THESE  SECURITIES  HAVE NOT 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.   NOTWITHSTANDING   THE  FOREGOING,   THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.


                                UTIX GROUP, INC.
                               12% Promissory Note


NO. ___                                                   ISSUE DATE: __________


         UTIX GROUP,  INC., a Delaware  corporation (the  "COMPANY"),  for value
received, hereby promises to pay to ________________________, with an address at
___________________________,  registered  assigns (the "HOLDER"),  the principal
amount of ________________________  ($___________) and, subject to the terms and
conditions hereof, to pay interest on the unpaid principal balance hereof at the
rate  (calculated  on the basis of a 360-day year  consisting  of twelve  30-day
months)  of 12% per  annum  from the date  hereof  until the  Maturity  Date (as
defined below), all as hereafter provided.  In no event shall any interest to be
paid hereunder exceed the maximum rate permitted by law. In any such event, this
Note shall  automatically  be deemed  amended to permit  interest  charges at an
amount equal to, but no greater than, the maximum rate permitted by law.

1. PAYMENTS.

         (a)  INTEREST.  Interest  shall accrue on this Note, at the rate of 12%
per annum based on a 360 day calendar  year,  calculated  from the Issue Date to
the Maturity  Date (as defined in Section  1(b) below),  and shall be payable on
the Maturity  Date.  In the event on or prior to the Maturity  Date, an Event of
Default (as defined in Section 3 below) has occurred, the amount of principal or
interest on this Note which is not paid when due shall bear interest at the rate
of 15% per annum ("DEFAULT  INTEREST"),  PROVIDED,  HOWEVER,  if the Company has
transferred  $1,552,500  (or such lesser amount as permitted  under the terms of
the Cash Collateral Escrow Agreement) to the Cash Collateral Escrow Account (the
"CASH  COLLATERAL  ESCROW  ACCOUNT")  in  accordance  with the terms of the Cash
Collateral  Escrow  Agreement  entered into between the Company,  the Holder and
Hodgson Russ LLP, as the Escrow Agent,  on even date herewith,  (a copy of which
is attached  hereto as EXHIBIT A), interest shall continue to accrue at the rate
of 12% per annum and the  Default  Interest  rate  shall not  apply.  If Default
Interest is applied in  accordance  with this Section  1(a), it shall be applied
from the  Event of  Default  until the  earlier  of the date the Note is paid in
full, the Holder elects to convert the full amount of this Note to shares of the
Company's

<PAGE>

Common Stock or $1,552,500  (or such lesser amount as permitted) is  transferred
to the Cash Collateral Escrow Account.

         (b) PRINCIPAL AND MATURITY DATE. Unless converted into Common Stock, as
hereinafter  provided,  the  principal  amount  of this Note  together  with all
interest accrued hereon,  shall be due and payable in full on September 18, 2005
(the "MATURITY  DATE").  If pursuant to the  foregoing,  the Maturity Date would
fall on a day that is not a Business Day (as defined  below),  the Maturity Date
shall be the next succeeding Business Day. "BUSINESS DAY" means any day which is
not a Saturday  or Sunday  and is not a day on which  banking  institutions  are
generally authorized or obligated to close in the City of New York, New York.

         (c) PAYMENTS.  Payments of principal and interest on this Note shall be
made by check sent to the Holder.  All payments will be delivered to the address
set forth  therefor on the note register  described  below,  and will be in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts.

         (d)  COMPANY'S  PREPAYMENT.  The  Company  shall  not have the right to
prepay all or any part of this Note prior to the Maturity Date.

         (e)  HOLDER'S  PREPAYMENT  OPTION.   Notwithstanding  anything  to  the
contrary, contained in this Section 1, at Holder's option, Holder shall have the
right at any time to be prepaid,  in whole or in part, any amounts due under the
terms of the Note from the proceeds of any Qualified Offering (as defined below)
of the  Company's  securities.  In order to exercise  such right,  Holder  shall
deliver a written  notice of prepayment to the Company  pursuant to the terms of
the Cash Collateral  Escrow Agreement entered into on even date herewith between
the Company, the Holder and Hodgson Russ LLP, as escrow agent. The Company shall
make  payment to the Holder of an amount in cash equal to the sum  indicated  in
such  notice  in  accordance  with  the  terms  of the  Cash  Collateral  Escrow
Agreement. The term "Qualified Offering" shall have the meaning attributed to it
in the Cash Collateral Escrow Agreement.

         (f) WAIVER OF DEFENSES.  The obligations to make the payments  provided
for in this Note are absolute and  unconditional and not subject to any defense,
set-off,  counterclaim,  rescission,  recoupment or adjustment  whatsoever.  The
Company hereby  expressly  waives demand and presentment for payment,  notice of
non-payment,  notice of dishonor,  protest, notice of protest,  bringing of suit
and diligence in taking any action to collect any amount  called for  hereunder,
and shall be directly and primarily liable for the payment of all sums owing and
to be owing  hereon,  regardless  of and without any notice,  diligence,  act or
omission with respect to the collection of any amount called for hereunder.

