ENDORSEMENT AND SERVICES AGREEMENT
This Agreement is made this 15th day of October, 2004 by and between Kentucky Eleven, Inc. ("KE") for the
services of Phil Simms ("Simms") and Teknik Digital Arts, Inc. ("TDA").
WHEREAS, TDA desires that KE, and KE agrees, to cause Simms to perform certain services for TDA and to
grant certain rights to TDA in connection with the promotion, marketing and advertising of certain of TDA's
"Products", as defined herein, on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the mutual promises contained herein, it is agreed as follows:
1. "Products", as used herein, shall mean: (i) that certain interactivity licensed device presently known as the Pep
Pad, by whatever name hereafter known ("Pep Pad") and (ii) specifically all physically interactive training
performance software developed for use with the PepPad, in any and all licensed platforms and applications,
which now or which may hereafter during the Term hereof (as hereinafter defined) utilize the "Pep Pad for
physically interactive training purposes".
2. (a) TDA shall have the right to use Simms's name, photograph and likeness in connection with printed materials
promoting, marketing and/or advertising the Products, including but not limited to, consumer print advertising,
sales brochures and Product labeling and packaging. Simms shall have the right to approve the foregoing,
including but not limited to all proposed advertising copy, sales brochures and all proposed Product labeling and
packaging. Simms shall have fourteen (14) days from receipt of marketing materials to disapprove in writing to
JV and explain specifically why materials are not approved. If notice is not received within that time frame, then
said materials shall be deemed approved.
(b) Simms shall be available to perform for the recording of radio and television commercials and/or
"infomercials" for the Products. TDA agrees that Simms shall have the right to approve the proposed and final
script and format of any of the foregoing and all proposed final edited versions thereof prior to initial broadcast.
Simms shall have fourteen (14) days from reviewing proposed and final scripts, infomercials and commercials to
disapprove in writing to JV. If notice is not received within that time frame, then said materials shall be deemed
approved. No more than one (1) infomercial per year shall be produced during each "Contract Period" of the
"Term" hereof (as those terms are defined in Paragraph 3(a) below).
(c) In connection with the performance of his duties pursuant to Paragraphs 2(a) and 2(b) above, Simms shall be
available to TDA during each year of the "Contract Period" of the "Term" hereof for a total of up to two (2)
Personal Services Days, one (1) of which shall be devoted to: (x) a photo session for materials subject to
Paragraph 2(a) and/or the production of any radio commercials produced pursuant to Paragraph 2(b), and the
other of which shall be devoted to: (y) the production of television commercials and/or an infomercial subject to
Paragraph 2(b). Simms's maximum time commitment for any Personal Services Day shall be four (4) hours with
respect to a photo session and/or radio production session and eight (8) hours with respect to a television and/or
infomercial production session. Hours available for a Personal Services Day may not be used over the course of
more than one (1) calendar day and are not transferable between each other.
(d) In addition to the foregoing, Simms shall be available during each year of the "Contract Period" of the "Term"
hereof to make up to three (3) personal appearances on TDA's behalf, the location, format and nature of Simms's
duties in connection therewith to be mutually agreed upon. Simms' maximum time obligation in connection with
each personal appearance shall be two (2) hours.
(e) All services to be performed hereunder shall be performed at mutually agreeable times and locations and shall
be subject to at least fifteen (15) days prior written notice and to any prior conflicting engagements or obligations
Simms may have. In connection with all services, TDA shall provide Simms and one
(1) companion or business representative with roundtrip airfare and limousine ground transportation and (if
required) room and lodging, all of which shall be on a "first class" basis.
(f) Personal Services Days and personal appearance days are not cumulative and may not be transferred
between Contract Periods.
3. (a) The term of this Agreement (the "Term") and of TDA's rights hereunder shall be for a three (3) year period
commencing on the date hereof and expiring on October 14, 2007, unless sooner terminated or renewed in
accordance with applicable provisions elsewhere set forth herein. "Contract Period", as used herein, shall mean
each consecutive twelve (12) month period of the Term, the first of which shall commence as of October 15,
(b) The territory to which this agreement applies is the world (the "Territory".)
4. TDA shall pay KE the following compensation in respect of the rights granted and services agreed to be
performed by Simms hereunder:
(a) Royalty: TDA will pay KE a royalty of five (5%) percent of TDA's "Adjusted Gross Receipts" from the sale
in any and channels of distribution, or any other exploitation, of the Products during the "Royalty Period" (as
hereafter defined) throughout the Territory. "Adjusted Gross Receipts" shall mean TDA's gross receipts from
such sale or other exploitation of the Products, less only, on a Product by Product basis, actual documented out
of pocket third party distribution costs or charges. "Royalty Period" shall mean the three (3) year period
commencing as of the date of the first commercial shipment of any of the Products, notwithstanding that said
Royalty Period shall end following expiration of the Term. TDA shall, on or before 45 days following each
September 30th, December 31st, March 31st and June 30th during the Royalty Period, render detailed reports
to KE setting forth the quantities of Products sold by TDA and the Adjusted Gross Receipts derived therefrom
during the preceding period. At the time of rendering such reports, TDA will pay to KE all royalties shown to be
due. KE shall have the right to audit TDA's books and records upon reasonable notice to verify the accuracy of
TDA's accountings. In the event of a discrepancy in KE's favor of 5% or more, TDA shall reimburse KE for its
audit fees and expenses.
(b) TDA confirms KE's royalty is payable by TDA regardless of whether TDA elects to actually use any or all of
the rights granted herein or call upon any or all of the services Simms has agreed to perform hereunder, so long as
Simms is ready, willing and able to perform.
(c) All monies payable to KE shall be paid to "16W Marketing, LLC, as
agent for Kentucky Eleven, Inc. f/s/o Phil Simms" and shall be sent to KE c/o
16W Marketing, LLC, 75 Union Avenue, Rutherford, NJ 07070 or such other address
as KE may designate in writing.
5. For a period of 120 days following the expiration of the Royalty Period hereof TDA shall have the right to sell-
off TDA's then remaining inventory of royalty bearing Products bearing Simms's name or likeness, subject to
TDA's obligation to pay the applicable royalty to KE hereunder within 30 days after expiration of each sixty (60)
day period of the sell-off period.
