Document:

EXHIBIT 10.36

 

INVESTOR RELATIONS CONSULTING AGREEMENT

 

This Consulting Agreement (the “Agreement”) effective as of December 2, 2014 is entered into by and between Elite Data Services, Inc. a Florida corporation (herein referred to as the “Company”) and EraStar Inc. a Nevada Corporation (herein referred to as the “Consultant”) or it’s successors, designees or assignees, and replaces and supersedes any and all other agreements between the above parties.

 

RECITALS

 

WHEREAS, Company is a publicly-held corporation with its common stock listed on the OTC Markets OTC.QB exchange under the symbol DEAC; and

 

WHEREAS, Company desires to engage the services of Consultant to advise the Company regarding investor communications, and public relations with shareholders, brokers, dealers and other investment professionals as to the Company's current and proposed activities, and to consult with management concerning such Company activities;

 

NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:

 

1. Term of Consultancy. Company hereby agrees to retain Consultant to act in an advisory and consulting capacity to the Company and Consultant hereby agrees to provide services to the Company commencing upon December 3, 2014 and ending, unless challenged or terminated, on December 3, 2015.

 

2. Duties of Consultant. Consultant agrees that it will generally provide the following specified advisory and consulting services through its officers, employees, consultants and other professionals during the term specified in Section 1:

 

	 	
·

	
Advise, consult and assist the Company in developing and implementing appropriate plans and means for presenting the Company and its business plans, strategy and personnel to the financial community, assist in establishing an image for the Company in the financial community, and assist in creating the foundation for subsequent financial public relations efforts;

	 	 	 
	 	
·

	
Assist in making new introductions of the Company to the financial community;

	 	 	 
	 	
·

	
With the cooperation and support of the Company and its management and directors, maintain an awareness during the term of this Agreement of the Company's plans, strategy and personnel, as they may evolve during such period, and consult and assist the Company in communicating appropriate information regarding such plans, strategy and personnel to the financial community;

	 	 	 
	 	
·

	
Advise, assist and consult the Company with respect to its (i) relations with stockholders, (ii) relations with brokers, dealers, analysts and other investment professionals, and (iii) financial public relations generally;

	 	 	 
	 	
·

	
Perform the functions generally assigned to shareholder relations and public relations departments in major corporations, including responding to telephone and written inquiries (which may be referred to Consultant by the Company); if requested, assist in the preparation of press releases for the Company with the Company's involvement and approval of all Company press releases, reports and other communications with or to shareholders, the investment community and the general public; consulting with respect to the timing, form, distribution and other matters related to such releases, reports and communications; and, at the Company’s request and subject to the Company’s securing its own rights to the use of its names, marks, and logos, consulting with respect to corporate symbols, logos, names, assist in the presentation of such symbols, logos and names, and other matters relating to corporate image;

	 	 	 
	 	
·

	
Under the Company's direction and approval, disseminate information regarding the Company to shareholders, brokers, dealers, other investment community professionals and the general investing public;

	 	 	 
	 	
·

	
Under the Company's direction and approval conduct meetings, in person or by telephone, with brokers, dealers, analysts and other investment professionals to communicate with them regarding the Company's plans, goals and activities, and assist the Company in preparing for press conferences and other forums involving the media, investment professionals and the general investment public;

	 	 	 
	 	
·

	
At the Company's request, and under the Company’s direction and approval, review business plans, strategies, mission statements budgets, proposed transactions and other plans for the purpose of advising the Company of the public relations implications thereof; and,

	 	 	 
	 	
·

	
Otherwise perform as the Company's advisor and consultant for public relations and relations with financial professionals.

 

	 
	
1

	

 

3. Duties of Company. The Parties hereto recognize that the success of Consultant’s services to be provided pursuant to this Agreement rely heavily on cooperation and communication between Consultant and the Company. In this regard, the Company and Consultant agree that the Company will use its best efforts in cooperating and communicating with Consultant The above notwithstanding, the Company agrees and understands that the status of the Company’s Intellectual Property rights and defenses constitutes an important part of Consultant’s understanding of and ability to perform its duties pursuant to this Agreement.

 

4. Allocation of Time and Energies. Consultant hereby promises to perform and discharge faithfully the targeted responsibilities which may be assigned to Consultant from time to time by the officers and duly authorized representatives of the Company in connection with the conduct of its financial and public relations and communications activities, so long as such activities are in compliance with applicable securities laws and regulations. Consultant and staff shall diligently and thoroughly provide the advisory and consulting services required hereunder. Although no specific hours-per-day requirement is required of Consultant pursuant to this Agreement; Consultant and the Company agree that Consultant will perform the duties set forth herein above in a diligent and professional manner. The parties acknowledge and agree that a disproportionately large amount of the effort to be expended and the costs to be incurred by Consultant are expected to occur within or shortly after the first two months of the effectiveness of this Agreement. In addition to and notwithstanding the above, the Company represents and warrants that it is, as of the date of this Agreement, fully compliant with the reporting requirements of the United States Securities and Exchange Commission (“SEC”). The Company represents and warrants that it will continue to maintain compliance with applicable SEC rules and regulations governing the filings required by public corporations. In the event that the Company is either not fully compliant as of the effective date of this Agreement, or at any time during the term of this Agreement, then the Company and Consultant shall agree on a schedule for achieving such compliance. In the event that the parties cannot agree on such a schedule, then the dispute resolution provisions of Articles 15 and 17 herein may be invoked by either party.