2. CONVERSION.

         (a)  After  the Issue  Date,  the  Holder  shall  have the  right  (the
"CONVERSION  RIGHT"),  on the terms set forth in this  Section 2, to convert the
principal  amount of this Note and the accrued but unpaid interest  thereon into
Common Stock on the terms and conditions hereinafter set forth.

                                       2
<PAGE>

         (b) Holder may exercise  such  Conversion  Right by (i) delivery to the
Company of a written  notice of conversion not less than three (3) Business Days
prior to the date upon which such  conversion  shall  occur and (ii)  subject to
2(f),  surrendering  this Note at the principal office of the Company.  The date
upon which such  conversion  shall  occur is the  conversion  date  ("CONVERSION
DATE").

         (c) Notwithstanding anything contained herein to the contrary, pursuant
to the terms of this Note, the Holder shall not be entitled to convert this Note
into that  number of shares of Common  Stock which would be in excess of the sum
(i) the number of shares of Common  Stock  actually  owned by the Holder and its
affiliates  and (ii) the  number of shares of  Common  Stock  issuable  upon the
conversion of this Note held by such Holder and its  affiliates  with respect to
which the  determination  of this  proviso is being made which  would  result in
beneficial  ownership by the Holder and its affiliates of more than 9.99% of the
outstanding  shares of Common  Stock of the  Company.  For the  purposes  of the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d)  of  the  Exchange  Act  and  Regulation  13d-3
thereunder.  The Holder of this Note may waive the  limitations set forth herein
by written notice of not less than sixty (60) days to the Company.

         (d) In the event that the Holder  elects to convert  all or any portion
of this Note into Common  Stock,  the Holder shall give  written  notice of such
election  by  delivering  to the  Company an executed  and  completed  notice of
conversion (the "NOTICE OF CONVERSION"), such Notice of Conversion shall provide
a breakdown in reasonable detail of the Principal  Amount,  accrued interest and
fees being  converted.  On each Conversion Date (as hereinafter  defined) and in
accordance with the Notice of Conversion,  the Holder shall make the appropriate
reduction to the Principal  Amount,  accrued interest and fees as entered in its
records and shall provide  written  notice thereof to the Company within two (2)
Business  Days  after  the  Conversion  Date.  Each  date on which a  Notice  of
Conversion  is delivered or  telecopied  to the Company in  accordance  with the
provisions  hereof  shall be deemed,  for all  purposes of this Note,  to be the
Conversion Date. Pursuant to the terms of the Notice of Conversion,  the Company
will  issue  instructions  to the  transfer  agent  (together  with  such  other
documents as the transfer  agent may request)  within ten (10)  Business Days of
the date of the  delivery  to Company of the Notice of  Conversion.  The Company
shall  use its best  efforts  to  cause  its  transfer  agent  to  transmit  the
certificates  representing  the  Common  Stock  issuable  upon  full or  partial
conversion  of this Note to any  address or  depositary  directed  by the Holder
within  ten (10)  Business  Days after  receipt by the  Company of the Notice of
Conversion.

         (e) The  number  of  shares  of  Common  Stock  to be  issued  upon any
conversion  of this  Note  (the  "CONVERSION  SHARES")  shall be  determined  by
dividing that portion of the  principal,  interest and fees to be converted,  if
any, by twelve and one-half cents ($0.125) (the "CONVERSION PRICE").

         (f)  Notwithstanding  anything to the contrary set forth  herein,  upon
conversion  of this Note in accordance  with the terms hereof,  the Holder shall
not be  required to  physically  surrender  this Note to the Company  unless the
entire unpaid principal  amount of this Note is so converted.  The Company shall
maintain records showing the principal amount so converted and the dates of such
conversions  or shall use such  other  method,  reasonably  satisfactory  to the

                                       3
<PAGE>

Holder and the  Company,  so as not to require  physical  surrender of this Note
upon each such  conversion.  In the event of any  dispute or  discrepancy,  such
records of the Company shall be controlling and  determinative in the absence of
manifest error.  Notwithstanding  the foregoing,  if any portion of this Note is
converted as aforesaid,  the Holder may not transfer this Note unless the Holder
first physically surrenders this Note to the Company, whereupon the Company will
forthwith  issue and  deliver  upon the  order of the  Holder a new Note of like
tenor,  registered as the Holder (upon  payment by the Holder of any  applicable
transfer taxes) may request,  representing in the aggregate the remaining unpaid
principal amount of this Note.

         THE HOLDER AND ANY ASSIGNEE,  BY  ACCEPTANCE OF THIS NOTE,  ACKNOWLEDGE
AND AGREE  THAT,  BY  REASON  OF THE  PROVISIONS  OF THIS  PARAGRAPH,  FOLLOWING
CONVERSION  OF A PORTION OF THIS NOTE,  THE  UNPAID  AND  UNCONVERTED  PRINCIPAL
AMOUNT OF THIS NOTE  REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNT STATED
ON THE FACE HEREOF.