6. (a) Simms shall not endorse within the Territory during the Term hereof any other interactive fitness video
games. Simms shall not otherwise be restricted hereby in connection with the exploitation of his name,
photograph, likeness, autograph, or services. TDA agrees that the rights granted to TDA hereunder may be
utilized solely in connection with the advertising and promotion of the Products and may not, without Simms's
prior written consent, be used in conjunction with the advertising or promotion of any other products, services or
goods (that is, there shall be no cross-promotions, tie-ins or other types of uses associated with other products or
services without such consent). TDA further agrees that Simms shall have the right to approve in advance all
press releases, biographies and other written or visual material issued to promote the subject matter hereof.
(b) No premium or promotional items utilizing any of the rights granted to TDA hereunder may be produced
without KE's consent.
7. TDA understands and agrees that KE and Simms shall not be deemed to be granting TDA any rights owned
or controlled by any third parties, including but not limited to the CBS, the NFL or the New York Giants, any
required clearance of which shall be TDA's sole responsibility at TDA's sole expense.
8. (a) TDA hereby indemnifies and holds harmless, KE, Simms, his and its agents and assigns from and against
any and all liability, expense and cost (including reasonable attorneys' fees) arising out of any claim based on the
use, quality, or safety of the Products or based on any act or omission by TDA or any of TDA's agents, officers,
or employees or any third parties in connection with the production or creation of advertising or promotional
materials hereunder, or based on any act or omission by Simms in connection with the performance by Simms of
any of his obligations hereunder.
(b) TDA shall provide, at its sole cost, Commercial General Liability insurance covering any claims, liabilities or
losses described in the foregoing indemnity. Such insurance shall be in an amount not less than one Million
($1,000,000) Dollars aggregate per occurrence and One Million ($1,000,000), placed with C.N.A. KE, Simms
and all other indemnitees referred to in Paragraph 8(a) shall be listed as additional insureds in connection with the
foregoing insurance policies and TDA will provide KE with documentation of compliance with the foregoing.
9. TDA may not claim KE or Simms to be in breach hereof unless TDA has given KE written notice of any
alleged breach and same has not been substantially cured within twenty (20) days following receipt of such
10. This Agreement represents the sole and final agreement between the parties hereto and may not be modified
except by written instrument signed by both parties. This agreement shall be construed in accordance with the
laws of the State of Arizona applicable to agreements wholly performed therein. In the event of any litigation or
other legal proceeding brought against one party by the other based on or arising under this Agreement, the
prevailing party shall be entitled to recover legal fees in addition to any other sums awarded.
11. Special Provisions:
A. TDA shall issue Simms/KE, Twenty Thousand (20,000) shares of Rule 144 restricted common stock in TDA.
B. Notwithstanding anything to the contrary contained herein, KE shall have the option, exercisable at any time
before expiration of the second twelve
(12) month period of the Royalty Period, to elect to receive, in lieu of any future royalty entitlement under
Paragraph 4(a) on Product sales first occurring after the date of any such election, and TDA agrees to issue, two
hundred thousand (200,000) shares of Rule 144 restricted common stock in TDA, which shall be in addition to
those shares issued per Subparagraph C above.
1. Any election by KE shall not effect KE's right to thereafter receive any accrued royalties on Adjusted Gross
Receipts earned or credited to TDA prior to the date of election.
C. In the event of any stock split, reorganization, merger, recapitalization or other similar event, TDA shall make
such adjustment in the number of TDA shares subject to 11 A. and 11 B. above as is required to maintain value.
IN WITNESS WHEREOF, the parties hereunto have set their hands all as of the date and year first above
TEKNIK DIGITAL ARTS, INC. KENTUCKY ELEVEN, INC.
BY: /s/ John Ward By: /s/ Phil Simms
SPONSORSHIP AND DEVELOPMENT AGREEMENT
This Agreement is made as of November 17, 2004 (the "Effective Date") by and between TEKNIK DIGITAL
ARTS INC., a Nevada corporation with offices at 7377 E. Doubletree Ranch Road, Suite 270, Scottsdale,
Arizona 85258 ("TDA") and Buddy Rice Racing, Inc. ("Rice"), c/o
TDA is in the business of developing and publishing interactive entertainment software products. TDA desires to
have Rice assist in the development, endorsement and publicizing of TDA's Indy Racing Type and NASCAR
Type-related software products.
THEREFORE, TDA and Rice agree as follows:
1. DEVELOPMENT, PRODUCTION, COMMERCIAL AND PUBLICITY SERVICES
1.1 General. Rice agrees to cooperate, consult with and aid TDA in connection with the development of TDA's
"Indy Racing Type and NASCAR Type Product" (hereinafter defined) and the advertising, marketing and
publicity thereof. As used herein, the term "Indy Racing Type and NASCAR Type Product" shall mean any
interactive entertainment software product related to the sport of Indy Racing Type and NASCAR Type which is
produced and released during the "Term" (hereinafter defined in Section 6.l) and which may be published in
multiple versions (e.g., versions for play on game consoles, personal computers, handheld mobile devices
(including cell phones), for sale in any and all territories.
2. GRANT OF RIGHTS; COOPERATION
2.1 Publicity Rights. Rice hereby grants to TDA the following rights (the "Rights"):
(a) the right to use and reuse Rice's name, voice, likeness, facsimile signature, personal statistics, biographical
information and any reproduction or simulation thereof ("Rice's Likeness") in TDA's Indy Racing Type and
NASCAR Type Products and on packaging for TDA's Indy Racing Type and NASCAR Type Products in any
fashion, said grant of rights being limited to the world (the "Contact Territory");
(b) the right to use and reuse Rice's Likeness in TDA'S general internal, nonpublic corporate promotional
materials (such as TDA's Annual Report), corporate advertising and in other forms of publicity;
(c) the right to use and reuse Rice's Likeness in and in connection with the marketing, advertising, promoting and
publicizing of TDA's Indy Racing Type and NASCAR Type Products, by any and all means now known or
(d) the exclusive right to use and reuse the results and proceeds of the Services provided in connection with
TDA's Indy Racing Type and NASCAR Type Products; and
(e) with Rice's prior reasonable approval, the right to license to third parties any of the foregoing rights but only in
connection with or directly related to the marketing and sale of TDA's Indy Racing Type and NASCAR Type
Rice agrees to cooperate in good faith with TDA in connection with TDA's exercise of the Rights in accordance
with the terms of this Agreement.
2.2 Limitations of License.
(a) The Rights granted in Section 2.1 above will only be used by TDA in connection with its Indy Racing Type
and NASCAR Type Products. TDA does not have the right to use the Rights in any product whatsoever
released before or after the Term.