 

5. Remuneration.

 

a) As full and complete compensation for services described in this Agreement, the Company shall compensate Consultant by paying a one-time retainer of Twenty Five Thousand Dollars $25,000 within twenty (20) business days from the signing of the Agreement and Fifteen Thousand Dollars ($15,000) per month upon signing of the Contract. As an accommodation by the Consultant, the Company may issue stock in lieu of any cash payment if the Company is unable to fulfill their payment obligation. 

 

b) For undertaking this engagement and for other good and valuable consideration, the Company agrees to issue to Consultant eight hundred sixty-nine thousand four hundred forty-one (869,441) restricted stock shares in two certificates upon signing of the Agreement. The first certificate shall be cut to reflect Five Hundred Thousand (500,000) shares and the second certificate shall be Three Hundred and Sixty-Nine Thousand Four Hundred Forty-One (369,441) Shares. Within ten (10) business days of signing of this Agreement, the first certificate shall be promptly delivered to Consultant with its restrictive legend as a nonrefundable, non-apportionable, and non-ratable retainer of initial payment. Upon six months from the signing of the Contract if there has been no challenge or termination of the Agreement, the Company shall deliver to the Consultant the second stock certificate with its restrictive legends removed. If the Company challenges performance under this Agreement, it must do so on or before July 3, 2015, and upon third party review of performance, if performance is determined not to be met, the entire contract shall be canceled. If neither the Company or Consultant terminates or challenges this Agreement on or before July 3, 2015, the Company shall issue and deliver eight hundred sixty nine thousand four hundred forty one (869,441) restricted shares, of the Company’s Common Stock (“Common Stock” or “compensation shares”) within ten (10) business days (“Phase 2”) to the Consultant. The Company understands and agrees that Consultant has foregone significant opportunities to accept this engagement and that the Company derives substantial benefit from the execution of this Agreement and the ability to announce its relationship with Consultant. It is further agreed that if at any time during the term of this agreement, the Company or substantially all of the Company’s assets are merged with or acquired by another entity, or some other change occurs in the legal entity that constitutes the Company, the Consultant shall retain and will not be requested by the Company to return any of the shares.

 

	 
	
2

	

 

c) The Company shall grant and deliver to Consultant a warrant for 1,000,000 shares with a strike price of $2.00 per share, exercisable immediately through December 1, 2015 for a term of one (1) year from the time of its grant commencing upon the signed agreement (the “Warrant”) as additional consideration for Consultant’s services, to be delivered in one tranche. This warrant shall be issued on the effective date of this Agreement and shall be fully earned and non-assessable as of the effective date of this Agreement.

 

d) The compensation shares and warrants issued pursuant to this agreement shall be issued in the name of Consultant, Inc, Tax ID # 46-4156965 or its designees to be provided under separate cover email.

 

e) With each transfer of shares of Common Stock to be issued pursuant to this Agreement (collectively, the “Shares”); Company shall cause to be issued a certificate representing the Common Stock and, if required by applicable law, a written opinion of counsel for the Company stating that said shares are validly issued, fully paid and non-assessable and that the issuance and eventual transfer of them to Consultant has been duly authorized by the Company. Company warrants that all Shares and share equivalents issued to Consultant pursuant to this Agreement shall have been validly issued, fully paid and non-assessable and that the issuance and any transfer of them to Consultant shall have been duly authorized by the Company’s board of directors.

 

f) Consultant acknowledges that the shares are Rule 144 restricted shares of Common Stock to be issued pursuant to this Agreement (collectively, the “144 Securities”) have not been registered under the Securities Act of 1933, and accordingly are “restricted securities” within the meaning of Rule 144 of the Act. As such, the 144 Securities may not be resold or transferred unless the Company has received an opinion of counsel reasonably satisfactory to the Company that such resale or transfer is exempt from the registration requirements of that Act. The Company agrees to take any and all action(s) necessary to clear the subject securities of restriction upon presentation of any Rule 144(d) application by Consultant or its broker, including, but not limited to: (1) Authorizing the Company’s transfer agent to remove the restrictive legend on the subject securities; (2) Expediting either the acquisition of a legal opinion from Company’s counsel authorizing the removal of the restrictive legend, or accepting a third party legal opinion acknowledging same; and (3) Cooperating and communicating with Consultant and its broker in order to use Company’s best efforts to clear the subject securities of restriction as soon as possible after presentation of a Rule 144(d) application by Consultant (or its broker) to either the Company and/or the Company’s transfer agent. Further, the Company agrees to not unreasonably withhold or delay approval of any application filed by Consultant under Rule 144(d) of the Act to clear the subject securities of restriction.

