Document:

[TRINITY ADVISORS LOGO]]

November 1, 2006

Mr. Milton Todd Ault III
Patient Safety Technologies, Inc.
1800 Century Park East
Suite 200
Los Angeles, CA 90067

                             Re: TURNAROUND SERVICES

Dear Mr. Ault:

1.   INTRODUCTION

     This letter confirms that we, Trinity River Advisors,  LLP.  ("TRA"),  have
     been retained by you, Patient Safety  Technology,  Inc (the "Company"),  to
     provide certain financial advisory and consulting services (the "Services")
     set out below. This letter of engagement (the "Engagement") and the related
     Standard  Terms and  Conditions  constitute  the  engagement  contract (the
     "Engagement Contract") pursuant to which the Services will be provided.

2.   SCOPE OF SERVICES

     The  Services,  to be performed at your  direction,  will be carried in two
     phases and include the following:

     Phase I:

          o    Situational  assessment  of  Company  condition  with  particular
               reference to assessment of immediate and short term cash needs

          o    Securing of bridge financing

          o    Control of all immediate and pending expenditures

          o    Control and reduction of the Company's cash burn

          o    Review  and  management  of  any   outstanding   debt  and  other
               liabilities

          o    Control and preservation of Company assets

          o    Other services as agreed between TRA and the Company

     Phase II:

          o    Provision of Chief  Restructuring  Officer to take responsibility
               for Company  turnaround  commencing with the management of day to
               day operations

          o    Production  of  detailed   restructuring  plan  to  satisfy  both
               turnaround  and  growth  objectives  of the  Company  to  include
               capitalization  alternatives  for the Company and  assessment  of
               Terminal Value

          o    Sourcing  of  capital to finance  agreed  restructuring  plan and
               future growth

          o    Other services as agreed between TRA and the Company

            1700 PACIFIC AVENUE o SUITE 2600 o DALLAS, TEXAS 75201 o
                      TEL 214.840.5300 o FAX 214.840.5301

<PAGE>

Patient Safety Technologies, Inc.
November 1, 2006

     The Services may be  performed by TRA or by any  subsidiary  of TRA, as TRA
     shall  determine.  TRA  may  also  provide  Services  through  its  or  its
     subsidiaries' agents or independent  contractors.  References herein to TRA
     and its employees  shall be deemed to apply also,  unless the context shall
     otherwise  indicate,  to employees of each such  subsidiary and to any such
     agents or independent contractors and their employees.

     The Services,  as outlined above,  are subject to change as mutually agreed
     between us.

     As part of the  Services,  TRA may be  requested to assist the Company (and
     its legal or other  advisors) in negotiating  with the Company's  creditors
     and equity holders and with other interested  parties. In the event that we
     participate  in  such  negotiations,   the  representations  made  and  the
     positions advanced will be those of the Company and its management, not TRA
     or its employees.

3.   Fees

     Phase I:
     For services  rendered in connection with Phase 1 of this  assignment,  the
     Company agrees to pay TRA a weekly,  non-refundable advisory fee of $15,000
     per week, payable in advance on the first business day of each week.

     Phase II:
     For services  rendered in connection  with Phase II of this  assignment the
     Company agrees to pay TRA a weekly,  non-refundable advisory fee of $15,000
     per week,  payable on the first  business day of each week,  plus a success
     fee. The Company  agrees that the  definition and terms of such success fee
     will be mutually agreed between us prior to the commencement of Phase II.

     In addition to the fees outlined above, TRA will bill for reasonable direct
     expenses  which are  likely  to be  incurred  on your  behalf  during  this
     Engagement.  Direct expenses include reasonable and customary out-of-pocket
     expenses  which are  billed  directly  to the  engagement  such as  certain
     telephone,  overnight mail, messenger,  travel,  meals,  accommodations and
     other expenses  specifically  related to the  engagement.  Further,  if TRA
     and/or any of its employees are required to testify or provide  evidence at
     or in connection with any judicial or administrative proceeding relating to
     this matter, TRA will be compensated by you at its regular hourly rates and
     reimbursed for reasonable  allocated and direct expenses (including counsel
     fees) with respect thereto.

     Based on our initial understanding of the matter and our scope of work, our
     retainer in this matter has been sized at $60,000.  The retainer,  which is
     to be paid by the Company upon the execution of this  Engagement  Contract,
     is typically held and applied to our final bill for the Services,  with any
     excess amounts refunded to the Company.  We reserve the right,  however, to
     apply the retainer to our fees as the Engagement proceeds.  The retainer is
     not  intended  to be an  estimate  for the  total  cost  of the  work to be
     performed.

     If we do not receive  payment of the retainer or any invoice within 15 days
     of the invoice date, we shall be entitled,  without  prejudice to any other
     rights that we may have, to immediately  suspend  provision of the Services
     until all sums due are paid in full.

                                      -2-

<PAGE>

Patient Safety Technologies, Inc.
November 1, 2006

4.   TERMS AND CONDITIONS

     The attached  Standard  Terms and  Conditions  set forth the duties of each
     party with respect to the Services.  Further,  this letter and the Standard
     Terms and Conditions  attached comprise the entire Engagement  Contract for
     the  provision  of the Services to the  exclusion  of any other  express or
     implied  terms,  whether  expressed  orally or in  writing,  including  any
     conditions,  warranties  and  representations,   and  shall  supersede  all
     previous  proposals,  letters  of  engagement,  undertakings,   agreements,
     understandings, correspondence and other communications, whether written or
     oral, regarding the Services.

5.   CONFLICTS OF INTEREST

     At this time TRA is  unaware of  relationships  with  potential  interested
     parties (the "Potentially Interested Parties") that may be preclude us from
     performing the Services.  However, as you know, TRA is regularly engaged by
     new clients,  which may include one or more of the  Potentially  Interested
     Parties. We will not knowingly accept an engagement that directly conflicts
     with this Engagement without your prior written consent.

