laws or
unless there is provided by the holder an opinion of a counsel or other
evidence reasonably satisfactory to the Company that such registration is
not required."
If the Company proposes to register (under the laws of the United States) any of
its common shares for sale to the public, whether for its own account or for the
account of other security holders or both, each such time it will give at least
45 days' prior written notice to the holder hereof of its intention so to do.
Upon the written request of the Warrant Holder, received by the Company within
30 days after the giving of any such notice by the Company, to register any of
the common stock owned or to be owned by the holder hereof pursuant to the
exercise of this Warrant, the Company will cause such common shares to be
covered by the registration statement proposed to be filed by the Company.
Notwithstanding the foregoing, the Company may withdraw any registration
statement without thereby incurring any liability to the Warrant Holder, except
as to expenses as set forth below.
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All expenses, including without limitation all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, the fees and disbursements of special counsel to
the Warrant Holder, fees and expenses incurred in connection with complying with
federal or state securities or "blue sky" laws, fees of the National Association
of Securities Dealers, Inc., fees and expenses of United States regulatory
authorities, transfer taxes, fees of transfer agents and registrars,
underwriting discounts, selling commissions and costs of insurance, will be paid
directly by the Company.
Prior to such offering, the Company and the Warrant Holder will cooperate with
each other and with accountants, counsel and underwriters to furnish and review
information, including financial information and drafts or preliminary printings
of the prospectus and related documents, and will enter into such underwriting,
cross-indemnification and contribution agreements as are usual and customary
according to the practice of the jurisdictions in which such offering is to be
effective.
Time will be of the essence hereof.
This Warrant Certificate is not valid for any purpose until it has been signed
by the Company.
IN WITNESS WHEREOF, the Company has caused its common seal to be hereto affixed
and this warrant certificate to be signed by one of its directors as of the 10th
day of October, 1997.
DATAWAVE SYSTEMS INC.
Per:
______________________________
Authorized Signatory
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SUBSCRIPTION FORM
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To: Datawave Systems Inc. (the "Company")
And to: the directors thereof.
Pursuant to the Share Purchase Warrant made the _____ day of September, 1997,
the undersigned hereby subscribes for and agrees to take up ____________ common
shares without par value (the "Shares") in the capital of the Company, at a
price of $__________ (Canadian) per Share for the aggregate sum of $__________
(the "Subscription Funds"), and encloses herewith a certified cheque, bank draft
or money order payable to the Company in full payment of the Shares.
The undersigned hereby requests that:
(a) the Shares be allotted to the undersigned;
(b) the name and address of the undersigned as shown below be entered in the
registers of members and allotments of the Company;
(c) the Shares be issued to the undersigned as fully paid and non-assessable
common shares of the Company; and
(d) a share certificate representing the Shares be issued in the name of the
undersigned.
Dated this _____ day of _______________, 19___.
DIRECTION AS TO REGISTRATION:
(NAME AND ADDRESS EXACTLY AS YOU WISH THEM TO APPEAR ON YOUR SHARE CERTIFICATE
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AND IN THE REGISTER OF MEMBERS.)
Full Name: __________________________________________________
Full Address: __________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
Signature of Subscriber: _______________________________________
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