(b) TDA shall not utilize Rice's Likeness in a manner that would constitute an endorsement of any product or
service other than TDA's Indy Racing Type and NASCAR Type Products.
2.3 Rice as Featured Player. TDA agrees that Rice will be one of the featured players on all packaging of and
promotional materials related to, TDA's Indy Racing Type and NASCAR Type Product.
2.4 No Obligation to Use. Except as set forth in Section 2.3 above, the payment to Rice of the sums required
under this Agreement shall fully discharge all obligations of TDA to use Rice's Likeness under this Agreement.
2.5 Approvals. TDA agrees that no use of Rice's Likeness in connection with the product concepts or on their
packaging or advertisements, promotions and other related/similar materials will be made hereunder unless and
until the same has been approved by Rice in writing. Rice agrees that any material, advertising or otherwise,
submitted for approval as provided herein may be deemed by TDA to have been approved hereunder if the same
is not disapproved in writing within fourteen (14) days after receipt thereof. Rice agrees that any material
submitted hereunder will not be unreasonably disapproved and, if it is disapproved, that TDA will be advised of
the specified rounds therefore. TDA agrees to protect, indemnify and save harmless Rice and Rice's agents, or
either of them, from and against any and all expenses, damages, claims, suits, actions, judgments and costs
whatsoever, arising out of, or in any way connected with, any advertising material furnished by, or on behalf of,
TDA. TDA will not depict Rice in a disparaging manner in the Products, packaging, or advertising materials.
3.1 Exclusivity Period. During the Term (the "Exclusivity Period"), Rice hereby represents, warrants and agrees
that he will not, other than with regard to any group video game licensing agreements: (i) reader any services in
commercials or advertisements on behalf of any computer game or videogame sports software product or
service, or (ii) authorize the use to Rice's Likeness in connection with any computer game or videogame sports
software product or service. These exclusivity obligations will not limit Rice's right to appear in any of the
entertainment fields or in the entertainment portion of any television, film or video program; provided, however,
that Rice may not appear in, or provide services in connection with, advertisements for any computer game or
videogame sports products. Notwithstanding anything herein to the contrary, this Section 3.1 is specifically
subject to the provisions of Section 2.2 above. Rice's obligations set forth in this Section 3.1, and as limited by
Section 2.2, will be referred to elsewhere in this Agreement as the "Exclusivity Obligations". Notwithstanding
anything herein to the contrary, TDA explicitly agrees that nothing herein shall preclude Rice from participating in,
or in any way limit Rice's participation in, any current or future IRL and/or NASCAR group video game licensing
4.1 Products. TDA will provide to Rice, free of all costs whatsoever
(including without limitation, taxes, duties, shipping and/or handling fees) (a) fifty (50) copies each of TDA's
"Buddy Rice Indy Racing Type and NASCAR Type" game mobile, handheld devices, game console and
personal computer promptly after TDA's release thereof and (b) fifty (50) copies of any other TDA products
selected by Rice.
4.2 Compensation for Rights and Services. TDA agrees to pay Rice, as a consideration for the Rights and
1) 20% royalty of TDA net mobile sales price of Indy Racing Type and NASCAR Type product that will be sold
as a monthly subscription at $2.50 to $3.00 per month less third party (telecom's) distribution/development costs.
These costs average 33% of gross sales price depending on the carrier.
2) 10% of all game console and personal computer game sales on a wholesale basis. For example, if retail price
is $50 and the company sells to distributor for $20, Rice would receive 10% of $20 or $2 per game sold.
3) The option to convert 10% of the royalty agreement as set forth in section 4.2(2) into the following during the
first two years of this agreement:
a. 100,000 Restricted (under Rule 144) common shares TDA, and
b. Warrant to purchase 250,000 shares at $2.50/share for three years from the effective date of this agreement.
All payments due under this Agreement shall be made in the form of a check drawn to the order of "Buddy Rice
Racing, Inc." and delivered to Rice's agent at the following address:
_____________________________________. Payments shall be made 15 days from the end of each quarter.
Rice's net payment after any such charges or deductions shall equal the amount set forth above. Past due
payments hereunder shall bear interest at the rate of (i) one and one-half percent (1-1/2%) per month, or (ii) the
maximum interest rate permissible under law, whichever is less.
4.3 Expenses. First-class round-trip air transportation, hotel room meal expenses, local limousine service and
miscellaneous expenses (e.g., telephone and overnight courier charges) incurred by Rice and a guest designated
by Rice will be paid by TDA or reimbursed by TDA to Rice where necessary in the performance of Rice's
Services under this Agreement; provided, however, that such expenses are required and reasonable for a
celebrity of Rice's stature.
5.1 TDA, the Licensee, shall keep accurate books of account and records at principal place of business covering
all transactions relating to the License granted herein. Rice shall have the right to engage an independent
accounting firm to examine the Licensee's sales information and all other books and records necessary to
establish the accuracy and timeliness of the royalty statements required hereunder. Such examination shall be at
the premises of Licensee on ten
(10) working days written notice and during normal business hours. The information provided to Rice by the
accounting firm will be the net sales and the application of the appropriate royalty rate to calculate royalties due.
The accounting firm shall be required to take reasonable steps to hold all Licensee information confidential.
Details of the review and all work papers and related supporting data pertaining to the review will be held
confidential by the accounting firm and will not be shown, divulged, or delivered directly or indirectly to Rice or
any third party. The accounting firm shall be bound by a non-disclosure agreement in the firm to be provided by
Licensee to ensure compliance with this paragraph. The examination may be conducted not more than once a
year. If it is determined that Licensee has made any Royalty underpayment which is greater than five percent
(5%) for any Royalty Period, the Licensee shall reimburse Rice for the costs and expenses of such audit.
5.2 Upon request by Rice, but not more than once each year, TDA the Licensee, shall, at its own cost, furnish to
Rice within thirty (30) days after such request a detailed statement prepared by Licensees Chief Financial Officer,
setting forth the number of Products manufactured from the later of the commencement of this Agreement or the
date of any previous such statement up to and including the date of Rice's request therefore and also setting forth
the pricing information for all Products (including the number and description of the Products) shipped, distributed
and sold by Licensee during the aforementioned time period.
5.3 All books of account and records of Licensee covering all transactions relating to the Licensee shall be
retained by the Licensee until at least two
(2) years after the expiration or termination of the Term for possible inspection by Rice.