 

g) Consultant and the Company acknowledge and agree that Consultant will suffer irreparable harm and anticipated and actual damages in the event that the Company unreasonably withholds or delays any Rule 144(d) application by Consultant to either the Company or the Company’s transfer agent. The Company agrees that money damages could not compensate Consultant for its irreparable harm.

 

	 
	
3

	

 

h) Consultant and the Company therefore agree that the Company shall have a period of five (5) business days from the date Consultant’s Rule 144(d) application is tendered to either the Company or its transfer agent by either Consultant and/or its broker, to take any and all necessary action to clear the subject securities of restriction, consistent the covenants in Section 5.4 above. The Company and Consultant agree that this five (5) day period is reasonable and consistent with industry standards concerning the handling and processing of restricted securities under Rule 144 by publicly traded companies. The Company also acknowledges that Consultant’s ability to clear the subject securities of restriction, by virtue of the Company’s best efforts, cooperation, covenants and representations in this regard is a material part of this Agreement and is a reasonable and material expectation of Consultant in entering into this Agreement. Should events occur that require further expense of time beyond this five (5) day time period, the Company and Consultant shall reasonably agree in a writing signed by each to an extension for a specific amount of time. In no event shall an extension be agreed to unless the Company comports with its “best efforts” obligations, as set out above, and communicates with Consultant bona fide and reasonable attempts at meeting Company’s obligations to clear the subject restricted securities, as described herein. Any written extension herein may be executed in counterparts by the principals of the Company and Consultant, and facsimile signatures may be tendered in lieu of originals. It is agreed that the separate signature of each principal on any agreement to extend time shall be deemed a complete original.

 

i) Should the Company fail to successfully take any and all actions necessary to clear the subject securities of restriction within the five (5) day time period after Consultant or its broker’s presentation of a Rule 144(d) application, or seek to extend time as provided for above in sub-section (b), and in light of the irreparable harm that Consultant will suffer in the event of any intentional and/or unintentional delay in Consultant’s Rule 144(d) application, Company herein irrevocably consents and agrees that Consultant shall be entitled to injunctive relief in order to immediately enforce Consultant’s right to removal of the restrictive legend on the Company’s securities. Company further agrees that Consultant shall be entitled to immediately seek the injunctive relief contemplated and described herein in the Superior Court of California, Marin County. Both the Company and Consultant agreed that Consultant’s access to injunctive relief; and the Company’s consent to Consultant’s ability to obtain such injunctive relief shall not otherwise amend, supersede or modify the parties’ agreement to submit any other disputes to mediation and arbitration as provided herein.

 

j) The third party representative as specified in 5(b) shall be Mike Baron.

 

6. Consent. In connection with the acquisition of Securities hereunder, Consultant represents and warrants to the Company, to the best of its/his knowledge, as follows:

 

a) Consultant acknowledges that Consultant has been afforded the opportunity to ask questions of and receive answers from duly authorized officers or other representatives of the Company concerning an investment in the Securities, and any additional information which Consultant has requested.

 

b) Consultant’s investment in restricted securities is reasonable in relation to Consultant’s net worth, which is in excess of ten (10) times Consultant’s cost basis in the Shares. Consultant has had experience in investments in restricted and publicly traded securities, and Consultant has had experience in investments in speculative securities and other investments which involve the risk of loss of investment. Consultant acknowledges that an investment in the Securities is speculative and involves the risk of loss. Consultant has the requisite knowledge to assess the relative merits and risks of this investment without the necessity of relying upon other advisors, and Consultant can afford the risk of loss of his entire investment in the Securities. Consultant is (i) an accredited investor, as that term is defined in Regulation D promulgated under the Securities Act of 1933, and (ii) a purchaser described in Section 25102 (f) (2) of the California Corporate Securities Law of 1968, as amended.

 

c) Consultant is acquiring the Securities for Consultant’s own account for long-term investment and not with a view toward resale or distribution thereof except in accordance with applicable securities laws.

 

	 
	
4

	

 

7. Non-Assignability of Services. Consultant’s services under this contract are offered to Company only and may not be assigned by Company to any entity with which Company merges or which acquires the Company or substantially all of its assets. In the event of such merger or acquisition, all compensation to Consultant herein under the schedules set forth herein shall remain non cancellable and due and payable, and any compensation received by Consultant may be retained in the entirety by Consultant, all without any reduction or pro-rating and shall be considered and remain fully paid and non-assessable. Notwithstanding the non-Assignability of Consultant’s services, Company shall assure that in the event of any merger, acquisition, or similar change of form of entity, that its successor entity shall agree to complete all obligations to Consultant, including the provision and transfer of all compensation herein, and the preservation of the value thereof consistent with the rights granted to Consultant by the Company herein, and to Shareholders.

 

8 Expenses. Consultant agrees to pay for all its other than extraordinary items outside the normal scope of operations as approved by the Company prior to its incurring an obligation for reimbursement.