6.   ACKNOWLEDGEMENT AND ACCEPTANCE

     Please acknowledge your acceptance of the terms of this Engagement Contract
     by signing both the confirmation  below and the attached Standard Terms and
     Conditions and returning a copy of each to us at the above address.

If you have any questions regarding this letter or the attached Standard Terms
and Conditions, please do not hesitate to contact Nicholas Foley at (214) 840
5300.

Yours faithfully,

TRINITY RIVER ADVISORS, LLP.

By:      /s/  Nicholas Foley
         -----------------------------------
         Nicholas Foley

Attachment - As stated

                                      -3-
<PAGE>

Patient Safety Technologies, Inc.
November 1, 2006

CONFIRMATION OF TERMS OF ENGAGEMENT

WE AGREE TO ENGAGE TRINITY RIVER ADVISORS, LLP. UPON THE TERMS SET FORTH HEREIN
AND IN THE ATTACHED STANDARD TERMS AND CONDITIONS.

Patient Safety Technologies, Inc.

By:      /s/ Milton Todd Ault III
         --------------------------------------------
         Milton Todd Ault III

Date:     Nov 1, 2006
         --------------------------------------------

                                      -4-
<PAGE>

                          TRINITY RIVER ADVISORS, LLP.

                          STANDARD TERMS AND CONDITIONS

The following are the Standard Terms and Conditions on which we will provide the
Services to you set forth within the attached letter of engagement with Patient
Safety Technologies, Inc dated November 1, 2006. The Engagement letter and the
Standard Terms and Conditions (collectively the "Engagement Contract") form the
entire agreement between us relating to the Services and replace and supersede
any previous proposals, letters of engagement, undertakings, agreements,
understandings, correspondence and other communications, whether written or
oral, regarding the Services. The headings and titles in the Engagement Contract
are included to make it easier to read but do not form part of the Engagement
Contract.

1.   REPORTS AND ADVICE

1.1  USE AND PURPOSE OF ADVICE AND REPORTS - Any advice  given or report  issued
     by us is provided  solely for your use and  benefit and only in  connection
     with the  purpose in respect of which the  Services  are  provided.  Unless
     required by law, you shall not provide any advice given or report issued by
     us to any third party,  or refer to us or the  Services,  without our prior
     written  consent.  In no event,  regardless  of  whether  consent  has been
     provided,  shall we assume any  responsibility  to any third party to which
     any advice or report is disclosed or otherwise made available.

2.   INFORMATION AND ASSISTANCE

2.1  PROVISION OF INFORMATION  AND ASSISTANCE - Our  performance of the Services
     is dependent upon your providing us with such information and assistance as
     we may reasonably require from time to time.

2.2  PUNCTUAL AND ACCURATE  INFORMATION - You shall use reasonable  skill,  care
     and attention to ensure that all  information we may reasonably  require is
     provided on a timely  basis and is accurate  and  complete and relevant for
     the  purpose  for  which it is  required  You shall  also  notify us if you
     subsequently learn that the information provided is incorrect or inaccurate
     or otherwise should not be relied upon.

2.3  NO ASSURANCE ON FINANCIAL  DATA - While our work may include an analysis of
     financial  and  accounting  data,  the Services  will not include an audit,
     compilation or review of any kind of any financial statements or components
     thereof.  Company  management will be responsible for any and all financial
     information they provide to us during the course of this Engagement, and we
     will not  examine  or compile  or verify  any such  financial  information.
     Moreover,  the  circumstances  of the Engagement may cause our advice to be
     limited in certain respects based upon, among other matters,  the extent of
     sufficient   and  available  data  and  the   opportunity   for  supporting
     investigations in the time period. Accordingly, as part of this Engagement,
     we will not  express any opinion or other form of  assurance  on  financial
     statements of the Company.

2.4      PROSPECTIVE FINANCIAL INFORMATION - In the event the Services involve
         prospective financial information, our work will not constitute an
         examination or compilation, or apply agreed-upon procedures, in
         accordance with standards established by the American Institute of
         Certified Public Accountants or otherwise, and we will express no
         assurance of any kind on such information. There will usually be
         differences between estimated and actual results, because events and
         circumstances frequently do not occur as expected, and those
         differences may be material. We will take no responsibility for the
         achievability of results or events projected or anticipated by the
         management of the Company.

<PAGE>

3.   ADDITIONAL SERVICES

3.1  RESPONSIBILITY  FOR OTHER PARTIES - You shall be solely responsible for the
     work and fees of any other  party  engaged  by you to provide  services  in
     connection  with the  Engagement  regardless  of  whether  such  party  was
     introduced to you by us. Except as provided in this Engagement Contract, we
     shall not be responsible  for providing or reviewing the advice or services
     of  any  such  third  party,  including  advice  as to  legal,  regulatory,
     accounting or taxation  matters.  Further,  we acknowledge  that we are not
     authorized  under our  Engagement  Contract  to engage  any third  party to
     provide  services  or advice to you,  other than our agents or  independent
     contractors   engaged   to   provide   Services,   without   your   written
     authorization.

4.   CONFIDENTIALITY

4.1  RESTRICTIONS  ON  CONFIDENTIAL  INFORMATION  - Both parties  agree that any
     confidential  information  received from the other party shall only be used
     for the purposes of providing or receiving Services under this or any other
     contract between us. Except as provided below,  neither party will disclose
     the other party's  confidential  information to any third party without the
     other  party's  consent.   Confidential   information   shall  not  include
     information that:

     4.1.1     is or becomes  generally  available to the public other than as a
               result of a breach of an obligation under this Clause 4.1;

     4.1.2     is  acquired  from a third party who,  to the  recipient  party's
               knowledge,  owes no  obligation  of  confidence in respect of the
               information; or

     4.1.3     is or has been independently developed by the recipient.

