DataWave Systems Inc.

DataWave Systems Inc.

March 09, 2005 18:50 ET

DataWave Systems Inc.: Merger Break-Up and Mutual Release Agreement



OTC Bulletin Board SYMBOL: DWVSF

MARCH 9, 2005 - 18:50 ET

DataWave Systems Inc.: Merger Break-Up and Mutual
Release Agreement

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 9, 2005) - DataWave
Systems Inc. ("DataWave") (OTCBB:DWVSF) announced today that it has
finalized and executed a "Merger Break-Up and Mutual Release Agreement"
(the "Agreement") with Integrated Data Corp. ("IDC") to conclusively
settle the issues that had arisen between DataWave and IDC as a result
of the break-up of their merger negotiations. The merger negotiations
between DataWave and IDC, pursuant to the "Agreement and Plan of Merger"
entered into by them in June of 2004, were terminated by mutual
agreement of the parties on November 9th, 2004.

Under the Agreement, DataWave will pay to IDC US$470,000.00 as
compensation for IDC's costs of the merger negotiations with DataWave.
Under the Agreement, IDC has agreed not to insist on its right as the
majority shareholder of DataWave to appoint a director or directors to
the Board of Directors of DataWave. DataWave will pay the foregoing
amount to IDC by paying $235,000 in cash and issuing 2,937,500 Common
shares of DataWave, at a price of US$0.08 per share, which is the price
of DataWave Common shares as of February 1, 2005, the date as of which
the Board of Directors of DataWave approved the tentative terms of the

IDC, which now owns 21,972,030 or 50.1% of the shares of DataWave, will
own 24,909,530 or 53.2% of the shares of DataWave after this transaction.

Josh Emanuel, Chairman & CEO of DataWave states "the Agreement is
beneficial for DataWave as it increases the independence of the Company
and removes restrictions on the DataWave's ability to conduct its
business. This independence should allow us to explore and benefit from
many opportunities as they present themselves."

Graham Jackson has resigned as a director of DataWave. DataWave's Board
of Directors now consists of Josh Emanuel, Chairman and two independent
directors - John X. Adiletta and Vijay Fozdar.

About DataWave (

DataWave has been an innovator and developer of prepaid and stored-value
programs and merchandising solutions since it was founded in 1994.
DataWave pioneered systems that allow for point-of-sale activation of
high value, high shrinkage products, such as cash cards, prepaid phone
cards and prepaid wireless time. These systems work equally well over
the Internet, through intelligent freestanding vending machines and POSA
terminals, or with various card activation devices, including cash

DataWave Systems Inc.

John Gunn, General Manager, CFO

Legal Notice Regarding Forward-Looking Statements:

Statements in this news release which are not purely historical are
forward-looking statements, including any statements regarding beliefs,
plans, expectations or intentions regarding the future.

This news release contains forward-looking statements that involve risks
and uncertainties concerning the buy back of the exclusive international
license from Integrated Data Corp, that we are in a position to develop
international opportunities, that the Company is entering an exciting
period of sustained growth, which should result in the Company achieving
an internationally recognized standing . Actual events or results may
differ materially from those described in this news release due to a
number of risks and uncertainties. Potential risks and uncertainties
include, but are not limited to, the risk that IDC will not exercise
their rights to convert the promissory note into stock in DataWave, and
that DataWave will not benefit from international opportunities or
achieve internationally recognized standing because of competition, lack
of funds, lack of distribution of our products or other factors.

Although we believe that the beliefs, plans, expectations and intentions
contained in this letter are reasonable, there can be no assurance that
such beliefs, plans, expectations or intentions will prove to be
accurate. Readers should also refer to the risk disclosures outlined in
our annual report on Form 10-KSB for the year ended March 31, 2004,
filed with the United States Securities and Exchange Commission.

"DataWave" is a registered trademark of the Company. All other
trademarks and trade names referred to are the property of their
respective owners.


Contact Information

    DataWave Systems Inc.
    Josh Emanuel
    Chairman & CEO
    (973) 774-5000
    DataWave Systems Inc.
    John Gunn
    General Manager, CFO
    (604) 295-1810