         (g). The Conversion Price and the number of Conversion  Shares shall be
subject to adjustment from time to time as provided in this Paragraph 2(g).

         In the event that any  adjustment of the  Conversion  Price as required
herein results in a fraction of a cent, such  Conversion  Price shall be rounded
up to the nearest cent.

                  (i)  ADJUSTMENT OF CONVERSION  PRICE AND NUMBER OF CONVERSION.
Except as otherwise provided in Paragraphs 2(g)(iii) and 2(g)(iv) hereof, if and
whenever on or after the date of issuance  of this Note,  the Company  issues or
sells, or in accordance with Paragraph  2(g)(ii) hereof is deemed to have issued
or sold, any shares of Common Stock for no  consideration or for a consideration
per  share  (before   deduction  of  reasonable   expenses  or   commissions  or
underwriting  discounts or  allowances in  connection  therewith)  less than the
Market  Price (as  hereinafter  defined) on the date of  issuance  (a  "DILUTIVE
ISSUANCE"),  then immediately upon the Dilutive  Issuance,  the Conversion Price
will be reduced to a price  determined by multiplying  the  Conversion  Price in
effect  immediately  prior  to the  Dilutive  Issuance  by a  fraction,  (i) the
numerator  of which is an amount equal to the sum of (x) the number of shares of
Common Stock actually  outstanding  immediately prior to the Dilutive  Issuance,
plus (y) the quotient of the aggregate consideration, calculated as set forth in
Paragraph  2(g)(ii) hereof,  received by the Company upon such Dilutive Issuance
divided  by the  Market  Price  in  effect  immediately  prior  to the  Dilutive
Issuance,  and (ii) the  denominator  of which is the total  number of shares of
Common  Stock  Deemed  Outstanding  (as  defined  below)  immediately  after the
Dilutive Issuance.

                  (ii)  EFFECT  ON  CONVERSION  PRICE  OF  CERTAIN  EVENTS.  For
purposes of determining the adjusted  Conversion  Price under Paragraph  2(g)(i)
hereof, the following will be applicable:

                           (A) ISSUANCE OF RIGHTS OR OPTIONS.  If the Company in
any  manner  issues or grants  any  Notes,  rights or  options,  whether  or not
immediately  exercisable,  to subscribe for or to purchase Common Stock or other
securities  convertible  into or  exchangeable

                                       4
<PAGE>

for Common Stock  ("CONVERTIBLE  SECURITIES") (such Notes, rights and options to
purchase Common Stock or Convertible  Securities are hereinafter  referred to as
"OPTIONS")  and the price per share for which Common Stock is issuable  upon the
exercise of such  Options is less than the Market  Price on the date of issuance
or grant of such  Options,  then the  maximum  total  number of shares of Common
Stock issuable upon the exercise of all such Options will, as of the date of the
issuance or grant of such Options,  be deemed to be outstanding and to have been
issued and sold by the  Company  for such price per share.  For  purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon
the exercise of such Options" is determined by dividing (i) the total amount, if
any,  received or receivable by the Company as consideration for the issuance or
granting of all such Options,  plus the minimum  aggregate  amount of additional
consideration,  if any,  payable to the  Company  upon the  exercise of all such
Options,  plus, in the case of Convertible Securities issuable upon the exercise
of such  Options,  the  minimum  aggregate  amount of  additional  consideration
payable upon the  conversion  or exchange  thereof at the time such  Convertible
Securities first become  convertible or exchangeable,  by (ii) the maximum total
number of shares of Common Stock  issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable).  No further
adjustment to the Conversion Price will be made upon the actual issuance of such
Common  Stock  upon the  exercise  of such  Options  or upon the  conversion  or
exchange of Convertible Securities issuable upon exercise of such Options.

                           (B)  ISSUANCE  OF  CONVERTIBLE  SECURITIES.   If  the
Company in any manner issues or sells any Convertible Securities, whether or not
immediately  convertible  (other  than  where  the  same are  issuable  upon the
exercise of Options)  and the price per share for which Common Stock is issuable
upon such  conversion  or exchange is less than the Market  Price on the date of
issuance,  then the maximum total number of shares of Common Stock issuable upon
the conversion or exchange of all such  Convertible  Securities  will, as of the
date of the issuance of such Convertible Securities, be deemed to be outstanding
and to have been issued and sold by the  Company  for such price per share.  For
the purposes of the  preceding  sentence,  the "price per share for which Common
Stock is issuable  upon such  conversion  or exchange" is determined by dividing
(i)  the  total  amount,  if any,  received  or  receivable  by the  Company  as
consideration for the issuance or sale of all such Convertible Securities,  plus
the minimum aggregate amount of additional consideration, if any, payable to the
Company upon the  conversion  or exchange  thereof at the time such  Convertible
Securities first become  convertible or exchangeable,  by (ii) the maximum total
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities.  No further adjustment to the Conversion Price will
be made upon the  actual  issuance  of such  Common  Stock  upon  conversion  or
exchange of such Convertible Securities.