6.1 Term. The term of this Agreement (the "Term"), shall commence on the Effective Date and terminate at the
end of the Exclusivity Period (i.e, a three
(3) year period commencing on the Effective Date).
6.2 Post-Term Sales. Upon expiration of this Agreement, TDA shall cease all uses of the Rights and/or Rice's
Likeness with respect to advertising, endorsing and/or promoting TDA, but TDA shall be free to continue to
distribute and sell its Indy Racing Type and NASCAR Type Products which incorporate Rice's Likeness for up
to 90 days after the expiration of the Term (although TDA may not use the Rights or Rice's Likeness to promote
or advertise TDA or any of TDA's non-Indy Racing Type and NASCAR Type Products when selling the Indy
Racing Type and NASCAR Type Products, nor can TDA highlight Rice's Likeness in its packaging or sales
efforts); provided, however, that TDA shall have no such right of post-Term sales unless TDA is not in default of
any of its obligations hereunder as of the date of expiration or termination.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Representations and Warranties.
(a) Rice represents and warrants that:
(i) Rice has full right to enter into this Agreement and to perform all of his obligations hereunder without, to his
knowledge, violating the legal or equitable rights of any person, firm or entity and that TDA shall not be under any
obligation for the payment of any commissions or fees to any person, firm or entity on account of this Agreement,
other than advances, compensation, royalties and expenses expressly payable to Rice by TDA under this
(ii) Rice will perform the Services in a professional and workmanlike manner, to the extent of Rice's professional
(b) TDA represents and warrants that:
(i) TDA has full right to enter into this Agreement and to perform all of its obligations hereunder without, to its
knowledge, violating the legal or equitable rights of any person, firm or entity and that Rice shall not be under any
obligation for the payment of any commissions or fees to any person, firm or entity related to or connected with
TDA on account of this Agreement.
(c) Notwithstanding anything herein to the contrary, TDA agrees that nothing contained herein shall be construed
to convey to TDA any rights to use the trademarks, logos or uniform of the Indy Racing Type and NASCAR
Type, (IRL and NASCAR) any other professional or amateur Indy Racing Type and NASCAR Type
association (including any member players of such association) in conjunction with the rights granted hereunder.
All rights to the use of such trademarks, logos or team identification must be acquired from the IRL and/or
NASCAR or any other appropriate rights holder.
7.2 Further Assurances and Execution of Documents. Rice will, if requested and reasonable, furnish affidavits and
other appropriate documentation that may be required, in TDA's reasonable judgment and at TDA's expense, to
comply with any applicable governmental or other regulations, broadcast clearance procedures, or
sports/entertainment industry guidelines relating to product endorsement. Furthermore, Rice hereby agrees to
execute any and all documents which are required by any guild or union having jurisdiction over any of the
services to be provided by Rice under this Agreement.
7.3 Confidential Information and Non-Disparagement. Neither party will disclose or use any confidential or
proprietary information that such party obtains from or about the other or its products. Both parties agree that the
existence and results of any arbitration held pursuant to this Agreement will be treated confidentially. Rice will not
authorize or release advertising matter or publicity nor give interviews which make reference to the details of the
material terms of this Agreement, without TDA's prior written approval, although Rice may, during interviews,
respond, discuss and comment in a non-disparaging manner that Rice is associated with TDA and its Indy Racing
Type and NASCAR Type Products.
8. OWNERSHIP OF PROPRIETARY RIGHTS
8.1 All right, title and interest in and to TDA's Indy Racing Type and NASCAR Type Products shall be and
remain the absolute property of TDA forever (it being understood that after the Term TDA may continue to
manufacture, promote, sell and/or distribute its other Indy Racing Type and NASCAR Type interactive
entertainment sports products which are separate and distinct from the Indy Racing Type and NASCAR Type
Products incorporating Rice's Likeness on the packaging without being subject to any of the limitations or
restrictions herein, provided that the Rights are not (directly or indirectly) utilized by or incorporated in such other
Indy Racing Type and NASCAR Type interactive sports products. All right, title and interest in and to the
Results and Proceeds and to the Advertising Materials (as defined below) shall be and remain the absolute
property of TDA forever (but which may only be used during the Term and, subject to the limitations and
conditions set forth in this Agreement, thereafter). Without limiting the foregoing, TDA shall, during the Term
(and, subject to the limitations and conditions on the Rights as set forth in this Agreement, thereafter) have the full
and complete right to revise, telecast, broadcast, use, distribute, reproduce, record, publish, print, license,
copyright and exhibit the contents of any Results and Proceeds, the Indy Racing Type and NASCAR Type
Products and any Advertising Materials and any versions or revisions thereof and, in TDA's sole discretion, the
Results and Proceeds, the Indy Racing Type and NASCAR Type Products and Advertising Materials may be
made by any process, instrumentation or device now known or hereafter developed and may be made or
adapted for use in any and all media now known or hereafter developed (although it is acknowledged and agreed
by TDA that multi-media usage (except, of course, as
incorporated into TDA's Indy Racing Type and NASCAR Type Products) shall be strictly limited to advertising)
provided that any and all such uses are directly related to the marketing, development and sale of TDA's Indy
Racing Type and NASCAR Type Products. Rice further acknowledges that TDA may adapt and use, and
protect by any means including registration with the appropriate authorities, a trademark or trade name
incorporating Rice's Likeness, and that Rice shall, until after the Term, have no right, title or interest in or to any
such trademark, trade name or related goodwill. As used in this Agreement, "Advertising Material" means any
commercials, print materials, copy, advertising, promotional and publicity materials published under this
Agreement which include or make reference to Rice's Likeness and all elements thereof.
8.2 Notwithstanding anything herein to the contrary and only with Rice's approval, TDA agrees not to use the
trademarks and logos of Rice's equipment manufacturer from the packaging of TDA's Indy Racing Type and
NASCAR Type Products and/or the Advertising Materials.
9.1 By TDA. TDA shall indemnify and hold harmless Rice, Rice's agent, and Rice's heirs, executors and legal
representatives from and against any and all damages, costs, judgments, penalties and expenses of any kind
(including reasonable legal fees and disbursements) which may be obtained against, imposed upon or suffered by
any of them as a result of (a) any claims or representations made by Rice in any Advertising Materials produced
or used by TDA hereunder, (b) TDA's default, breach, negligence, errors and/or misconduct hereunder, and/or
(c) any claim arising from any third party's use or association with TDA's products.
9.2 Insurance. TDA shall arrange for Rice to be named as an insured on the Company's $1,000,000 product
liability insurance policy before the product is released.
