CONVERTIBLE PROMISSORY NOTE

Exhibit 10.3

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAYBE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.

CONVERTIBLE PROMISSORY NOTE

     For value received, Teknik Digital Arts, Inc., a Nevada corporation (the " Company" ), promises to pay to                                          (the "Holder "), the principal sum of                                          Dollars ($                      .00). Interest shall accrue from the date of this Note on the unpaid principal amount at a rate equal to Eight percent (8%) per annum. This Note is issued pursuant to that certain Convertible Promissory Note Purchase Agreement of even date herewith (the " Note Purchase Agreement "). This Note is subject to the following terms and conditions.

      1.  Maturity. Unless converted as provided in Section 2, this Note will automatically mature and be due and payable on June 1, 2008 (the " Maturity Date" ). Subject to Section 2 below, interest shall accrue on this Note but shall not be due and payable until the Maturity Date with all accrued and unpaid interest payable in shares of the Company’s common stock at the conversion price set forth below. Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company.

      2.  Conversion.

           (a) Investment by the Holder . The lesser of (i) the entire principal amount of and (at Holder’s option) accrued interest on this Note, or (ii) $30,000 increments of principal, may be converted by the Holder at any time into shares of the Company’s common stock, par value $.001 per share (the " Common Stock" ), at a purchase price per share of $.75 (the " Conversion Price "), subject to adjustment. The number of shares of Common Stock to be

issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus (if applicable) accrued interest by (ii) $.75, the price per share of the Common Stock, rounded to the nearest whole share, and the issuance of such shares upon such conversion shall be upon the terms and subject to the conditions set forth herein and in the Note Purchase Agreement.

           (b) Mechanics and Effect of Conversion . No fractional shares of the Company’s capital stock will be issued upon conversion of this Note. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company will pay to the Holder in cash the amount of the unconverted principal and interest balance of this Note that would otherwise be converted into such fractional share. Upon conversion of this Note pursuant to this Section 2, the Holder shall surrender this Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company. At its expense, the Company will, as soon as practicable thereafter, issue and deliver to such Holder, at such principal office, a certificate or certificates for the number of shares to which such Holder is entitled upon such conversion, together with any other securities and property to which the Holder is entitled upon such conversion under the terms of this Note, including a check payable to the Holder for any cash amounts payable as described herein. Upon conversion of this Note, the Company will be forever released from all of its obligations and liabilities under this Note with regard to that portion of the principal amount and accrued interest being converted including without limitation the obligation to pay such portion of the principal amount and accrued interest.

           (c) Payment of Interest. Upon conversion of the principal amount of this Note into shares of the Company’s capital stock, any interest accrued on this Note that is not by reason of Section 2(a) hereof simultaneously converted into Common Stock shall be immediately paid to the Holder.

      3.  Adjustment to Conversion Price. If at any time subsequent to the date hereof the Company issues additional shares of Common Stock, or other stock convertible into or exchangeable for Common Stock (" Additional Common Stock" ) for a price per share that is less than the Conversion Price in effect immediately prior to the time of such issuance or sale, then upon such issuance or sale the Conversion Price in effect immediately prior to such issuance for which this Note is convertible to Common Stock will be automatically adjusted to such lower per share price. No adjustment shall occur with respect to the issuance of Common Stock pursuant to any securities of the Company outstanding as of the date of this Note or pursuant to any options granted to the Company’s employees, officers or directors, whether or not such options are existing as of the date of this Note or granted thereafter. In no event shall the Conversion Price be increased above $.75 per share.

      4.  Adjustment to Exercise Price . The Exercise Price shall be adjusted to equal (i) the Conversion Price for which this Note is exercisable prior to the adjustment; (ii) multiplied by a fraction, (x) the numerator of which is the sum of the number of shares of Common Stock outstanding immediately prior to the issue or sale plus the number of shares of Common Stock

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which the aggregate consideration, if any, received by the Company upon the issue or sale of such Additional Common Stock would purchase at the then-current Conversion Price, and (y) the denominator of which is the number of shares of Common Stock outstanding immediately prior to the issue or sale plus the number of shares of Additional Common Stock issued.

      5.  Payment . All payments shall be made in lawful money of the United States of America at such place as the Company may from time to time designate in writing to the Holder hereof. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. Prepayment of this Note may be made at any time without penalty.

      6.  Transfer; Successors and Assigns . The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, except for transfers to affiliates of Holder, which shall agree in writing to be bound by the terms of this Note and the Note Purchase Agreement. The Company may withhold its consent in its sole and absolute discretion. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and principal are payable only to the registered holder of this Note.

      7.  Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Arizona, without giving effect to principles of conflicts of law.

      8.  Notices . Any notice required or permitted by this Note shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

      9.  Amendments and Waivers . Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment or waiver effected in accordance with this Section 8 shall be binding upon the Company, the Holder and each transferee of the Note.

      10.  Action to Collect on Note. If action is instituted to collect on this Note, the Company promises to pay all costs and expenses, including reasonable attorney’s fees, incurred in connection with such action.