                           (C) CHANGE IN OPTION  PRICE OR  CONVERSION  RATE.  If
there is a change  at any time in (i) the  amount  of  additional  consideration
payable to the  Company  upon the  exercise of any  Options;  (ii) the amount of
additional consideration,  if any, payable to the Company upon the conversion or
exchange  of any  Convertible  Securities;  or  (iii)  the  rate  at  which  any
Convertible  Securities are convertible  into or  exchangeable  for Common Stock
(other  than  under or by reason  of  provisions  designed  to  protect  against
dilution),  the  Conversion  Price in effect at the time of such  change will be
readjusted to the Conversion  Price which would have been in effect at such time
had such Options or Convertible  Securities still outstanding  provided for such

                                       5
<PAGE>

changed additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

                           (D)  TREATMENT  OF EXPIRED  OPTIONS  AND  UNEXERCISED
CONVERTIBLE  SECURITIES.  If, in any case,  the total number of shares of Common
Stock issuable upon exercise of any Option or upon conversion or exchange of any
Convertible  Securities is not, in fact,  issued and the rights to exercise such
Option or to convert or exchange such Convertible  Securities shall have expired
or  terminated,  the  Conversion  Price then in effect will be readjusted to the
Conversion  Price which would have been in effect at the time of such expiration
or  termination  had  such  Option  or  Convertible  Securities,  to the  extent
outstanding  immediately prior to such expiration or termination  (other than in
respect of the actual  number of shares of Common Stock issued upon  exercise or
conversion thereof), never been issued.

                           (E)  CALCULATION OF  CONSIDERATION  RECEIVED.  If any
Common Stock, Options or Convertible  Securities are issued, granted or sold for
cash, the consideration  received therefor for purposes of this Note will be the
amount  received  by  the  Company  therefor,  before  deduction  of  reasonable
commissions,  underwriting  discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock,  Options or Convertible  Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration,  except where such consideration  consists of securities,
in which case the amount of  consideration  received by the Company  will be the
Market  Price  thereof  as of the date of  receipt.  In case any  Common  Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving  corporation,  the
amount of  consideration  therefor  will be deemed to be the fair  value of such
portion of the net assets and business of the  non-surviving  corporation  as is
attributable  to such Common Stock,  Options or Convertible  Securities,  as the
case may be. The fair value of any  consideration  other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

                           (F) EXCEPTIONS TO ADJUSTMENT OF CONVERSION  PRICE. No
adjustment  to the  Conversion  Price will be made (i) upon the  exercise of any
notes,  warrants,   options  or  convertible  securities  granted,   issued  and
outstanding  on the date of  issuance  of this  Note;  (ii)  upon  the  grant or
exercise of any stock or options  which may  hereafter  be granted or  exercised
under any employee  benefit plan,  stock option plan or restricted stock plan of
the Company  now  existing or to be  implemented  in the future,  so long as the
issuance of such stock or options is  approved by a majority of the  independent
members of the Board of Directors of the Company or a majority of the members of
a committee of independent  directors  established for such purpose;  (iii) upon
the  conversion of the Notes;  or (iv) upon the issuance of any of the Company's
Series  A  Convertible  Preferred  Stock  (to  be  designated  by  filing  of  a
Certificate  of  Designation  hereafter) or the shares of Common Stock  issuable
upon conversion of the Company's Series A Convertible Preferred Stock.

                  (iii)  SUBDIVISION  OR  COMBINATION  OF COMMON  STOCK.  If the
Company  at  any  time   subdivides  (by  any  stock  split,   stock   dividend,
recapitalization,  reorganization,  reclassification or otherwise) the shares of
Common Stock acquirable  hereunder into a greater

                                       6
<PAGE>

number of shares, then, after the date of record for effecting such subdivision,
the Conversion  Price in effect  immediately  prior to such  subdivision will be
proportionately  reduced.  If the Company at any time combines (by reverse stock
split,  recapitalization,  reorganization,  reclassification  or otherwise)  the
shares of Common Stock  acquirable  hereunder  into a smaller  number of shares,
then,  after the date of record for effecting such  combination,  the Conversion
Price in effect  immediately  prior to such combination will be  proportionately
increased.

                  (iv)  ADJUSTMENT IN NUMBER OF SHARES.  Upon each adjustment of
the Conversion  Price  pursuant to the  provisions of this  Paragraph  2(g), the
number of shares of Common Stock issuable upon  conversion of this Note shall be
adjusted  by  multiplying  a number  equal  to the  Conversion  Price in  effect
immediately  prior to such  adjustment  by the number of shares of Common  Stock
issuable upon conversion of this Note  immediately  prior to such adjustment and
dividing the product so obtained by the adjusted Conversion Price.