10.1 Taxes. Rice represents and warrants that, in performing its obligations under this Agreement, Rice does so
as an independent contractor and, without limiting the foregoing, Rice assumes exclusive responsibility for the
collection and payments of all employer and employee contributions and taxes under all applicable laws now in
effect or hereafter enacted and Rice further agrees to file any returns or reports necessary in connection
therewith. TDA shall have the right to deduct from any amounts payable hereunder such portion thereof as are
required to be deducted under applicable statute, regulation, treaty or other law, and Rice shall promptly execute
and deliver to TDA such forms and other documents as may be required in connection therewith.
10.2 Notices. All notices and statements hereunder required to be given to TDA shall be sent to TIDA at its
address stated at the beginning of this Agreement, to the attention of the General Counsel, and all notices to Rice
shall be sent to Rice at the address stated at the beginning of this Agreement, unless either party notifies the other
party in writing if a change of address in accordance with the provisions of this Section. Notices are deemed to
be received by the addressee of the notice on the earlier or the date the notice is actually delivered to the
addressee and: (i) three (3) days after the notice is sent by certified mail, postage prepaid, return receipt
requested; (ii) the next business day after the notice is sent by confirmed fax transmission; or (iii) on the date of
guaranteed delivery if the notice is sent by recognized national or international express courier.
10.3 Right of Offset. Notwithstanding any provision contained in this Agreement, neither party will be prohibited
from exercising any right of offset that may be available at law.
10.4 Governing Law. This Agreement will be deemed entered into in Arizona and will be governed by and
interpreted in accordance with the internal substantive laws of the State of Arizona without reference to conflicts
of law provisions.
10.5 Entire Agreement. This Agreement constitutes the entire understanding between the parties hereto with
respect to the subject matter hereof, and all prior agreements and understandings, whether oral or written, are
hereby superseded in their entirety. No waiver, modification or addition to this Agreement shall be valid unless in
writing and signed by the party sought to be charged therewith.
10.6 Assignment. This Agreement may be assigned by Rice and TDA with the other party's prior written
approval. Except with Rice's prior written approval, this Agreement may not be assigned by TDA: (i) in
connection with a merger, a sale of all or substantially all of the assets of TDA or other similar corporate
reorganization, or the sale of substantially all of TDA's rights to all of its Indy Racing Type and NASCAR Type
Products; or (ii) to an affiliated, parent, subsidiary, related company (or in the case of the production of
Advertising Materials to an advertising agency representing TDA) so as to effectuate the intent of this Agreement
and the subject matter hereof, although TDA will continue to be liable for all financial obligations hereunder.
10.7 Severability. Should any provision of this Agreement be held to be void, invalid or inoperative, such
provision will be enforced to the extent permissible and the remaining provisions of this Agreement will not be
10.8 Attorney's Fees. In any suit, arbitration or other proceeding under this Agreement, the prevailing party will
be entitled to recover its reasonable fees and expenses of attorneys and other professionals, including all fees and
expenses of appeal and enforcement.
10.9 Liability. In no event (including, but not limited to, Rice's default hereunder) shall Rice be liable to TDA (or
any entity claiming through TDA) for any amount in excess of the amounts actually received by Rice hereunder,
excluding the reimbursement of expenses. Under no circumstances will Rice be liable to TDA or any other entity
for any special, consequential, indirect, exemplary and/or punitive damages, or for loss of good will or business
10.10 Applicable Law and Disputes. This Agreement shall be governed by the laws of the State of Arizona
applicable to agreements fully executed and performed therein. Any claims arising hereunder or relating hereto
shall be prosecuted only in the appropriate court of the State of Arizona or in the applicable United States District
Court and neither party shall make any claim or demand in any other jurisdiction forum. Each party waives its
right to a trial by jury and agrees to the jurisdiction of the judge in the appropriate court as governed by the State
of Arizona. The parties consent to the personal jurisdiction of such courts and to the service of process by mail.
10.11 Force Majeure. If at any time during this Agreement, Rice or TDA is prevented from or hampered or
interrupted or interfered with in any manner whatever in fully performing their respective duties hereunder by
reason of any present or future statute, law, ordinance, regulation, order, judgment or decree, whether legislative,
executive or judicial (whether or not valid), act of God, earthquake, flood, fire, epidemic, accident, explosion,
casualty, lockout, boycott, strike, labor controversy (including, but not limited to threat of lockout, boycott or
strike), riot, civil disturbance, war or armed conflict (whether or not there has been an official declaration of war
or official statement as to the existence of a state of war), invasion, occupation, intervention or military forces, act
of public enemy, embargo, delay of a common carrier, inability without fault of such party to obtain sufficient
material, labor, transportation, power or other essential commodity required in the conduct of business; or by
reason of any event beyond any of the foregoing parties' reasonable control (e.g., illness, family emergency, etc.);
or by reason of any other cause or causes of any similar nature (all of the foregoing being herein referred to as an
"event of force majeure"), then the applicable party's obligations hereunder hereunder shall be suspended as often
as any such event of force majeure occurs and during such periods of time as such events of force majeure exist
and such non-performance shall not be deemed to be a breach of this Agreement.
10.12 Reservation of Rights. All rights not herein specifically granted to TDA shall remain the property of Rice to
be used in any manner Rice deems appropriate. TDA understands that Rice has reserved the right to authorize
others to use Rice's Likeness within the Contract Territory and during the Term in connection with all tangible and
intangible items and services other than TDA's Indy Racing Type and NASCAR Type Products as specifically
set forth herein.
IN WITNESS WHEREOF, the parties hereby execute this Agreement as of the Effective Date by signing below:
TEKNIK DIGITAL ARTS INC. BUDDY RICE RACING, INC.
By: /s/ John Ward By: /s/ Buddy Rice
Name: John Ward Name: Buddy Rice
Title: Chairman Title:
Date: November 17, 2004 Date: November 17, 2004
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") made as of February 23, 2005, by and
among TEKNIK DIGITAL ARTS INC., a Nevada corporation ("Borrower") and CODEFIRE
ACQUISITION CORP., a California corporation ("Lender").
Borrower and Lender agree as follows:
1. The Revolving Credit. Lender agrees, subject to the terms and conditions hereof, to lend to Borrower from
time to time from the date hereof until February 23, 2006 (unless the Note is accelerated or terminated earlier
than such date) (the "Commitment Period"), such sums (the "Advances") not to exceed $1,000,000 in the
aggregate at any one time outstanding (the "Credit") as Borrower may request from time to time. The Credit is
subject to the terms and conditions of this Agreement and the Revolving Credit Note (the "Note"), which,
together with this Agreement, evidences the Credit. The Note shall be in the form attached hereto as Exhibit A.