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REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the " Agreement ") is made and entered into as of this ___day of ,2006 by and among Teknik Digital Arts, Inc., a corporation incorporated under the laws of the State of Nevada (the "Company"), and the investors listed on Exhibit A attached to this Agreement (each an " Investor " and collectively, the " Investors ").

     The parties hereby agree as follows:

      1.  Certain Definitions .

     As used in this Agreement, the following terms shall have the following meanings:

     " Affiliate " means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person.

     " Business Day " means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

     " Common Stock" means the Company’s common stock, $.001 par value per share, and any securities into which such shares may hereinafter be reclassified.

     " Convertible Notes " means the Company’s Convertible Promissory Notes dated                      in the aggregate principal amount of US $                      bearing interest at 8% per annum payable two years from date of issuance.

     " Investor " means each investors listed on Exhibit A attached to this Agreement that have lent, in the aggregate, $                      (US) pursuant the Convertible Notes, and any Affiliate or permitted transferee or transferees of the Investor who is a subsequent holder of any Registrable Securities.

     " Prospectus " means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus.

     " Register ," " registered " and " registration " refer to a registration made by preparing and filing a Registration Statement in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

     " Registrable Securities" or "Registrable Security" means the Shares, any other securities issued or issuable with respect to or in exchange for Registrable Securities; provided, that, a security shall cease to he a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible, and the Company’s confirming such eligibility in writing, for sale by the Investor pursuant to Rule 144(k).

     " Registration Statement" means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

     " Required Investors " means the Investor and others who are affiliates and permitted transferees of the Investor holding a majority of the Registrable Securities.

     " SEC " means the U.S. Securities and Exchange Commission.

      "Shares " means the shares of Common Stock issued upon conversion of and pursuant to the Convertible Notes.

     " 1933 Act " means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

     " 1934 Act" means the Securities Exchange Act of I 934, as amended, and the rules and regulations promulgated thereunder.

      2.  Registration.

      (a)  Registration Statements .

           (i) Registration Statement on Form SB-1 Promptly following the closing of the purchase and sale of the Convertible Notes (the "Closing Date") but no later than ninety (90) days after the Closing Date (the "Filing Deadline"), the Company shall prepare and file with the SEC one Registration Statement on Form SB- I (or on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities), covering the sale of the Registrable Securities on their issuance in an amount at least equal to the number of Shares that the Company may issue at the current conversion price of $0.75 per Share. Such Registration Statement shall include the plan of distribution attached hereto as Exhibit B. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. The Company shall use its reasonable best efforts to obtain from each person who now has piggyback registration rights a waiver of those rights with respect to the Registration Statement. If a Registration Statement covering the Registrable Securities is not filed with the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.00% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following the Filing Deadline for which no Registration Statement is filed with respect to the Registrable Securities. Such payments shall be made to each Investor in cash. Notwithstanding the foregoing, such payments shall not constitute the Investor’s exclusive remedy.

           (ii) Registration Statement on Form SB-3 . Promptly following the date (the "Qualification Date") upon which the Company becomes eligible to use a Registration Statement on Form SB-3 to register the Registrable Securities or Additional Shares, as applicable, for resale, but in no event more than sixty (60) days after the Qualification Date (the "Qualification Deadline"), the Company shall file a registration statement on Form SB-3 covering the Registrable Securities (or a post-effective amendment on Form S-3 to the registration statement on Form SB-I) (a "Shelf Registration Statement") and shall use commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective as promptly as practicable thereafter.

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      (b)  Expenses. The Company will pay all expenses associated with each registration, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities for sale under applicable state securities laws, listing fees, and the Investors’ reasonable expenses in connection with the registration, but excluding the Investors’ legal fees, discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold.

      (c)  Effectiveness.

           (i) The Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable. The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within forty-eight (48) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If (A)(x) a Registration Statement covering the Registrable Securities is not declared effective by the SEC prior to the earlier of (i) five (5) Business Days after the SEC shall have informed the Company that no review of the Registration Statement will be made or (ii) the 120’" day after the Closing Date or (B) after a Registration Statement has been declared effective by the SEC, sales of Shares cannot be made pursuant to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding the inability of any Investor to sell the Registrable Securities covered thereby due to market conditions and except as excused pursuant to subparagraph (ii) below, then the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.00% of the aggregate amount invested by such Investor for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the "Blackout Period"). The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly within three (3) Business Days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each Investor in cash. Notwithstanding the foregoing, such payments shall not constitute the Investor’s exclusive remedy.

           (ii) For not more than twenty (20) consecutive days or for a total of not more than forty-five (45) days in any twelve (12) month period, the Company may delay the disclosure of material non-public information concerning the Company, by suspending the use of any Prospectus included in any registration contemplated by this Section containing such information, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an "Allowed Delay"); provided, that the Company shall promptly (a) notify the Investors in writing of the existence of (but in no event, without the prior written consent of an Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to an Allowed Delay, (b) advise the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable efforts to terminate an Allowed Delay as promptly as practicable.

      3.  Company Obligations . The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

           (a) Use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by such Registration

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Statement may he sold pursuant to Rule 144(k) (the "Effectiveness Period") and advise the Investors in writing when the Effectiveness Period has expired;

      (b)  Prepare and file with the SEC such amendments and post-eff