4.2  DISCLOSING  CONFIDENTIAL  INFORMATION -  Notwithstanding  Clause 1.1 or 4.1
     above, either party will be entitled to disclose  confidential  information
     of the other to a third  party to the extent that this is required by valid
     legal process, provided that (and without breaching any legal or regulatory
     requirement)  where  reasonably  practicable not less than 2 business days'
     notice in writing is first given to the other party.

4.3  CITATION OF  ENGAGEMENT  - Without  prejudice  to Clause 4.1 and Clause 4.2
     above,  to the extent our engagement is or becomes known to the public,  we
     may cite the  performance  of the  Services to our clients and  prospective
     clients as an indication of our experience,  unless we and you specifically
     agree otherwise in writing.

4.4  INTERNAL QUALITY REVIEWS -  Notwithstanding  the above, we may disclose any
     information  referred to in this Clause 4 to any other TRA entity or use it
     for internal quality reviews.

4.5  MAINTENANCE  OF  WORKPAPERS -  Notwithstanding  the above,  we may keep one
     archival set of our working papers from the Engagement,  including  working
     papers  containing or reflecting  confidential  information,  in accordance
     with our internal policies.

5.   TERMINATION

5.1  TERMINATION  OF  ENGAGEMENT  WITH NOTICE - Either party may  terminate  the
     Engagement  Contract for whatever  reason upon written  notice to the other
     party. Upon receipt of such notice, we will stop all work immediately.  You
     will be  responsible  for all fees and expenses  incurred by us through the
     date the termination  notice is received.  The success fee to be negotiated
     prior to Phase II of the  engagement  will be  subject  to a  survivability
     clause to be agreed as part of that success fee arrangement.

                                      -2-
<PAGE>

5.2  CONTINUATION  OF TERMS - The terms of the Engagement  that by their context
     are  intended to be  performed  after  termination  or  expiration  of this
     Engagement  Contract,  including but not limited to, Clauses 3 and 4 of the
     Engagement  letter,  and Clauses 1.1, 4, 6 and 7 of the Standard  Terms and
     Conditions,  are intended to survive such  termination  or  expiration  and
     shall continue to bind all parties.

6.   INDEMNIFICATION AND LIABILITY LIMITATION; WAIVER OF JURY TRIAL

6.1  INDEMNIFICATION  - You agree to indemnify  and hold harmless TRA and any of
     its  subsidiaries   and  affiliates,   officers,   directors,   principals,
     shareholders,  agents,  independent contactors and employees  (collectively
     "Indemnified  Persons")  from and against any and all claims,  liabilities,
     damages,  obligations,  costs and expenses (including reasonable attorneys'
     fees and expenses and costs of investigation) arising out of or relating to
     your  retention  of TRA,  the  execution  and  delivery of this  Engagement
     Contract, the provision of Services or other matters relating to or arising
     from this  Engagement  Contract,  except to the extent that any such claim,
     liability,  obligation,  damage, cost or expense shall have been determined
     by final non-appealable order of a court of competent  jurisdiction to have
     resulted from the gross negligence or willful misconduct of the Indemnified
     Person or Persons in respect of whom such liability is asserted.

6.2  LIMITATION OF LIABILITY - You agree that no  Indemnified  Person shall have
     any  liability  as a result of your  retention of TRA,  the  execution  and
     delivery of this  Engagement  Contract,  the provision of Services or other
     matters  relating to or arising from this Engagement  Contract,  other than
     liabilities that shall have been determined by final  non-appealable  order
     of a court of  competent  jurisdiction  to have  resulted  from  the  gross
     negligence or willful  misconduct of the  Indemnified  Person or Persons in
     respect of whom such liability is asserted. Without limiting the generality
     of the foregoing,  in no event shall any  Indemnified  Person be liable for
     consequential,  indirect or punitive  damages,  damages for lost profits or
     opportunities or other like damages or claims of any kind.

6.3  WAIVER OF JURY TRIAL -TO FACILITATE  JUDICIAL  RESOLUTION AND SAVE TIME AND
     EXPENSE, YOU AND TRA IRREVOCABLY AND UNCONDITIONALLY  AGREE NOT TO DEMAND A
     TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT OF OR
     RELATING TO THE SERVICES OR ANY SUCH OTHER MATTER.

7.   GOVERNING LAW AND JURISDICTION-The Engagement Contract shall be governed by
     and  interpreted  in  accordance  with the laws of the  State of New  York,
     without giving effect to the choice of law provisions  thereof.  The United
     States  District  Court  for the  Southern  District  of New  York  and the
     appropriate  Courts  of the State of New York  sitting  in the  Borough  of
     Manhattan,  City of New York shall have exclusive  jurisdiction in relation
     to any claim, dispute or difference  concerning the Engagement Contract and
     any matter arising from it. The parties submit to the  jurisdiction of such
     Courts  and  irrevocably  waive  any  right  they may have to object to any
     action  being  brought in these  Courts,  to claim that the action has been
     brought in an inconvenient  forum or to claim that those Courts do not have
     jurisdiction.

TRINITY RIVER ADVISORS, LLP

                                      -3-
<PAGE>

CONFIRMATION OF  STANDARD TERMS AND CONDITIONS

We agree to engage Trinity River Advisors, LLP. upon the terms set forth in
these Standard Terms and Conditions as outlined above.

Patient Safety Technologies, Inc.