                  (v)   CONSOLIDATION,   MERGER   OR   SALE.   In  case  of  any
consolidation  of the  Company  with,  or merger of the  Company  into any other
corporation, or in case of any sale or conveyance of all or substantially all of
the assets of the  Company  other  than in  connection  with a plan of  complete
liquidation of the Company, then as a condition of such consolidation, merger or
sale or conveyance,  adequate  provision will be made whereby the Holder of this
Note will have the right to acquire and receive upon  conversion of this Note in
lieu of the shares of Common Stock immediately  theretofore  acquirable upon the
conversion  of this Note,  such shares of stock,  securities or assets as may be
issued or payable  with  respect to or in  exchange  for the number of shares of
Common Stock immediately  theretofore  acquirable and receivable upon conversion
of this  Note had such  consolidation,  merger or sale or  conveyance  not taken
place if all  shareholders of record of the Company's  Common Stock, as a result
of such consolidation,  merger or sale or conveyance, will exchange their shares
for securities of any other corporation. In any such case, the Company will make
appropriate  provision  to insure that the  provisions  of this  Paragraph  2(g)
hereof  will  thereafter  be  applicable  as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the conversion of this
Note.  The  Company  will  not  effect  any  consolidation,  merger  or  sale or
conveyance unless prior to the consummation  thereof, the successor  corporation
(if other than the Company) assumes by written  instrument the obligations under
this  Paragraph  2(g) and the  obligations to deliver to the Holder of this Note
such shares of stock,  securities or assets as, in accordance with the foregoing
provisions, the Holder may be entitled to acquire.

                  (vi) DISTRIBUTION OF ASSETS. In case the Company shall declare
or make any  distribution  of its assets  (including  cash) to holders of Common
Stock  as a  partial  liquidating  dividend,  by way of  return  of  capital  or
otherwise,  then, after the date of record for determining stockholders entitled
to such distribution,  but prior to the date of distribution, the Holder of this
Note shall be entitled  upon  conversion of this Note for the purchase of any or
all of the shares of Common Stock subject hereto,  to receive the amount of such
assets  which  would have been  payable to the Holder had such  Holder  been the
holder of such shares of Common  Stock on the record date for the  determination
of stockholders entitled to such distribution.

                  (vii) NOTICE OF  ADJUSTMENT.  Upon the occurrence of any event
which requires any adjustment of the  Conversion  Price,  then, and in each such
case,  the Company shall give

                                       7
<PAGE>

notice  thereof  to the  Holder  of this  Note,  which  notice  shall  state the
Conversion  Price resulting from such adjustment and the increase or decrease in
the number of  Conversion  Shares  purchasable  at such  price upon  conversion,
setting forth in reasonable  detail the method of calculation and the facts upon
which such  calculation  is based.  Such  calculation  shall be certified by the
principal financial officer of the Company.

                  (viii) MINIMUM  ADJUSTMENT OF CONVERSION  PRICE. No adjustment
of the  Conversion  Price  shall  be made in an  amount  of less  than 1% of the
Conversion Price in effect at the time such adjustment is otherwise  required to
be made, but any such lesser  adjustment  shall be carried  forward and shall be
made at the  time  and  together  with the  next  subsequent  adjustment  which,
together with any adjustments so carried forward,  shall amount to not less than
1% of such Conversion Price.

                  (ix) NO  FRACTIONAL  SHARES.  No  fractional  shares of Common
Stock are to be issued upon the  conversion of this Note,  but the Company shall
pay a cash  adjustment in respect of any fractional  share which would otherwise
be issuable  in an amount  equal to the same  fraction of the Market  Price of a
share of Common Stock on the date of such conversion.

                  (x) OTHER NOTICES. In case at any time:

                           (A) the Company  shall  declare any dividend upon the
Common  Stock  payable  in  shares  of  stock of any  class  or make  any  other
distribution  (including  dividends  or  distributions  payable  in cash  out of
retained earnings) to the holders of the Common Stock;

                           (B) the Company shall offer for subscription pro rata
to the holders of the Common Stock any  additional  shares of stock of any class
or other rights;

                           (C) there shall be any capital  reorganization of the
Company,  or reclassification of the Common Stock, or consolidation or merger of
the Company  with or into,  or sale of all or  substantially  all its assets to,
another corporation or entity; or

                           (D)  there  shall  be  a  voluntary  or   involuntary
dissolution, liquidation or winding-up of the Company;

                           then,  in each such case,  the Company  shall give to
the Holder of this Note (a) notice of the date on which the books of the Company
shall  close or a record  shall be taken for  determining  the holders of Common
Stock  entitled  to receive any such  dividend,  distribution,  or  subscription
rights or for  determining  the  holders  of Common  Stock  entitled  to vote in
respect of any such  reorganization,  reclassification,  consolidation,  merger,
sale,  dissolution,  liquidation  or winding-up  and (b) in the case of any such
reorganization,  reclassification,  consolidation,  merger,  sale,  dissolution,
liquidation  or  winding-up,  notice  of the  date  (or,  if not then  known,  a
reasonable approximation thereof by the Company) when the same shall take place.
Such notice  shall also  specify  the date on which the holders of Common  Stock
shall be entitled to receive such dividend, distribution, or subscription rights
or to exchange  their  Common  Stock for stock or other  securities  or property
deliverable upon such reorganization, re-classification,  consolidation, merger,
sale, dissolution,  liquidation,  or winding-up, as the case may be. Such

                                       8
<PAGE>

notice  shall be given at least 30 days prior to the record  date or the date on
which the  Company's  books are closed in respect  thereto.  Failure to give any
such  notice  or any  defect  therein  shall  not  affect  the  validity  of the
proceedings referred to in clauses (A), (B), (C) and (D) above.