 

9. Indemnification.

 

(a) The Company warrants and represents that all communications, written documents or materials furnished to Consultant by the Company with respect to financial affairs, operations, profitability and strategic planning of the Company are accurate and Consultant may rely upon the accuracy thereof without independent investigation. The Company will protect, indemnify and hold harmless Consultant against any claims or litigation including any damages, liability, cost and reasonable attorney's fees as incurred with respect thereto resulting from Consultant 's performance of its obligations under this Agreement, communication or dissemination of any said information, documents or materials excluding any such claims or litigation resulting from Consultant's communication or dissemination of information not provided or authorized by the Company.

 

(b) The Consultant agrees to indemnify and hold harmless the Company, its partners, financiers parent, affiliated and related companies, and all of their respective individual shareholders, directors, officers, employees, licensees and assigns from and against any claims, actions, losses and expenses (including legal expenses) occasioned by any breach of the Consultant's representations and warranties contained in, or by any breach of any other provision of, this Agreement by the Consultant.

 

(c) Compliance with Laws. Both Consultant and Company will comply with all applicable international, national, regional, and local laws and regulations with regard to its activities under this Agreement, including any applicable laws and regulations in the Territory, and the U.S. Foreign Corrupt Practices Act, which prevents unlawful payments to third parties and such party in violation is subject to the indemnification of the other party for resulting claims.

 

(d) All Prior Discussion Amendments Must Be In Writing. No provisions in either party’s past discussions, or in any other business forms or documents or emails employed by either party will supersede the terms and conditions of this Agreement, and no supplement, modification, or amendment of this Agreement shall be binding, unless executed in writing by a duly authorized representative of each party to this Agreement. This writings can be submitted via email post contract date. Therefore, it is very important that both parties carefully read and inspect this contract and if any agreed to terms have been omitted not included, prior to affixed signatures, the Contract shall be modified to reflect the intent and agreements of both parties. Once signatures are affixed hereto, all past agreements shall be deemed voided and this Agreement shall set forth the intent of the parties.

 

	 
	
5

	

 

10. Representations and Warranties. The Company represents and warrants that any information furnished to Consultant will contain no untrue statement of any material fact nor omit any material facts, which would make the information misleading. The Company represents and warrants that it will adhere to any and all local, state and federal laws, rules and regulations governing the Company’s businesses and any and all actions and activities involving the Company, its shareholders and the investment community. The Company further warrants that if the circumstances relating to information or documents furnished to Consultant change at any time, the Company will inform Consultant promptly of the changes and immediately deliver to Consultant documents or information necessary to ensure the continued accuracy and completeness of all information and documents. Consultant represents to the Company that it will not, to the best of Consultant’s knowledge and belief, make any untrue statement of material fact. Consultant further represents and warrants to the Company that, to the best of Consultant’s knowledge and belief, all actions taken by it, on behalf of the Company, in connection with its’ advisory services will be conducted in compliance with all applicable state and federal laws. Further, Consultant shall comply with any procedures that might be reasonably imposed by the Company or its legal counsel to ensure compliance with such laws. Both the Company and Consultant agree and acknowledge that they and their employees, advisors and consultants and therefore the parties’ duties and obligations under this Agreement will be performed and governed by applicable state and federal law, including without limitation the federal securities laws. All parties expressly understand, agree and acknowledge that Consultant's performance of its duties hereunder cannot and therefore will in no way be measured by the price of the Company's common stock, nor the trading volume of the Company's common stock. It is also understood that the Company is entering into this Agreement with EraStar, Inc, a Nevada Corporation and not any individual member of EraStar, and, as such, Consultant will not be deemed to have breached this Agreement if any member, officer or director of EraStar leaves the firm or dies or becomes physically unable to perform any meaningful activities during the term of the Agreement, provided the Consultant otherwise performs its obligations under this Agreement. Consultant represents that it is not required to maintain any licenses and registrations under federal or any state regulations necessary to perform the services set forth herein. Consultant acknowledges that, to the best of its knowledge, the performance of the services set forth under this Agreement will not violate any rule or provision of any regulatory agency having jurisdiction over Consultant. Consultant acknowledges that, to the best of its knowledge, Consultant and its officers and directors are not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws. Consultant further acknowledges that it is not a securities Broker Dealer or a registered investment advisor. Company acknowledges that, to the best of its knowledge, that it has not violated any rule or provision of any regulatory agency having jurisdiction over the Company. Company acknowledges that, to the best of its knowledge, Company is not the subject of any investigation, claim, decree or judgment involving any violation of the SEC or securities laws.

 

11. Legal Representation. Consultant represents that it has consulted with independent legal counsel and/or tax, financial and business advisors, to the extent the Consultant deemed necessary.

 

12. Status as Independent Contractor. Consultant's engagement pursuant to this Agreement shall be as independent contractor, and not as an employee, officer or other agent of the Company. Neither party to this Agreement shall represent or hold itself out to be the employer or employee of the other. Consultant further acknowledges the consideration provided hereinabove is a gross amount of consideration and that the Company will not withhold from such consideration any amounts as to income taxes, social security payments or any other payroll taxes. All such income taxes and other such payment shall be made or provided for by Consultant and the Company shall have no responsibility or duties regarding such matters. Neither the Company nor the Consultant possesses the authority to bind each other in any agreements without the express written consent of the entity to be bound.