2. Proceeds of the Credit are to be used for the general corporate purposes of Borrower. Reduction of Credit.
Borrower shall have the right, upon at least thirty (30) business days notice to Lender, to terminate in whole or
reduce in part the unused portion of the Credit; provided that no reduction shall be permitted if, after giving effect
thereto, and to any prepayment made therewith, the outstanding and unpaid principal amount of the Advances
shall exceed the Credit. The Credit once reduced or terminated may not be reinstated.
3. Conditions to all Loans. The obligation of Lender to make any Advance is subject to its satisfaction of the
following conditions precedent:
(a) Delivery of Note. Borrower shall have delivered the Note to Lender, properly executed by Borrower.
(b) No Event of Default. No event of default caused by Borrower under this Agreement or the Note shall have
occurred and be continuing on the date the Advance is to be made or after giving effect to the Advance to be
(c) Borrowing Certificate. Lender shall have received a signed, completed borrowing request from Borrower in
the form of Exhibit B hereto as provided in the Note. Such borrowing certificate signed by Borrower shall
constitute a request for an Advance by Borrower and shall be binding on Borrower. Borrower shall give Lender
at least [five (5)] business days notice of any Advance under this Agreement.
(d) Representations and Warranties. The representations and warranties of Borrower contained in this
Agreement shall be true and correct in all material respects as of the date of each Advance.
4. Repayment of Advances. All Advances, if not earlier repaid, shall be repaid to Lender by the last business day
in the relevant Commitment Period.
5. Interest. Borrower agrees to pay Lender interest on the unpaid principal amount from time to time outstanding
under this Agreement, in arrears, at a rate equal the lesser of (i) seven percent (7%) per annum or (ii) the highest
lawful rate permissible under any applicable law. Interest shall be computed as simple interest. Interest shall be
paid in immediately available funds on the [first (1st)] business day of each [month] and at maturity of the relevant
6. Prepayments. Borrower may upon at least thirty (30) days notice to Lender, prepay the Note in whole or in
part with accrued interest to the date of such prepayment on the amount prepaid.
7. Method of Payment. Borrower shall make each payment under this Agreement and under the Note not later
than 5:00 p.m. Arizona time on the date when due in lawful money of the United States to the bank account
specified in writing to Borrower by Lender in immediately available funds.
8. Extension of Commitment Period. Borrower may, at least thirty (30) days before the end of the Commitment
Period then in effect, request in writing to Lender that the Commitment period be extended one (1) year to the
anniversary date next following the last day of the Commitment Period then in effect. Lender shall not be
obligated to grant Borrower any such extension. If any such extension is granted by Lender, Borrower shall
execute and deliver an amended and restated Note reflecting such extension.
9. Representations and Warranties. Borrower makes the following representations and warranties, all of which
shall be deemed to be continuing representations and warranties so long as any part of the Credit is unpaid or any
commitment of Lender to make Advances exists hereunder.
(a) Good Standing and Authority of Borrower. Borrower is duly organized, validly existing and in good standing
under the laws of the state of its incorporation. Borrower has corporate power and authority to transact the
business in which it is engaged; is duly licensed or qualified and in good standing in each jurisdiction in which the
conduct of business or ownership of property requires such licensing or such qualification, except where the
failure to be so licensed or qualified could not reasonably be expected to have a material adverse effect on the
business or financial condition of Borrower; and has all necessary corporate power and authority to enter into this
Agreement and to execute, deliver and perform this Agreement, the Note and any other document executed in
connection with this Agreement to which it is a party, all of which have been duly authorized by all proper and
necessary corporate and shareholder action, as appropriate. This Agreement and the Note constitute the legal,
valid and binding obligations of Borrower, enforceable in accordance with their respective terms. To the
knowledge of Borrower, after reasonable review and consideration, the execution and delivery of this Agreement
and the Note is not and will not be in violation of any agreement to which Borrower is a party (except for any
violation which would not have a material adverse effect on Borrower), and no consent of any kind is required for
Borrower to enter into or perform this Agreement or to execute and deliver the Note.
(b) Financial Condition. Borrower has the financial resources or can obtain the necessary financing to meet its
debt obligations under this Agreement and the Note.
(c) Litigation. There are no actions, suits, proceedings or investigations pending or, to the knowledge of
Borrower, threatened against Borrower, which could reasonably be expected to, in any case or in the aggregate,
materially adversely affect the property, assets, financial condition or business of Borrower taken as a whole.
10. Covenants. So long as any part of the Credit is unpaid, or there exists any commitment of Lender to make
(a) Future Financial Statements. Borrower will furnish or cause to be furnished to Lender: (i) within 45 days after
the end of each quarter, including the last quarter of any fiscal year, an unaudited financial statement, in
consolidated form under GAAP, of Borrower as of the end of such and as of the end of each month in such
quarter, which statement shall consist of a balance sheet, and related statements of income and retained earnings,
covering the period from the end of Borrower's immediately preceding fiscal year to the end of such quarter,
certified to be correct in all material respects by the President or Chief Financial Officer of Borrower, subject to
such year-end accounting adjustments as are normal and customary; and (ii) within 120 days after the end of
each of its fiscal years, a financial statement of Borrower, which shall consist of a balance sheet, and related
statements of income and retained earnings, covering the period of Borrower's immediately preceding fiscal year,
and which shall be audited by independent certified public accountants reasonably satisfactory to Lender, and in
consolidated form under GAAP.
(b) Taxes. Borrower will promptly pay and discharge all of its taxes, assessments and other governmental
charges (including any charged or assessed on the issuance of the Note) prior to the date on which material
penalties are attached thereto, establish adequate reserves for the payment of taxes and assessments and make all
required withholding and other tax deposits; provided, however, that nothing contained herein shall require
the payment of any tax assessment or charge so long as its validity is being contested in good faith and by
appropriate proceedings diligently conducted.
(c) Litigation. Borrower will promptly notify Lender in writing as soon as Borrower has knowledge of the
institution or filing of any material litigation, or governmental or regulatory proceeding against, or investigation of,
Borrower: (i) the outcome of which may reasonably be expected to materially and adversely affect the finances or
operations of Borrower or Borrower's ability to fulfill its obligations hereunder; or (ii) which questions the validity
of this Agreement, the Note or any action taken or to be taken pursuant thereto; and furnish or cause to be
furnished to Lender such information regarding any such matter as Lender may request.