                  (xi)  CERTAIN  EVENTS.   If  any  event  occurs  of  the  type
contemplated  by the  adjustment  provisions  of  this  Paragraph  2(g)  but not
expressly provided for by such provisions,  the Company will give notice of such
event as provided in Paragraph  2(g)(vii)  hereof,  and the  Company's  Board of
Directors  will make an appropriate  adjustment in the Conversion  Price and the
number of shares of Common Stock acquirable upon conversion of this Note so that
the rights of the Holder shall be neither enhanced nor diminished by such event.

                  (xii) CERTAIN DEFINITIONS.

                           (A) "COMMON STOCK DEEMED  OUTSTANDING" shall mean the
number of shares of Common Stock actually  outstanding  (not including shares of
Common  Stock  held in the  treasury  of the  Company),  plus  (x)  pursuant  to
Paragraph 2(g)(ii)(A) hereof, the maximum total number of shares of Common Stock
issuable upon the exercise of Options,  as of the date of such issuance or grant
of such Options,  if any, and (y) pursuant to Paragraph  2(g)(ii)(B) hereof, the
maximum  total  number of shares of Common Stock  issuable  upon  conversion  or
exchange  of  Convertible  Securities,  as of  the  date  of  issuance  of  such
Convertible Securities, if any.

                           (B)  "MARKET  PRICE,"  as of any date,  (i) means the
average of the last  reported  sale prices for the shares of Common Stock on the
Over-the-Counter  Bulletin  Board (the "OTC BB") for the five (5)  Trading  Days
immediately preceding such date as reported by Bloomberg,  or (ii) if the OTC BB
is not the principal  trading market for the shares of Common Stock, the average
of the last reported sale prices on the principal  trading market for the Common
Stock during the same period as reported by Bloomberg,  or (iii) if market value
cannot be calculated as of such date on any of the foregoing  bases,  the Market
Price shall be the fair market value as  reasonably  determined in good faith by
(a)  the  Board  of  Directors  of  the  Corporation  or,  at  the  option  of a
majority-in-interest  of  the  Holders  of  the  outstanding  Notes  by  (b)  an
independent  investment bank of nationally  recognized standing in the valuation
of  businesses  similar  to the  business  of the  corporation.  The  manner  of
determining  the  Market  Price of the Common  Stock set forth in the  foregoing
definition  shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

                           (C) "COMMON  STOCK," for  purposes of this  Paragraph
2(g),  includes the Common Stock,  par value $.001 per share, and any additional
class  of  stock  of  the  Company  having  no  preference  as to  dividends  or
distributions on liquidation,  provided that the shares purchasable  pursuant to
this Note shall include only shares of Common Stock,  par value $.001 per share,
in respect  of which  this Note is  exercisable,  or shares  resulting  from any
subdivision  or  combination  of  such  Common  Stock,  or in  the  case  of any
reorganization,   reclassification,   consolidation,  merger,  or  sale  of  the
character referred to in Paragraph 2(g)(v) hereof, the stock or other securities
or property provided for in such Paragraph.

                                       9
<PAGE>

3.  EVENTS OF DEFAULT.  The  occurrence  of any of the  following  events  shall
constitute an event of default (an "EVENT OF DEFAULT"):

         (a) A default in the  payment of the  principal  of or interest on this
Note,  when and as the same shall become due and payable,  which  default  shall
continue for a period of three Business Days after the date fixed for the making
of such payment.

         (b) Any material breach of any representation,  warranty or covenant of
the Company made herein or in any agreement,  statement or certificate  given in
writing  pursuant  hereto  or  in  connection   herewith   (including,   without
limitation,  the Securities Purchase Agreement of even date herewith between the
Company and the Holder and the Cash Collateral Escrow Agreement).

         (c) The  entry of a decree  or  order  by a court  having  jurisdiction
adjudging  the Company  bankrupt or insolvent,  or approving a petition  seeking
reorganization,  arrangement, adjustment, or composition of or in respect of the
Company, under federal bankruptcy law, as now or hereafter  constituted,  or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
and the  continuance  of any such decree or order  unstayed  and in effect for a
period of 60 consecutive days; or the commencement by the Company of a voluntary
case under federal bankruptcy law, as now or hereafter constituted, or any other
applicable federal or state bankruptcy,  insolvency or other similar law, or the
consent by it to the institution of bankruptcy or insolvency proceedings against
it,  or  the  filing  by  it  of  a  petition  or  answer  or  consent   seeking
reorganization  or relief under federal  bankruptcy law or any other  applicable
federal or state law, or the consent by it to the filing of such  petition or to
the appointment of a receiver,  liquidator,  assignee, trustee, sequestration or
similar official of the Company or of any substantial  part of its property,  or
the making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become due,
or the taking of  corporate  action by the  Company in  furtherance  of any such
action.