 

13. Attorney's Fee. If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs in connection with that action or proceeding, in addition to any other relief to which it or they may be entitled.

 

14. Waiver. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such other party.

 

	 
	
6

	

 

15. Notices. All notices, requests, and other communications hereunder shall be deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the other party at the address as set forth herein below:

 

To the Company:

Elite Data Services, Inc.

4447 N. Central Expressway Ste 110-135

Dallas, TX 75205

(972)-885-3981

Attention: Steven Frye, CEO

 

EraStar Inc.:

 

11411 Southern Highlands Parkway Ste 160

Las Vegas NV 89141

(702) 480 9800

Attention: Jens Dalsgaard, CEO

 

It is understood that either party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in the manner set forth in this paragraph.

 

16. Term and Termination of Agreement.

 

a) This Agreement shall remain in full force and effect for a term of twelve (12) months as detailed in Paragraph 5. During the terms of this Agreement the indemnity provisions set forth paragraph in 14 shall survive any termination of this Agreement.

 

b) After the original term of this agreement is expired, this agreement may be extended upon either party giving the other party 30 days written notice, which written notice shall be sent by certified mail return receipt. Extension of the agreement shall be effective on the 30th day after said written notice has been mailed or delivered, whichever is earlier.

 

c) Notwithstanding anything to the contrary, if either party materially breaches this agreement, the non-breaching party may, at his or its election, immediately terminate the agreement thereby relieving the non-breaching party of any obligation there under. Alternatively, the non-breaching party may proceed with performance without waiving any rights under the agreement. A material breach will mean and refer to a party's failure to comply with any covenants or obligation specified in this agreement.

 

d) In the event of a dispute arising between parties the dispute may be submitted to mediation before the Judicial Arbitration and Mediation Services ("JAMS") in Nevada or Tennessee as pursuant to Paragraph 16. The parties shall bear the costs of mediation equally. In the event that either party refuses to participate in mediation said party shall be prohibited from recovering attorney fees notwithstanding anything to the contrary in this agreement.

 

e) If mediation should fail to resolve the dispute between the parties, the matter shall be submitted to JAMS for binding arbitration. The discovery rules of the court shall apply and both parties have a duty of good faith to limit the cost and scope of discovery to materials pertinent to the dispute at hand. The costs of arbitration shall be equally shared by the parties until the dispute is either settled or adjudicated, at which time the arbitration may award said fees and costs to the prevailing party.

 

17. Choice of Law, Jurisdiction and Venue. The parties agree that if the Consultant is to bring an action under this Agreement, the Agreement shall be governed by, construed and enforced in accordance with the State of Nevada and Nevada will be the venue of any dispute and will have jurisdiction over all parties. The parties further agree that if the Company is to bring an action under this Agreement, the Agreement shall be governed by, construed and enforced in accordance with the State of Tennessee and Tennessee will be the venue of any dispute and will have jurisdiction over all parties.

 

	 
	
7

	

 

18. Arbitration. Any controversy or claim arising out of or relating to this Agreement, or pertaining to any and all prior or subsequent agreements between or amongst the parties; or the alleged breach thereof, or relating to Consultant 's activities or remuneration under this Agreement, shall be settled by binding arbitration in Nevada (if brought by Consultant) or Tennessee (if brought by Company), in accordance with the applicable rules of the JAMS, and judgment on the award rendered by the arbitrator(s) shall be binding on the parties and may be entered in any court having jurisdiction as provided by Paragraph 14 herein.

 

19. Complete Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

 

20. Severability. If any provision of this Agreement should, for any reason, be held violative of any applicable law, and so much of this Agreement, be held unenforceable, then the invalidity of such a specific provision in this Agreement shall not be held to invalidate any other provision in this Agreement, which other provisions shall remain in full force and effect unless removal of the invalid provisions destroys the legitimate purposes of this Agreement, in which event this Agreement shall be cancelled.

 

21. Confidentiality. From time to time during the Term, either Party (as the ”Disclosing Party”) may disclose or make available to the other Party (as the ”Receiving Party”) information about its business affairs and services, confidential information and materials comprising or relating to Intellectual Property, trade secrets, third-party confidential information and other sensitive or proprietary information, as well as the terms of this Agreement[, whether orally or in written, electronic or other form or media][, and] [[,]whether or not marked, designated or otherwise identified as “confidential”] (collectively, ”Confidential Information”). Confidential Information does not include information that, at the time of disclosure [and as established by documentary evidence]: (a) is or becomes generally available to and known by the public other than as a result of, directly or indirectly, any breach of this Section 9 by the Receiving Party or any of its Representatives; (b) is or becomes available to the Receiving Party on a non-confidential basis from a third-party source, provided that such third party is not and was not prohibited from disclosing such Confidential Information; (c) was known by or in the possession of the Receiving Party or its Representatives prior to being disclosed by or on behalf of the Disclosing Party; (d) was or is independently developed by the Receiving Party without reference to or use of, in whole or in part, any of the Disclosing Party’s Confidential Information; or (e) is required to be disclosed pursuant to applicable Law. The Receiving Party shall[, for 6 months from [receipt/disclosure] of such Confidential Information]: (x) protect and safeguard the confidentiality of the Disclosing Party’s Confidential Information with at least the same degree of care as the Receiving Party would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care; (y) not use the Disclosing Party’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and (z) not disclose any such Confidential Information to any Person, except to the Receiving Party’s Representatives who need to know the Confidential Information to assist the Receiving Party, or act on its behalf, to exercise its rights or perform its obligations under this Agreement. The Receiving Party shall be responsible for any breach of this Section 9 caused by any of its Representatives. [[On the expiration or earlier termination of this Agreement/At any time during or after the Term, at the Disclosing Party’s written request], the Receiving Party and its Representatives shall, pursuant to Section 10.4, promptly [return/destroy] all Confidential Information and copies thereof that it has received under this Agreement.