By:     /S/ Milton Todd Ault III
         --------------------------------------------
         Milton Todd Ault III

Date:    Nov 1, 2006
         --------------------------------------------Exhibit 4.1

               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

                      SERIES B CONVERTIBLE PREFERRED STOCK

                                       OF

                                UTIX GROUP, INC.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

            UTIX Group,  Inc., a corporation  organized  and existing  under the
laws of the State of Delaware (the "Company"),  hereby certifies that,  pursuant
to authority  vested in the Board of Directors of the Company by Article  FOURTH
of the Amended and Restated  Certificate of  Incorporation  of the Company,  the
following  resolution  was  adopted  as of  October  31,  2006 by the  Board  of
Directors  of the  Company  pursuant  to  Section  151 of the  Delaware  General
Corporation Law:

            "RESOLVED  that,  pursuant  to  authority  vested  in the  Board  of
Directors of the Company by Article FOURTH of the Company's Amended and Restated
Certificate of  Incorporation,  out of the total authorized number of 25,000,000
shares of its preferred stock, par value $0.001 per share  ("Preferred  Stock"),
there  shall be  designated  a series  of Two  Million  Six  Hundred  Ninety-Two
Thousand  Three  Hundred Eight  (2,692,308)  shares which shall be issued in and
constitute a single series to be known as "Series B Convertible Preferred Stock"
(hereinafter  called the  "Series B  Preferred  Stock").  The shares of Series B
Preferred  Stock have the voting  powers,  designations,  preferences  and other
special rights,  and  qualifications,  limitations and restrictions  thereof set
forth below:

            1.    CERTAIN DEFINITIONS.

            As used in this Certificate of Designations,  Preferences and Rights
of Series B Convertible Preferred Stock of UTIX Group, Inc., the following terms
shall have the respective meanings set forth below:

            "AFFILIATE",  as  applied  to any  Person,  means any  other  Person
directly or indirectly controlling, controlled by, or under common control with,
that Person.  For the purposes of this definition,  "control"  (including,  with
correlative meanings, the terms "controlling", "controlled by" and "under common
control  with"),  as applied to any Person,  means the  possession,  directly or
indirectly,  of the power to direct or cause the direction of the management and
policies of that Person,  whether through the ownership of voting  securities or
by contract or otherwise.

<PAGE>

            "COMMON  STOCK" means the common stock,  $0.001 par value per share,
of the Company,  including the stock into which the Series B Preferred  Stock is
convertible, and any securities into which the Common Stock may be reclassified.

            "CONVERSION  SHARES" means the shares of Common Stock into which the
Series B Preferred Stock is convertible.

            "EXCLUDED  STOCK"  means (A) capital  stock,  Options (as defined in
Section 4D(1)) or Convertible Securities (as defined in Section 4D(1)) issued to
employees,  consultants,  officers or directors  of the Company  pursuant to any
stock or option plan duly adopted by a majority of the  non-employee  members of
the  Board of  Directors  of the  Company  or a  majority  of the  members  of a
committee of non-employee  directors established for such purpose, (B) shares of
Common Stock issued upon the  conversion  or exercise of Options or  Convertible
Securities  issued prior to the date hereof,  provided that such securities have
not been  amended  since the date  hereof to  increase  the  number of shares of
Common Stock  issuable  thereunder or to lower the exercise or conversion  price
thereof, (C) securities issued pursuant to that certain Purchase Agreement dated
October 31,  2006,  among the  Company  and the  Investors  named  therein  (the
"Purchase  Agreement") and securities  issued upon the exercise or conversion of
those securities, and (D) shares of Common Stock issued or issuable by reason of
a dividend,  stock split or other  distribution  on shares of Common  Stock (but
only to the extent that such a  dividend,  split or  distribution  results in an
adjustment  in the  Conversion  Price  pursuant to the other  provisions of this
Series B Preferred Stock).

            "PERSON"  shall be  construed  in the  broadest  sense and means and
includes any natural person,  a partnership,  a corporation,  an association,  a
joint stock company, a limited liability  company, a trust, a joint venture,  an
unincorporated    organization    and   other   entity   or    governmental   or
quasi-governmental entity.

            "SERIES B STATED VALUE" means $1.30.

            "SUBSIDIARY"  means any  corporation,  association or other business
entity (i) at least 50% of the outstanding voting securities of which are at the
time owned or controlled,  directly or indirectly,  by the Company; or (ii) with
respect to which the Company  possesses,  directly or  indirectly,  the power to
direct or cause the direction of the affairs or management of such person;

            2.    DIVIDENDS.  Dividends on the Series B Preferred Stock shall be
declared  and paid from time to time as  determined  by the  Company's  Board of
Directors  out of funds  legally  available  therefor.  The  Company  shall  not
declare,  pay or set aside any  dividends or  distributions  on shares of Common
Stock (other than dividends  payable  solely in shares of Common Stock),  unless
the  holders  of Series B  Preferred  Stock  first  receive,  or  simultaneously
receive,  a  dividend  or  distribution  on each  outstanding  share of Series B
Preferred  Stock  equal  to the  product  of  (i)  the  per  share  dividend  or
distribution to be declared,  paid or set aside for the Common Stock, multiplied
by (ii) the  number of shares of Common  Stock into which such share of Series B
Preferred Stock is then convertible.