         4. REMEDIES UPON DEFAULT.

         (a) Upon the  occurrence,  and during the  continuance,  of an Event of
Default  specified in Section 3(a) or 3(b),  the Holder of this Note may declare
all or any part of the unpaid  principal  amount of this Note,  and all interest
accrued  and  unpaid  thereon,  to  be  immediately  due  and  payable,  without
presentment,  demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company.

         (b) Upon the  occurrence  of an Event of Default  specified  in Section
3(c), all of the principal  amount then outstanding of, and all interest accrued
and unpaid on, the Note shall  automatically  become immediately due and payable
without  presentment,  demand,  protest or other formalities of any kind, all of
which are hereby expressly waived by the Company.

         (c) Contemporaneous  with the execution of this Note, the Company shall
execute a Confession of Judgment (in  substantially  the form annexed  hereto as
EXHIBIT B) in the  principal  amount of the Note  together  with all accrued and
unpaid interest thereon and deliver such Confession of Judgment to the Company's
counsel to be held in escrow  until such time as the Holder  notifies  Company's
counsel in writing  that an Event of Default  specified  in Section 3(a) or 3(b)
has occurred and has been continuing for a period of thirty (30) days or that an
Event of

                                       10
<PAGE>

Default  specified in Section 3(c) has occurred.  Unless  Company's  counsel has
written evidence that this Note has been paid, or that the Holder has elected to
convert the full amount of this Note into shares of the Company's  common stock,
or that the  Company  has  transfered  $1,552,500  (or  such  lesser  amount  as
permitted under the terms of the Cash Collateral  Escrow  Agreement) to the Cash
Collateral  Escrow  Account,  upon  receipt of such notice from the Holder,  the
Company's  counsel shall deliver the Confession of Judgment to the Holder at the
address specified in this Note or such other address as the Holder shall specify
in writing.  Upon receipt of written  evidence  that this Note has been paid, or
that the Holder has  elected to convert the full amount of this Note into shares
of the Company's Common Stock, or that the Company has transfered $1,552,500 (or
such lesser amount as permitted  under the terms of the Cash  Collateral  Escrow
Agreement) to the Cash Collateral  Escrow Account,  the Company's  counsel shall
deliver the Confession of Judgment to the Company.

         (d) The Holder may  institute  such  actions or  proceedings  in law or
equity as it shall  deem  expedient  for the  protection  of its  rights and may
prosecute and enforce its claims against all assets of the Company.  The Company
shall pay to the Holder  reasonable  attorney's  fees, legal expenses and lawful
collection costs in addition to all other sums due hereunder.

         5. REGISTRATION AND TRANSFER.

         (a) The Company shall maintain books for the  registration and transfer
of the Note.

         (b) Prior to due presentment for registration of transfer of this Note,
the  Company  may deem and treat the  registered  Holder as the  absolute  owner
thereof.  The Company  shall be entitled to treat the  registered  holder of any
Note on the note  register  as the owner in fact  thereof for all  purposes  and
shall not be bound to recognize  any  equitable or other claim to or interest in
such Note on the part of any  other  person,  and  shall  not be liable  for any
registration or transfer of the Note which are registered or to be registered in
the name of a  fiduciary  or the  nominee of a  fiduciary  unless  made with the
actual  knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such  registration  or transfer,  or with the knowledge of such facts
that its participation therein amounts to bad faith. In all cases of transfer by
an attorney, executor,  administrator,  guardian, or other legal representative,
duly authenticated evidence of his or its authority shall be produced.

         (c) This Note has not been registered under the Securities Act of 1933,
as amended (the "Securities  Act").  Without limiting the foregoing,  the Holder
may not make any disposition of this Note unless:

                  (i) each transferee is an accredited investor, as such term is
         defined in Regulation D promulgated  under the Securities  Act, and has
         delivered certification thereof to the Company, reasonably satisfactory
         to the Company; and

                  (ii) (A) each  transferee has agreed in writing to be bound by
         the terms of this Note , (B) the Holder shall have notified the Company
         of the proposed disposition and shall have furnished the Company with a
         detailed  statement  of  the  circumstances  surrounding  the  proposed
         disposition,  and (C) the Holder shall have  furnished the Company with
         an opinion of counsel  (with the costs of obtaining  such opinion borne
         by

                                       11
<PAGE>

         the Company),  which counsel and opinion are reasonably satisfactory to
         the Company,  that this Note has been  registered  under the Securities
         Act or that such registration is not required.

         (d) Each Note  shall be stamped or  otherwise  imprinted  with a legend
substantially similar to the following (in addition to any legend required under
other applicable securities laws):

         THESE  SECURITIES  HAVE NOT 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.  NOTWITHSTANDING THE FOREGOING, THESE SECURITIES
         MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
         LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

         (e) The Company shall register upon its books any permitted transfer of
this Note,  upon  surrender of same to the Company with a written  instrument of
transfer,  in the form  attached as EXHIBIT C, duly  executed by the  registered
Holder or by a duly authorized attorney thereof and (unless being transferred to
the  Company)  by the  transferee  or by a  duly  authorized  attorney  thereof,
together  with such other  documents  as may be  required  for such  transfer as
provided above.  Upon any such  registration  of transfer,  new Note(s) shall be
issued to the  transferee(s)  and the surrendered  Note shall be canceled by the
Company.  This Note may also be exchanged,  at the option of the Holder, for new
Notes  representing  in the  aggregate  the  principal  amount of this Note then
outstanding.