 

	 
	
8

	

 

22. All Prior Discussion Amendments Must Be In Writing. No provisions in either party’s past discussions, or in any other business forms or documents or emails employed by either party will supersede the terms and conditions of this Agreement, and no supplement, modification, or amendment of this Agreement shall be binding, unless executed in writing by a duly authorized representative of each party to this Agreement. This writings can be submitted via email post contract date. Therefore, it is very important that both parties carefully read and inspect this contract and if any agreed to terms have been omitted not included, prior to affixed signatures, the Contract shall be modified to reflect the intent and agreements of both parties. Once signatures are affixed hereto, all past agreements shall be deemed voided and this Agreement shall set forth the intent of the parties.

 

	
AGREED TO:

				
						
	
“Company”

	 	Elite Data Services Inc.	 
	
 

		 	
	 Date:	December 3, 2014	 	By:	/s/ Steven Frye 	 
	 		 	 	Steven Frye, CEO/President	 
	 		 	 		 
	“Consultant”			 Erastar, Inc.	
	 	 			 	
	 Date:	December 3, 2014 		By:	 /s/ Vanessa Luna 	
	 	 			 Vanessa Luna, COO/President	

 

 

9EXHIBIT 10.37

 

ELITE DATA SERVICES, INC. WARRANT AGREEMENT

 

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK FOR WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

WARRANT TO PURCHASE COMMON STOCK

EXERCISE PRICE: $2.00 PER SHARE

 

Warrant Certificate Number: W-001

Number of Shares of Common Stock: One Million (1,000,000) Shares

Date of Issuance: December 2, 2014

Expiration Date: December 2, 2015 at 5:00 PM, New York Time

 

Elite Data Services, Inc. (OTCBB:DEAC), a Florida corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, EraStar Inc., the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the Issuance Date, but not after 5:00 p.m., New York time, on December 2, 2015 (the “Expiration Date”, One Million (1,000,000) fully paid nonassessable shares of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section XIII. This Warrant is issued pursuant to that certain Investor Relations Consulting Agreement (the “Agreement”) dated as of December 2, 2014 by and among the Company and the original Holder hereof.

 

	
I.

	
EXERCISE OF WARRANT.

 

	 	
a.

	
Mechanics of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part, by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the fifth (5th) Business Day following the date on which the Company has received the Exercise Notice, the Company shall transmit an acknowledgment of confirmation of receipt of the Exercise Notice to the Holder and the Company’s transfer Agent (“Transfer Agent”). On or before the tenth (10th) Business Day following the date on which the Company has received the Exercise Notice (the “Share Delivery Date”), the Company shall, (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, or if the Registration Statement is not effective at the time this Warrant is exercised, issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of the Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be. If this Warrant is submitted in connection with any exercise pursuant to this Section I.a and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section IV) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded down to the nearest whole number.

 

	 
	
1

	

 

	 	
b.

	
Exercise Price. For purposes of this Warrant, “Exercise Price” means $2.00 per share for the total amount of the Warrant Shares granted to Holder in this Warrant.

 

	 	
c.

	
Payment of Exercise Price. Within two (2) Trading Days of the date of the Exercise Notice, the Holder shall make payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”) in cash or by wire transfer of immediately available funds.

	 	
 

	 
	 	
d.

	
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed.

	 	
 

	 
	 	
e.

	
Beneficial Ownership. The Holder shall not have the right to exercise this Warrant, to the extent that after giving effect to such exercise, such Person (together with such Person’s affiliates) would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such exercise. The Company shall be entitled to rely on Holder’s exercise notice as an indication that Holder will not, pursuant to such exercise, exceed the Maximum Percentage. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (i) exercise of the remaining, unexercised portion of this Warrant beneficially owned by such Person and its affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such Person and its affiliates (including, without limitation, any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written or oral request of the Holder, the Company shall within two (2) Business Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the Company, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i) any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any such increase or decrease will apply only to the Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section I(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.

 

	 
	
2

	

 

	
II.

	
REPRESENTATIONS.

 

	 	
a.