                                      -2-
<PAGE>

            3.    LIQUIDATION.  Upon any liquidation,  dissolution or winding up
of the Company,  whether voluntary or involuntary,  the holders of the shares of
Series B Preferred Stock shall be entitled,  before any  distributions  shall be
made to the holders of the Common Stock, or any other class or series of capital
stock of the Company  ranking junior to the Series B Preferred  Stock as to such
distributions, to be paid an amount per share equal to the Series B Stated Value
plus any  accrued  and unpaid  Series B Preferred  Dividends  (the  "Liquidation
Preference").  If  upon  such  liquidation,  dissolution  or  winding  up of the
Company,  whether  voluntary or involuntary,  the assets to be distributed among
the holders of the Series B  Preferred  Stock and any class or series of capital
stock  ranking  on a  parity  with  the  Series  B  Preferred  Stock  as to such
distributions  shall be  insufficient  to permit  payment to the  holders of the
Series B Preferred  Stock and any such class or series of capital stock of their
respective  liquidation  amount,  then the  entire  assets of the  Company to be
distributed  shall be distributed  pro rata to the holders of Series B Preferred
Stock and the  holders  of such class or series of  capital  stock  ranking on a
parity with the Series B Preferred Stock as to such  distributions  according to
the preferential amounts due thereon. Unless waived in writing by the holders of
at least a majority of the Series B  Preferred  Stock then  outstanding,  voting
together as one class, a consolidation or merger of the Company into or with any
other entity or entities,  a share exchange,  a sale of Common Stock or the sale
or transfer by the Company of all or  substantially  all of its assets,  in each
case under  circumstances  in which the holders of a majority in voting power of
the  outstanding  capital  stock  of the  Company,  immediately  prior to such a
merger,  consolidation,  share  exchange  or sale,  own less than a majority  in
voting  power  of  the  outstanding  capital  stock  of the  corporation  or the
surviving or resulting  corporation or acquirer, as the case may be, immediately
following  such a merger,  consolidation,  share  exchange  or sale  (each  such
transaction being hereinafter referred to as a "Corporate Transaction") shall be
deemed to be a liquidation within the meaning of this Section 3.

            4.    CONVERSION.

            4A.   RIGHT TO CONVERT.

            (a)   Subject to the terms and  conditions of this paragraph 4A, the
      holder of any share or shares of Series B  Preferred  Stock shall have the
      right,  at its option at any time,  to convert any such shares of Series B
      Preferred  Stock into such  number of fully paid and  nonassessable  whole
      shares of Common Stock as is obtained by multiplying  the number of shares
      of  Series  B  Preferred  Stock  so to be  converted  by  the  Liquidation
      Preference  per share and dividing the result by the  conversion  price of
      $1.30 per share or,  if there  has been an  adjustment  of the  conversion
      price, by the conversion  price as last adjusted and in effect at the date
      any  share or  shares of Series B  Preferred  Stock  are  surrendered  for
      conversion (such price, or such price as last adjusted,  being referred to
      herein as the  "Conversion  Price").  Such rights of  conversion  shall be
      exercised  by  the  holder  thereof  by  surrender  of  a  certificate  or
      certificates  for  the  shares  to be  converted  to  the  Company  at its
      principal  office  (or such other  office or agency of the  Company as the
      Company may designate by notice in writing to the holder or holders of the
      Series B Preferred  Stock) at any time during its usual  business hours on
      the date set forth in such  notice,  together  with a  properly  completed
      notice of conversion in the form attached to the Series B Preferred  Stock
      certificate with a statement of the name or names (with address),  subject
      to compliance with applicable  laws to the extent

                                      -3-
<PAGE>

      such  designation  shall involve a transfer,  in which the  certificate or
      certificates for shares of Common Stock, shall be issued.  Such conversion
      shall be deemed to have been  effected and the  Conversion  Price shall be
      determined  as of the close of business on the date on which such  written
      notice  shall have been  received by the Company  and the  certificate  or
      certificates for such shares shall have been surrendered as aforesaid.

            (b)   To the extent  permitted  by  applicable  law and the  listing
      requirements  of any stock market or exchange on which the Common Stock is
      then listed,  the Company  from time to time may  decrease the  Conversion
      Price by any  amount  for any  period  of time if the  period  is at least
      twenty (20) days,  the decrease is  irrevocable  during the period and the
      Board shall have made a  determination  that such decrease would be in the
      best interests of the Company,  which  determination  shall be conclusive.
      Whenever  the  Conversion  Price is  decreased  pursuant to the  preceding
      sentence,  the Company shall provide written notice thereof to the holders
      of the Series B  Preferred  Stock at least five (5) days prior to the date
      the decreased  Conversion Price takes effect,  and such notice shall state
      the decreased  Conversion  Price and the period during which it will be in
      effect.

            4B.   ISSUANCE OF CERTIFICATES;  TIME CONVERSION EFFECTED.  Promptly
      after the conversion of the Series B Preferred  Stock and surrender of the
      certificate  or  certificates  for the  share or  shares  of the  Series B
      Preferred Stock being converted,  the Company shall issue and deliver,  or
      cause to be issued and delivered,  to the holder,  registered in such name
      or names as such holder may direct,  subject to compliance with applicable
      laws  to  the  extent  such  designation  shall  involve  a  transfer,   a
      certificate or certificates for the number of whole shares of Common Stock
      issuable upon the conversion of such share or shares of Series B Preferred
      Stock.  Upon the effective date of any such conversion,  the rights of the
      holder of the shares of Series B  Preferred  Stock being  converted  shall
      cease, and the person or persons in whose name or names any certificate or
      certificates  for  shares  of Common  Stock  shall be  issuable  upon such
      conversion  shall be deemed to have become the holder or holders of record
      of the shares represented thereby.

            4C.   FRACTIONAL  SHARES;  DIVIDENDS.  No fractional shares shall be
      issued upon  conversion of the Series B Preferred Stock into Common Stock.
      In lieu of any  fractional  share  interest,  the Company shall pay to the
      converting holder an amount equal to such fractional  interest  multiplied
      by the Market Price of a share of Common Stock on the date such conversion
      is deemed to be effective..