         (f) Upon receipt by the Company of reasonable evidence of the ownership
of and the loss, theft, destruction, or mutilation of this Note and, in the case
of loss,  theft, or  destruction,  of indemnity  reasonably  satisfactory to the
Company,  or, in the case of mutilation,  upon surrender and cancellation of the
mutilated Note, the Company shall execute and deliver in lieu thereof a new Note
representing the principal amount of such Note then outstanding.

         6. MISCELLANEOUS.

         (a) This Note shall be governed by and construed in accordance with the
laws of the State of New York,  without  giving effect to  principles  governing
conflicts of law.

         (b) Any notice or other communication required or permitted to be given
hereunder  shall be in writing  and shall be given by Federal  Express,  Express
Mail or similar overnight delivery or courier service or delivered (in person or
by telecopy, telex or similar  telecommunications  equipment) against receipt to
the party to whom it is to be given,  (i) if to the

                                       12
<PAGE>

Company,  at its address at UTIX Group, Inc. 7 New England Executive Park, Suite
610 Burlington, MA 01803, Attention: President and Chief Executive Officer, (ii)
if to the Holder, at its address set forth on the first page hereof, or (iii) in
either case, to such other address as the party shall have  furnished in writing
in accordance  with the  provisions  of this Section  7(b).  Any notice shall be
deemed given at the time of receipt thereof.

         (c) No course of dealing  and no delay or  omission  on the part of the
Holder in exercising  any right or remedy shall  operate as a waiver  thereof or
otherwise prejudice the Holder's rights,  powers or remedies. No right, power or
remedy  conferred  by this Note upon the Holder  shall be exclusive of any other
right, power or remedy referred to herein or now or hereafter  available at law,
in equity,  by statute or  otherwise,  and all such  remedies  may be  exercised
singly or concurrently.

         IN WITNESS WHEREOF, the Company has caused this Note to be executed and
dated the day and year first above written.


                                             UTIX GROUP, INC.

                                             By: ___________________________
                                                 Name:  Anthony G. Roth
                                                 Title:    President



                                             COMPANY COUNSEL:

                                             HODGSON RUSS LLP

                                             (for purposes of Section 4(c) only)

                                             By: _______________________________

                                             Name:

                                       13
<PAGE>

                                    EXHIBIT C
                               FORM OF ASSIGNMENT
       (To be executed by the registered holder if such holder desires to
                          transfer the attached Note)

         FOR VALUE RECEIVED, ______________________ (the "Holder") hereby sells,
assigns, and transfers unto

                  Name _______________________________________

                  Address_____________________________________

                  ____________________________________________

                  ____________________________________________

                  Social Security or Tax Identification Number

                  ____________________________________________

______ Notes,  together with all right,  title, and interest  therein,  and does
hereby irrevocably constitute and appoint  _______________  attorney to transfer
such  Note on the  books  of UTIX  Group,  Inc.  ("UTIX"),  with  full  power of
substitution.

Dated: _______________

                          ______________________________________________________
                          Name of Holder

                          ______________________________________________________
                          Signature

                          ______________________________________________________
                          If executed in a representative or fiduciary capacity,
                          print  name and  title of  individual  executing  this
                          notice on behalf of the Holder.

                          NOTE: The above signature  should  correspond  exactly
                          with the name on the first page of the attached Note.

                          ______________________________________________________
                          Social Security or Tax Identification Number of Holder

                          Address of Holder:

                          ______________________________________________________

                          ______________________________________________________

<PAGE>

         The undersigned  transferee,  by execution  hereof,  (i) represents and
warrants to UTIX that (a) such transferee is an accredited investor,  and agrees
to provide such evidence thereof as may be reasonably requested by UTIX, (b) the
undersigned  is acquiring  the Note,  and will acquire any shares of  Conversion
Shares (as defined in the Note) issued in conversion thereof, for investment and
without a view to a distribution other than pursuant to a registration statement
under the Securities Act of 1933, as amended,  and applicable  state  securities
laws, or an exemption therefrom,  and (c) the name, address, and social security
or tax identification  number of the undersigned is as set forth above, and (ii)
agrees  to be bound by the  terms of the  Note and the  Purchase  Agreement  (as
defined in the Note).

Dated: _______________

                          ______________________________________________________
                          Name of Transferee

                          ______________________________________________________
                          Signature

                          ______________________________________________________
                          If executed in a representative or fiduciary capacity,
                          print  name and  title of  individual  executing  this
                          notice on behalf of the transferee.

NOTE:  The above  signature  should  correspond  exactly with the name set forth
above.

                                        2