(d) Corporate Standing; Business. Borrower will maintain its corporate existence in good standing and remain or
become duly licensed or qualified and in good standing in each jurisdiction in which the conduct of its business or
ownership of its property requires such qualification or licensing.
(e) Other Acts. Borrower will execute and deliver, or cause to be executed and delivered, to Lender all further
documents and perform all other acts which Lender reasonably deems necessary or appropriate to protect the
11. Events of Default. The occurrence of any one or more of the following events shall constitute an event of
default ("Event of Default"):
(a) Nonpayment. Nonpayment within five business days of when due, whether by acceleration or otherwise, of
principal of or interest on the Note or of any cost or expense provided for in this Agreement.
(b) Covenants. Default in the observance of covenants or agreements contained in this Agreement, which is not
remedied within thirty (30) days after written notice thereof by Lender to Borrower.
(c) Financial Condition. The filing by or against Borrower of a request or petition for liquidation, reorganization,
arrangement adjustment of debts, adjudication as a bankrupt, relief as a debtor or other relief under the
bankruptcy, insolvency or similar laws of the United States or any state or territory thereof or any foreign
jurisdiction, now or hereafter in effect (but in the case of a filing against Borrower, only if such filing is not vacated
or bonded within sixty (60) days of filing); the making of any general assignment by Borrower for the benefit of
creditors; the appointment of a receiver or trustee for Borrower or for any assets of any of them, including,
without limitation, the appointment of or taking possession by a "custodian," as defined in the Federal Bankruptcy
Code; or the institution by or against Borrower of any other type of insolvency proceeding (under the Federal
Bankruptcy Code or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against or winding up of affairs of Borrower (but in the case of a proceeding instituted against
Borrower, only if such proceeding is not vacated or bonded within sixty (60) days of such institution).
(d) Business; Judgments. The cessation of Borrower as a going business concern; the entry judgment against
Borrower in an amount in excess of $5,000,000.00, other than a judgment for which Borrower is fully insured, if
thirty (30) days after entry of judgment, such judgment is not satisfied, vacated, bonded or stayed pending
appeal; or if Borrower is generally not paying its debts as such debts become due.
(e) Representations. If any certificate, statement, representation, warranty or audit heretofore or hereafter
furnished by or on behalf of Borrower pursuant to or in connection with this Agreement, or as an inducement to
Lender to extend the Credit to, or to enter into this or any other agreement with Borrower proves to have been
false in any material respect at the time as of which the facts therein set forth were stated or certified, or to have
omitted any substantial and material contingent or unliquidated liability or claim against Borrower.
(f) Other Indebtedness. Nonpayment by Borrower when due of any indebtedness for borrowed money owing to
any party other than Lender and such failure continues after any applicable grace or notice period, or the
occurrence of any event which permits the acceleration of payment of any such indebtedness except where such
nonpayment would not have a material adverse effect on the Borrower.
12. Acceleration. Upon the happening of an Event of Default specified in subsection (f), above, any obligation of
Lender to make Advances shall cease immediately, and the Note shall become immediately due and payable,
without presentation, demand or notice of any kind to Borrower. Upon the happening of any other Event of
Default, Lender may, upon notice to Borrower, terminate any obligation of Lender to make Advances and
the Note immediately due and payable, without presentation, demand or further notice of any kind to Borrower.
Notwithstanding the foregoing, any acceleration herein shall be subject to any applicable grace periods provided
for in this Agreement.
13. Expenses. Borrower shall reimburse Lender promptly for all of its reasonable and documented out-of-pocket
costs and expenses incurred in connection with the Credit including, without limitation, filing fees, recording fees,
any taxes which Lender may be required to pay in connection with the execution and delivery of this Agreement
and the Note, and any costs and expenses incident to the enforcement of any provision of this Agreement or the
Note. "Costs and expenses" as used in the preceding sentence shall also include, without limitation, the
reasonable outside attorneys' fees incurred by Lender in retaining counsel in connection with the preparation or
execution of this Agreement; for advice, suit, appeal, any insolvency or other proceedings under the Federal
Bankruptcy Code or otherwise; or for any other purpose related to the Credit.
(a) Amendments and Waivers. No modification, rescission, waiver, release, or amendment of any provision of
this Agreement shall be made except by a written agreement signed by a duly authorized officer of Borrower and
a duly authorized officer of Lender.
(b) Delays and Omissions. No delay or omission by Lender in exercising any right or remedy hereunder or with
respect to the Credit shall operate as a waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
Lender may remedy any default by Borrower hereunder or with respect to the Credit in any reasonable manner
without waiving the default remedied and without waiving any other prior or subsequent default by Borrower, and
shall be reimbursed for its expenses in so remedying such default. All rights and remedies of Lender hereunder,
under any other agreement and otherwise are cumulative; if any provision of this Agreement is inconsistent with
any provision of any other agreement between Lender and Borrower, the provisions of this Agreement shall
(c) Successors and Assigns. Borrower and Lender as used herein shall include the legal representatives,
successors, and assigns of those parties. Notwithstanding the foregoing, Borrower may not assign or transfer this
Agreement, the Note, or any rights under the Note or this Agreement without the prior written consent of Lender.
(d) Notices. All notices, requests, demands and other communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to have been duly given when received if personally
delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method; the day after it is
sent, if sent for next day delivery to a domestic address by recognized overnight delivery service (e.g., Federal
Express); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice
shall be sent to:
If to Lender, addressed to:
CodeFire Acquisition Corp.
3104 East Camelback Road #509
Phoenix, Arizona 85016
Attention: Kristine Ward
Fax: (602) 485-8782
If to Borrower, addressed to:
Teknik Digital Arts Inc.
c/o Corporation Trust Company of Nevada 6100 Neil Road, Suite 500
Reno, Nevada 89511
Attn: John Ward
Fax: (480) 443-3879
with a copy to:
Squire, Sanders & Dempsey L.L.P. Two Renaissance Square
40 North Central Avenue, Suite 2700 Phoenix, Arizona 85004
Attention: Gregory R. Hall, Esquire Fax: (602) 253-8129
or to such other place and with such other copies as either party may designate as to itself by written notice to the
(e) Generally Accepted Accounting Principles. Any financial calculation to be made, and books and records to
be kept, in connection with the provisions of this Agreement shall be in accordance with generally accepted
accounting principles consistently applied each year and from year to year.