4D.   ADJUSTMENT OF CONVERSION PRICE. If the Company shall issue or sell, or is,
      in accordance with any of subsections  4D(1) through 4D(7) hereof,  deemed
      to have  issued or sold,  any  Additional  Shares  of Common  Stock for no
      consideration  or for a  consideration  per share less than the Conversion
      Price in effect  immediately prior to the time of such issue or sale, then
      and in each such case (a "TRIGGER ISSUANCE") the then-existing  Conversion
      Price, shall be reduced, as of the close of business on the effective date
      of the Trigger Issuance, to a price determined as follows:

                                      -4-
<PAGE>

            Adjusted Conversion Price = (A X B) + D
                                        -----------
                                            A+C

                        where

                        "A"  equals  the  number  of  shares  of  Common   Stock
outstanding,  including  Additional  Shares of Common  Stock (as defined  below)
deemed to be issued hereunder, immediately preceding such Trigger Issuance;

                        "B" equals the  Conversion  Price in effect  immediately
preceding such Trigger Issuance;

                        "C"  equals the  number of  Additional  Shares of Common
Stock issued or deemed issued hereunder as a result of the Trigger Issuance; and

                        "D" equals the aggregate consideration, if any, received
or deemed to be received by the Company upon such Trigger Issuance;

provided,  however,  that in no event shall the  Conversion  Price after  giving
effect to such Trigger  Issuance be greater than the Conversion  Price in effect
prior to such Trigger Issuance.

            For purposes of this  subsection  4D,  "Additional  Shares of Common
Stock"  shall mean all shares of Common Stock issued by the Company or deemed to
be issued pursuant to this subsection 4D, other than Excluded Stock.

            For purposes of this subsection 4D, the following  paragraphs  4D(1)
to 4D(7) shall also be applicable:

            4D(1) ISSUANCE OF RIGHTS OR OPTIONS. In case at any time the Company
      shall in any manner grant  (directly  and not by assumption in a merger or
      otherwise)  any warrants or other rights to subscribe  for or to purchase,
      or any options for the purchase of,  Common Stock or any stock or security
      convertible into or exchangeable  for Common Stock (such warrants,  rights
      or options being called  "Options" and such  convertible  or  exchangeable
      stock or securities being called "Convertible  Securities") whether or not
      such  Options  or the right to convert or  exchange  any such  Convertible
      Securities are immediately exercisable,  and the price per share for which
      Common  Stock is issuable  upon the  exercise of such  Options or upon the
      conversion  or  exchange of such  Convertible  Securities  (determined  by
      dividing  (i)  the  sum  (which  sum  shall   constitute   the  applicable
      consideration)  of (x) the total amount, if any, received or receivable by
      the Company as  consideration  for the granting of such Options,  plus (y)
      the aggregate  amount of additional  consideration  payable to the Company
      upon the  exercise  of all such  Options,  plus  (z),  in the case of such
      Options which relate to Convertible  Securities,  the aggregate  amount of
      additional  consideration,  if any, payable upon the issue or sale of such
      Convertible  Securities  and upon the conversion or exchange  thereof,  by
      (ii) the total maximum  number of shares of Common Stock issuable upon the
      exercise of such  Options or upon the  conversion  or exchange of all such
      Convertible  Securities  issuable upon the exercise of such Options) shall
      be less than the Conversion Price

                                      -5-
<PAGE>

      in effect  immediately  prior to the time of the granting of such Options,
      then the total number of shares of Common Stock issuable upon the exercise
      of such Options or upon conversion or exchange of the total amount of such
      Convertible Securities issuable upon the exercise of such Options shall be
      deemed  to have  been  issued  for such  price per share as of the date of
      granting of such  Options or the issuance of such  Convertible  Securities
      and thereafter shall be deemed to be outstanding for purposes of adjusting
      the Conversion Price. Except as otherwise provided in subsection 4D(3), no
      adjustment of the Conversion  Price shall be made upon the actual issue of
      such Common Stock or of such Convertible  Securities upon exercise of such
      Options or upon the actual issue of such Common Stock upon  conversion  or
      exchange of such Convertible Securities.

            4D(2) ISSUANCE OF CONVERTIBLE SECURITIES.  In case the Company shall
      in any  manner  issue  (directly  and not by  assumption  in a  merger  or
      otherwise) or sell any Convertible  Securities,  whether or not the rights
      to exchange or convert any such  Convertible  Securities  are  immediately
      exercisable,  and the price per share for which  Common  Stock is issuable
      upon such  conversion  or exchange  (determined  by  dividing  (i) the sum
      (which sum shall constitute the applicable consideration) of (x) the total
      amount  received or  receivable  by the Company as  consideration  for the
      issue  or sale of such  Convertible  Securities,  plus  (y) the  aggregate
      amount of additional  consideration,  if any,  payable to the Company upon
      the conversion or exchange thereof,  by (ii) the total number of shares of
      Common  Stock  issuable  upon  the  conversion  or  exchange  of all  such
      Convertible  Securities) shall be less than the Conversion Price in effect
      immediately  prior to the  time of such  issue  or  sale,  then the  total
      maximum  number of shares of Common  Stock  issuable  upon  conversion  or
      exchange of all such  Convertible  Securities shall be deemed to have been
      issued  for such  price  per  share as of the date of the issue or sale of
      such  Convertible   Securities  and  thereafter  shall  be  deemed  to  be
      outstanding for purposes of adjusting the Conversion Price,  provided that
      (a) except as otherwise provided in subsection 4D(3), no adjustment of the
      Conversion  Price  shall be made upon the actual  issuance  of such Common
      Stock upon conversion or exchange of such  Convertible  Securities and (b)
      no further  adjustment of the Conversion  Price shall be made by reason of
      the issue or sale of Convertible  Securities  upon exercise of any Options
      to purchase any such Convertible  Securities for which  adjustments of the
      Conversion  Price  have been made  pursuant  to the  other  provisions  of
      subsection 4D.

