exv10w7



 





Exhibit 10.7




August 15, 2006




PERSONAL AND CONFIDENTIAL 




Mr. John Ward

Chief Executive Officer

Teknik Digital Arts, Inc.

7518 Elbow Bend Road, Suite B-9

P. O. Box 2800-314

Carefree, Arizona 85377



Dear Mr. Ward:



This letter (“Consulting Agreement”) confirms that Alare Capital Partners, LLC (“Alare”, “we” or
“our” or “us”) has been engaged by Teknik Digital Arts Inc., a Nevada corporation, its
subsidiaries, successors or affiliates (the “Company”, “you”, or “your”), to act as your consultant
for the purpose of rendering to you business advice and other services in such capacity, on the
terms and conditions hereinafter set forth. Our engagement shall become effective as of the date
set forth above.



1. Financial Advice



In exchange for the fee described below, you have asked us to provide strategic advisory and
business planning services regarding the Company. We will make ourselves available at the Company’s
office, our offices, or another mutually agreeable location, during normal business hours, for
reasonable periods of time, subject to reasonable advance notice and mutually convenient
scheduling. We will also make ourselves available for telephone conferences with the principal
officer of the Company during normal business hours.



2. Confidentiality



Alare will treat as confidential and will not, without your prior written consent, disclose to any
third party any confidential information provided to Alare by you. Notwithstanding the foregoing,
the terms of this Paragraph 2 shall not apply to any information which is or becomes generally
available to the public, is required by law to be disclosed, or is obtained from any third party
which is in possession of such information through no fault of the disclosing party and is not
under any obligation, to the disclosing party’s knowledge, to treat such information as
confidential.



3. Term



The term of the Agreement will be for 12 months unless terminated sooner. This Agreement may be
renewed upon mutual, written agreement of the parties. Either party may terminate this Agreement at
any time by delivering notice 30 days prior to the termination date.




 









 








4. Fee for Advisory Services





	 	A.	 	In consideration of the services that Alare has agreed to perform, upon
execution of this Agreement, the Company will pay Alare ten thousand dollars ($10,000)
for Alare’s work during the first ninety (90) days of this Agreement. Following the
expiration of the first ninety (90) days, and the Company have successfully raised a
minimum of $1,500,000, the Company will pay ten thousand dollars ($10,000) at the
beginning of each month for the duration of the Term of this Agreement. In addition
for providing these Services, TKNK shall pay ALARE $120,000 in the form of
unregistered shares of common stock (141,176 shares) upon the execution of this
Corporate Finance and Consulting Agreement. I1I2’h of the shares (11,765) shall vest
each month during the term of this Agreement. One year holding period starts on the
day the shares are issued.
	 
	 	B.	 	In the event that this Agreement is terminated, any unvested shares as of the
termination date will be returned to TKNK.
	 
	 	C.	 	In consideration for the services to be provided herein, TKNK agrees that it
will remit the agreed-upon stock certificate within five (5) days of both parties
executing this Agreement.




5. Expenses



You hereby
agree to reimburse Alare for all agreed upon reasonable and customary out-of-pocket
expenses paid or incurred by us and submitted on written vouchers. Written approval is required for
any expense exceeding five hundred dollars ($500). All moneys payable pursuant to this paragraph
are in addition to the Advisory Fee payable pursuant to this Engagement Letter.



6. Legal Compliance



The Company understands and agrees that Alare is not a registered broker-dealer, and will not
advise the Company on the value of securities, discuss the Company with potential investors, offer
or sell any securities, or otherwise engage in activities that may only be performed by registered
broker-dealers. To the extent that the Company refers to Alare when discussing its business affairs
with third parties, the Company warrants that it will not refer to Alare as a broker-dealer or
investment banker, and will not state or imply that Alare is providing services that could only be
provided by a registered broker-dealer.



7. Miscellaneous





	 	A.	 	Governing Law; Venue. This Agreement shall be governed and construed in
accordance with the internal laws of the State of Arizona, without any references to
its conflicts of law principles, and the courts of the State of Arizona shall have
exclusive jurisdiction over any matters arising pursuant to this Agreement. The
parties intend for this forum selection clause to be mandatory.




 









 












	 	B.	 	Entire Understanding. This Agreement contains the entire understandings
between the Company and Alare with reference to the subject matter hereof and
supersedes any prior understandings and agreements related thereto, whether
written or oral. This Agreement may be executed in one or more counterparts, which
together shall constitute a binding agreement. A signed facsimile will create and
constitute an original, legally binding agreement on the party sending the same.
	 
	 	C.	 	Amendment. This Agreement can only be amended by a written document
signed by both parties.
	 
	 	D.	 	Cost of Obtaining Benefits. The prevailing party shall reimburse the
losing party for any legal fees, retainers, and expenses incurred by the
prevailing party in obtaining the benefits to which it is entitled under the terms
of this Agreement.
	 
	 	E.	 	Severability. If any provisions of this Agreement, or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Engagement Letter, or the application of such provisions to
persons or circumstances other than those to which it is held invalid, shall not
be affected thereby.
	 
	 	F.	 	Headings. The text in the headings of paragraphs and subparagraphs of
this Agreement are for convenience of identification only and do not constitute a
part of any such paragraph and/or subparagraph.




If the foregoing constitutes the agreement and understanding of the Company, please confirm your
agreement by signing and returning one copy of this Agreement to the undersigned, whereupon this
agreement shall become binding between you and Alare as of the date first above written.




Sincerely,




Alare Capital Partners, LLC




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Troy L. Anderson
	 	 
	 

	 	Senior Managing Director	 	 






Accepted and agreed.

Teknik Digital Arts Inc.




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

John Ward
	 	 
	 

	 	Chief Executive Officer