	
By the Holder. The Holder represents and warrants to the Company as follows:

 

	 	 	
i.

	
It is an “accredited investor” within the meaning of Rule 501 of the Securities Act. This Warrant is acquired for the Holder’s own account for investment purposes and not with a view to any offering or distribution within the meaning of the Securities Act and any applicable state securities laws. The Holder has no present intention of selling or otherwise disposing of the Warrant or the Warrant Shares in violation of such laws; and

	 	 	
 

	 
	 	 	
ii.

	
The Holder has sufficient knowledge and expertise in financials and business matters as to be capable of evaluating the merits and risk of its investment in the Company. The Holder acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to make this investment. The Holder understands that this investment involves a high degree of risk and could result in a substantial or complete loss of its investment. The Holder is capable of bearing the economic risks of such investment.

	 	 	
 

	 
	 	 	
iii.

	
This Warrant has been authorized by all necessary corporate action of the Holder and constitutes a valid and legally binding obligation of the Holder, enforceable in accordance with its terms.

	 	 	
 

	 
	 	 	
iv.

	
The Holder acknowledges that the Company has indicated that the Warrant and the Warrant Shares have not been registered under the Securities Act by reason of their issuance in a transaction exempt from registration requirements thereof, and that the Warrant Shares will bear a legend stating that such securities have not been registered under the Securities Act and may not be sold or transferred in the absence of such registration or an exemption from such registration.

 

	 	
b.

	
By the Company. The Company represents and warrants that:

 

	 	 	
i.

	
It (A) is a corporation duly organized, validly existing and in good standing under the laws of the state of its organization, (B) has all requisite power and authority to conduct its business as now conducted and as presently contemplated and to consummate the transactions contemplated hereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

	 	 	
 

	 
	 	 	
ii.

	
The execution, delivery and performance by the Company of this Warrant (A) has been duly authorized by all necessary corporate action, (B) does not and will not contravene the Company’s charter or bylaws or any other organizational document and (C) does not and will not contravene any applicable law or any contractual restriction binding on or otherwise affecting the Company or any of its properties or result in a default under any agreement or instrument to which the Company is a party or by which the Company or its properties may be subject.

 

	 
	
3

	

 

	 	 	
iii.

	
This Warrant has been duly executed and delivered by the Company, and is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium and other laws affecting the rights of creditors generally and general principles of equity.

	 	 	
 

	 
	 	 	
iv.

	
Assuming the accuracy of the representations made by the Holder in Section II hereof, no authorization, consent, approval, license, exemption or other action by, and no registration, qualification, designation, declaration or filing with, any governmental authority is or will be necessary in connection with the execution and delivery by the Company of this Warrant, the issuance by the Company of the Warrant Shares, the consummation of the transactions contemplated hereby, the performance of or compliance with the terms and conditions hereof, or to ensure the legality, validity, and enforceability hereof.

	 	 	
 

	 
	 	 	
v.

	
The Company has reserved solely for issuance and delivery upon the exercise of this Warrant, such number of shares of Common Stock to provide for the exercise in full of this Warrant.

	 	 	
 

	 
	 	 	
vi.

	
Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would require registration, or the filing of a prospectus qualifying the distribution, of this Warrant being issued hereby under the Securities Act or cause the issuance of this Warrant to be integrated with any prior offering of securities of the Company for purposes of the Securities Act.

 

	 	 	 	
1.

	
Shares to be Fully Paid. All Warrant Shares will, upon issuance in accordance with the terms of this Warrant, be validly issued, fully paid, and non-assessable and free from all taxes, liens, claims and encumbrances.

	 	 	 	
 

	 
	 	 	 	
2.

	
Authorization and Reservation of Shares. During the Exercise Period, the Company shall have duly authorized a sufficient number of shares of Common Stock, free from preemptive rights and from any other restrictions imposed by the Company without the consent of the Holder, to provide for the exercise in full of this Warrant. The Company shall at all times during the Exercise Period reserve and keep available out of such authorized but unissued shares of Common Stock such number of shares to provide for the exercise in full of this Warrant.

	 	 	 	
 

	 
	 	 	 	
3.

	
Listing. In connection with the Holder’s exercise of Registration Rights hereunder, the Company shall use its best efforts to promptly secure the listing of the shares of Common Stock issuable upon exercise of this Warrant upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed or become listed (subject to official notice of issuance upon exercise of this Warrant) and shall maintain such listing for so long as any other shares of Common Stock shall be so listed.

	 	 	 	
 

	 
	 	 	 	
4.

	
Successors and Assigns. Except as expressly provided otherwise herein, this Warrant will be binding upon any entity succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets.

	 	 	 	
 

	 
	 	 	 	
5.

	
Blue Sky Laws. The Company shall, on or before the date of issuance of any Warrant Shares, take such actions as the Company shall reasonably determine are necessary to qualify the Warrant Shares for, or obtain exemption for the Warrant Shares for, sale to the Holder of this Warrant upon the exercise hereof under applicable securities or “blue sky” laws of the states of the United States; provided, however, that the Company shall not be required to qualify as a foreign corporation.