            4D(3) CHANGE IN OPTION PRICE OR CONVERSION  RATE. Upon the happening
      of any of the following events, namely, if the purchase price provided for
      in any Option  referred to in  subsection  4D(l)  hereof,  the  additional
      consideration,  if any,  payable  upon the  conversion  or exchange of any
      Convertible  Securities  referred to in subsections 4D(l) or 4D(2), or the
      rate at which Convertible  Securities  referred to in subsections 4D(l) or
      4D(2) are convertible  into or exchangeable  for Common Stock shall change
      at any time (including,  but not limited to, changes under or by reason of
      provisions designed to protect against dilution),  the Conversion Price in
      effect at the time of such event  shall  forthwith  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
      changed  purchase price,  additional  consideration or conversion rate, as
      the case may be, at the time  initially  granted,  issued or sold.  On the
      termination  of any Option for which any  adjustment  was made pursuant to
      this

                                      -6-
<PAGE>

      subsection 4(D) or any right to convert or exchange Convertible Securities
      for  which  any  adjustment  was made  pursuant  to this  subsection  4(D)
      (including   without  limitation  upon  the  redemption  or  purchase  for
      consideration  of  such  Convertible   Securities  by  the  Company),  the
      Conversion  Price then in effect  hereunder  shall forthwith be changed to
      the  Conversion  Price which would have been in effect at the time of such
      termination  had such  Option or  Convertible  Securities,  to the  extent
      outstanding immediately prior to such termination, never been issued.

            4D(4) STOCK DIVIDENDS.  Subject to the provisions of this subsection
      4D, in case the Company  shall declare or pay a dividend or make any other
      distribution  upon any stock of the Company  (other than the Common Stock)
      payable in Common  Stock,  Options  or  Convertible  Securities,  then any
      Common  Stock,  Options  or  Convertible  Securities,  as the case may be,
      issuable in payment of such  dividend or  distribution  shall be deemed to
      have been issued or sold without consideration.

            4D(5)  CONSIDERATION  FOR STOCK. In case any shares of Common Stock,
      Options or  Convertible  Securities  shall be issued or sold for cash, the
      consideration  received  therefor  shall be  deemed  to be the net  amount
      received  by  the  Company  therefor,  after  deduction  therefrom  of any
      expenses  incurred or any underwriting  commissions or concessions paid or
      allowed by the  Company  in  connection  therewith.  In case any shares of
      Common Stock,  Options or Convertible  Securities  shall be issued or sold
      for a consideration other than cash, the amount of the consideration other
      than cash  received by the Company shall be deemed to be the fair value of
      such  consideration  as determined in good faith by the Board of Directors
      of  the  Company,   after  deduction  of  any  expenses  incurred  or  any
      underwriting  commissions or concessions paid or allowed by the Company in
      connection  therewith.  In case any Options  shall be issued in connection
      with the  issue  and sale of other  securities  of the  Company,  together
      comprising one integral transaction in which no specific  consideration is
      allocated to such Options by the parties  thereto,  such Options  shall be
      deemed to have been issued for such  consideration  as  determined in good
      faith by the Board of Directors of the Company.  If Common Stock,  Options
      or Convertible  Securities  shall be issued or sold by the Company and, in
      connection  therewith,   other  Options  or  Convertible  Securities  (the
      "Additional Rights") are issued, then the consideration received or deemed
      to be received by the Company shall be reduced by the fair market value of
      the  Additional  Rights  (as  determined  using the  Black-Scholes  option
      pricing model or another method  mutually agreed to by the Company and the
      holder). The Board of Directors of the Company shall respond promptly,  in
      writing,  to an inquiry by the holder as to the fair  market  value of the
      Additional Rights. In the event that the Board of Directors of the Company
      and the  holder  are  unable to agree  upon the fair  market  value of the
      Additional  Rights,  the Company and the holder  shall  jointly  select an
      appraiser,  who is  experienced  in such  matters.  The  decision  of such
      appraiser  shall be final and  conclusive,  and the cost of such appraiser
      shall be borne evenly by the Company and the holder.

            4D(6)  RECORD DATE.  In case the Company  shall take a record of the
      holders  of its Common  Stock for the  purpose  of  entitling  them (i) to
      receive a dividend or other distribution  payable in Common Stock, Options
      or  Convertible  Securities  or (ii) to subscribe

                                      -7-
<PAGE>

      for or purchase Common Stock, Options or Convertible Securities, then such
      record  date  shall be  deemed  to be the date of the issue or sale of the
      shares  of  Common  Stock  deemed  to have  been  issued  or sold upon the
      declaration of such dividend or the making of such other  distribution  or
      the date of the granting of such right of subscription or purchase, as the
      case may be.

            4D(7)  TREASURY  SHARES.  The  number  of  shares  of  Common  Stock
      outstanding at any given time shall not include shares owned or held by or
      for the  account of the Company or any of its  wholly-owned  subsidiaries,
      and the  disposition  of any such shares (other than the  cancellation  or
      retirement  thereof)  shall be considered an issue or sale of Common Stock
      for the purpose of this Section 4D.

            4E. STOCK SPLITS AND DIVIDENDS. If the Company shall, at any time or
      from time to time while the Series B Preferred Stock is outstanding, pay a
      dividend or make a  distribution  on its Common  Stock in shares of Common
      Stock,  subdivide  its  outstanding  shares of Common Stock into a greater
      number of shares or combine its outstanding  shares of Common Stock into a
      smaller number of shares or issue by  reclassification  of its outstanding
      shares of Common Stock any shares of its capital stock (including any such
      reclassification in connection with a consolidation or merger in which the
      Company  is the  continuing  corporation),  then the  Conversion  Price in
      effect  immediately  prior to the date upon which such change shall become
      effective  shall be adjusted by  multiplying  such  Conversion  Price by a
      fraction,  the  numerator of which shall be the number of shares of Common
      Stock outstanding  immediately prior to such change and the denominator of
      which  shall  be  the  number  of  shares  of  Common  Stock   outstanding
      immediately  after giving effect to such change and. Such adjustment shall
      be made successively whenever any event listed above shall occur.