(f) Severability. The invalidity, illegality or unenforceability of any provision of this Agreement shall not affect or
impair the validity, legality or enforceability of the remainder of this Agreement, and to this end, the provisions of
this Agreement are declared to be severable.
(g) Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the
substantive laws (other than conflict laws) of the State of Arizona.
(h) Arbitration. Any controversy arising out of or relating to this Agreement shall be settled by arbitration
conducted in Phoenix, Arizona in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The award rendered by the arbitrator(s) shall be final and judgment upon the award
rendered by the arbitrator(s) may be entered upon it in any court having jurisdiction thereof. The arbitrator(s)
shall possess the powers to issue mandatory orders and restraining orders in connection with such arbitration.
The expenses of the arbitration shall be borne by the losing party unless otherwise allocated by the arbitrator(s).
The agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. During the
continuance of any arbitration proceedings, the parties shall continue to perform their respective obligations under
THE PARTIES HERETO have signed this Agreement on the date written above.
CodeFire Acquisition Corp.
By: /s/ Kristine Ward
Name: Kristine Ward
Teknik Digital Arts Inc.
By: /s/ John Ward
Name: John Ward
Its: hief Executive Officer
EXHIBIT A TO THE REVOLVING CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
February 23, 2005
Due: March 1, 2006
1. Promise to Pay. FOR VALUE RECEIVED, TEKNIK DIGITAL ARTS INC., a Nevada corporation
("Borrower"), promises to pay to the order of CODEFIRE ACQUISITION CORP., a California corporation
("Lender"), the sum not to exceed of One Million Dollars ($1,000,000.00), or so much thereof as may be from
time to time outstanding, together with all other amounts added thereto pursuant to this Note or otherwise
payable to Lender (together, the "Loan"), together with default interest thereon (if any) as hereinafter set forth,
payable in lawful money of the United States of America. Payments shall be made to Lender at such address or
account as Lender may hereafter designate in writing to Borrower.
2. Revolving Loan. This Note evidences a revolving credit, all or any part of which may be advanced to
Borrower, repaid by Borrower, and readvanced to Borrower from time to time, subject to the other provisions
hereof and the provisions of the Revolving Credit Agreement (the "Credit Agreement"), dated as of February 23,
2005, by and between Borrower and Lender provided that the principal balance outstanding hereunder at any
one time shall not exceed $1,000,000.00.
3. Interest. Borrower promises to pay interest on the unpaid principal amount of each Advance (as defined in the
Credit Agreement) evidenced hereby from the date of such Advance until the principal amount is paid in full, at
such interest rates, and payable at such times, as are specified in the Credit Agreement.
4. Repayment of Advances. Borrower promises to pay the principal of any Advance at such times and on such
dates as specified in the Credit Agreement.
5. Governing Law; Severability. This Note shall be governed by and construed in accordance with the internal
laws of the State of Arizona, without regard to conflicts of laws principles. The invalidity, illegality or
unenforceability of any provision of this Note shall not affect or impair the validity, legality or enforceability of the
remainder of this Note, and to this end, the provisions of this Note are declared to be severable.
6.1 Amendments. This Note may not be terminated or amended orally, but only by a termination or amendment
in writing signed by Lender.
6.2 Lawful Rate of Interest. In no event whatsoever shall the amount of interest paid or agreed to be paid to
Lender pursuant to this Note exceed the highest lawful rate of interest permissible under applicable law.
6.3 Waivers. Borrower hereby waives grace, diligence, presentment, demand, notice of demand, dishonor,
notice of dishonor, protest, notice of protest, any and all exemption rights against the indebtedness evidenced by
this Note and the right to plead any statute of limitations as a defense to the repayment of all or any portion of this
Note, and interest thereon, to the fullest extent allowed by law. No delay, omission and/or failure on the part of
the Lender in exercising any right and/or remedy hereunder shall operate as a waiver of such right and/or remedy
or of any other right and/or remedy of Lender.
6.4 Captions. The captions of the Sections of this Note are for convenience of reference only and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions hereof.
6.5 Notices. Notices shall be given under this Note in conformity with the terms and conditions of the Credit
6.6 Time of Essence. Time is of the essence of this Note and the performance of each of the covenants and
agreements contained herein.
6.7 Arbitration. Any controversy arising out of or relating to this Note shall be settled by arbitration conducted in
Phoenix, Arizona in accordance with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. The award rendered by the arbitrator(s) shall be final and judgment upon the award rendered by
the arbitrator(s) may be entered upon it in any court having jurisdiction thereof. The arbitrator(s) shall possess the
powers to issue mandatory orders and restraining orders in connection with such arbitration. The expenses of the
arbitration shall be borne by the losing party unless otherwise allocated by the arbitrator(s). The agreement to
arbitrate shall be specifically enforceable under the prevailing arbitration law. During the continuance of any
arbitration proceedings, the parties shall continue to perform their respective obligations under this Note.
IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same to be executed by its duly
authorized representatives as of the date set first forth above.
TEKNIK DIGITAL ARTS INC.
EXHIBIT B TO THE REVOLVING CREDIT AGREEMENT
FORM OF ADVANCE REQUEST
CodeFire Acquisition Corp.
3104 East Camelback Road #509
Phoenix, Arizona 85016
Dear Ladies and Gentlemen:
The undersigned, Teknik Digital Arts Inc. ("Borrower") refers to the Revolving Credit Agreement dated as of
February 23, 2005 (as it may hereafter be amended, modified, extended or restated from time to time, the
"Credit Agreement") by and between Borrower and CodeFire Acquisition Corp., a California corporation.
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
Borrower hereby gives notice that it requests an Advance pursuant to the Credit Agreement and sets forth below
the terms of such requested Advance:
A. Date of Advance _______________
B. Principal Amount of Advance _______________
TEKNIK DIGITAL ARTS INC.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Teknik Digital Arts Inc. Amendment No. 3 to the registration statement, on
Form SB-2, of our report dated December 30, 2004, accompanying the consolidated financial statements of
Teknik Digital Arts Inc. for the fiscal year ended September 30, 2004 and for the period from the date of
inception, January 29, 2003 through September 30, 2003, which is part of the registration statement, and to the
reference to us under the heading “Experts” in such registration statement.
/s/ Semple & Cooper, LLP
Certified Public Accountants
March 1, 2005