	 	 	 	
 

	 
	 	 	 	
6.

	
Rule 144 Reports. For so long as the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act the Company agrees to use its best efforts to take all actions reasonably necessary to enable the Holder to sell the Warrant Shares without registration under the Securities Act within the limitations of the exemptions provided by Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC, including filing on a timely basis all reports required to be filed by the Exchange Act. Upon the request of the Holder, the Company shall deliver to the Holder a written statement as to whether it has complied with such requirements.

 

	 
	
4

	

 

	
III.

	
WARRANT HOLDER NOT DEEMED A STOCKHOLDER.

 

	 	
a.

	
Except as otherwise specifically provided herein, the Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the 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.

	 	
 

	 
	 	
b.

	
Transfer of Warrant. This Warrant may be transferred only upon the written consent of the Company, which may be withheld in its sole discretion. No such consent shall be required upon the transfer of this Warrant under the laws of Descent. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant, registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less then the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

	 	
 

	 
	 	
c.

	
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant representing the right to purchase the Warrant Shares then underlying this Warrant.

	 	
 

	 
	 	
d.

	
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given.

	 	
 

	 
	 	
e.

	
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant, the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.

 

	 
	
5

	

 

	
IV.

	
NOTICES.

 

Any notice, statement or demand authorized by this Warrant Agreement or made by the Warrant Agent or by the holder of any Warrant to or on the Corporation shall be both 1) emailed to smyers@edscompanies.com and 2) delivered by hand or sent by registered or certified mail or overnight courier service addressed (until another address is filed in writing by the Corporation with the Warrant Agent) as follows:

 

Elite Data Services, Inc.

ATTN: EraStar Warrant

4447. N Central Expressway Ste 110-135

Dallas, TX 75205

 

Any notice, statement, or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Corporation to or on the Warrant Agent shall be delivered by hand or sent be registered certified mail or overnight courier service, addressed (until another address is filed in writing by the Corporation with the Warrant Agent) as follows:

 

EraStar Inc.

11411 Southern Highlands Parkway Ste 160

Las Vegas, NV 89141

 

	
V.

	
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder.

	
 

	 
	
VI.

	
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of Tennessee, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Tennessee.

	
 

	 
	
VII.

	
FORUM SELECTION CLAUSE. Any dispute arising under or in connection with the Warrant or related to the terms of this Agreement shall be subject to the exclusive jurisdiction of the state of Tennessee located in Nashville, Tennessee, and any dispute between the parties shall come within the jurisdiction of the court in Davidson County, Tennessee.

	
 

	 
	
VIII.

	
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

	
 

	 
	
IX.

	
DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations via facsimile within two (2) Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within three Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

 

	 
	
6

	

 

	
X.

	
REMEDIES, OTHER OBLIGATIONS, BREACHES, AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.

	
 

	 
	
XI.

	
TRANSFER. This Warrant may not be offered for sale, sold, transferred or assigned without the written consent of the Company, which may be withheld in its sole discretion, and only in compliance with applicable Federal and State securities laws.

	
 

	 
	
XII.

	
WARRANT AGENT. The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register in addition to emailing smyers@edscompanies.com.

	
 

	 
	
XIII.

	
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

	 	 	
1)

	
“Bloomberg” means Bloomberg Financial Markets.

	 	 	
 

	 
	 	 	
2)

	
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

	 	 	
 

	 
	 	 	
3)

	
“Closing Bid Price” means, for any security as of any date, the last closing bid price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price, as the case may be, then the last bid price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

	 	 	
 

	 
	 	 	
4)

	
“Common Stock” means (i) the Company’s shares of Common Stock, par value $0.0001 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

	 	 	
 

	 
	 	 	
5)

	
“Eligible Market” means the Principal Market, The New York Stock Exchange, Inc., The American Stock Exchange or The NASDAQ Capital Market.

 

	 
	
7

	

 

	 	 	
6)

	
“Fundamental Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), (v) reorganize, recapitalize or reclassify its Common Stock, or (vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

	 	 	
 

	 
	 	 	
7)

	
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

	 	 	
 

	 
	 	 	
8)

	
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

	 	 	
 

	 
	 	 	
9)

	
“Principal Market” means The OTC Bulletin Board.

	 	 	
 

	 
	 	 	
10)

	
“Registration Statement” means a registration statement on Form S-1, Form S-3, or such other eligible registration form as determined in the sole discretion of the Company which registers the resale of the Warrant Shares pursuant to Rule 415 promulgated under the Securities Act.

	 	 	
 

	 
	 	 	
11)

	
“Securities Act” means the Securities Act of 1933, as amended.

	 	 	
 

	 
	 	 	
12)

	
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

	 	 	
 

	 
	 	 	
13)

	
“Trading Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 5:00 p.m., New York time).

 

	 
	
8

	

 

IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

 

	 	ELITE DATA SERVICES, INC.
A Florida Corporation

	 
	 	 	 	 
		By:	/s/ Sarah Myers 	 
	 	 	Sarah Myers	 
	 	 	COO/President	 

 

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}]]