            4F.   REORGANIZATION   OR    RECLASSIFICATION.    If   any   capital
      reorganization  or  reclassification  of the capital stock of the Company,
      consolidation  or merger of the Company with another  corporation in which
      the Company is not the survivor, or sale, transfer or other disposition of
      all or substantially  all of the Company's  assets to another  corporation
      shall  be  effected,  then,  as a  condition  of  such  reorganization  or
      reclassification,   consolidation,   merger,   sale,   transfer  or  other
      disposition,  lawful and  adequate  provision  shall be made  whereby each
      holder of a share or shares of Series B Preferred  Stock shall  thereafter
      have the  right  to  receive,  upon the  basis  and  upon  the  terms  and
      conditions   specified  herein  and  in  lieu  of  the  Conversion  Shares
      immediately  theretofore  receivable  upon the conversion of such share or
      shares of the Series B Preferred Stock,  such shares of stock,  securities
      or assets as would have been  issuable  or payable  with  respect to or in
      exchange  for a  number  of  Conversion  Shares  equal  to the  number  of
      Conversion Shares immediately  theretofore issuable upon conversion of the
      Series  B  Preferred  Stock,  had such  reorganization,  reclassification,
      consolidation,  merger,  sale,  transfer  or other  disposition  not taken
      place,  and in any such  case  appropriate  provision  shall be made  with
      respect  to the rights and  interests  of such  holder to the end that the
      provisions hereof (including without limitation  provisions for adjustment
      of the  Conversion  Price)  shall  thereafter  be  applicable,  as  nearly
      equivalent  as may be  practicable  in  relation  to any  shares of stock,
      securities or assets thereafter deliverable

                                      -8-
<PAGE>

      upon the exercise of such conversion  rights. The Company shall not effect
      any such consolidation, merger, sale, transfer or other disposition unless
      prior to or  simultaneously  with the  consummation  thereof the successor
      corporation (if other than the Company)  resulting from such consolidation
      or merger,  or the  corporation  purchasing  or otherwise  acquiring  such
      assets  or other  appropriate  corporation  or  entity  shall  assume  the
      obligation to deliver to the holders of the Series B Preferred  Stock,  at
      the last addresses of such holders  appearing on the books of the Company,
      such  shares of stock,  securities  or assets as, in  accordance  with the
      foregoing  provisions,  such  holders may be entitled to receive,  and the
      other  obligations  hereunder.  The provisions of this subsection 4F shall
      similarly   apply  to   successive   reorganizations,   reclassifications,
      consolidations, mergers, sales, transfers or other dispositions.

            4G.   DISTRIBUTIONS.  In case the Company  shall fix a payment  date
      for the making of a distribution to all holders of Common Stock (including
      any such distribution made in connection with a consolidation or merger in
      which  the  Company  is  the  continuing   corporation)  of  evidences  of
      indebtedness  or assets (other than cash  dividends or cash  distributions
      payable out of  consolidated  earnings or earned  surplus or  dividends or
      distributions  referred  to in  Section  4E),  or  subscription  rights or
      warrants,  the  Conversion  Price to be in effect  after such payment date
      shall  be  determined  by  multiplying  the  Conversion  Price  in  effect
      immediately  prior to such  payment date by a fraction,  the  numerator of
      which  shall be the total  number of  shares of Common  Stock  outstanding
      multiplied  by the  Market  Price (as  defined  below) per share of Common
      Stock  immediately  prior to such payment date, less the fair market value
      (as determined by the Company's  Board of Directors in good faith) of said
      assets  or  evidences  of  indebtedness   so   distributed,   or  of  such
      subscription rights or warrants, and the denominator of which shall be the
      total  number of shares of Common  Stock  outstanding  multiplied  by such
      Market Price per share of Common Stock  immediately  prior to such payment
      date.  "Market Price" as of a particular date (the "Valuation Date") shall
      mean the  following:  (a) if the Common Stock is then listed on a national
      stock  exchange,  the closing  sale price of one share of Common  Stock on
      such exchange on the last trading day prior to the Valuation  Date; (b) if
      the  Common  Stock  is  then  quoted  on The  Nasdaq  Stock  Market,  Inc.
      ("Nasdaq"),  the National  Association  of  Securities  Dealers,  Inc. OTC
      Bulletin Board (the "Bulletin  Board") or such similar quotation system or
      association,  the  closing  sale  price of one  share of  Common  Stock on
      Nasdaq,  the Bulletin Board or such other quotation  system or association
      on the last trading day prior to the Valuation Date or, if no such closing
      sale  price is  available,  the  average of the high bid and the low asked
      price quoted thereon on the last trading day prior to the Valuation  Date;
      or (c) if the Common Stock is not then listed on a national stock exchange
      or quoted on Nasdaq,  the Bulletin Board or such other quotation system or
      association,  the fair market value of one share of Common Stock as of the
      Valuation  Date,  as determined in good faith by the Board of Directors of
      the  Company  and the  holders of at least a majority  of the  outstanding
      Series B  Preferred  Stock.  If the Common  Stock is not then  listed on a
      national  securities  exchange,  Nasdaq,  the Bulletin Board or such other
      quotation  system or  association,  the Board of  Directors of the Company
      shall respond promptly,  in writing, to an inquiry by a holder of Series B
      Preferred  Stock  prior to the  conversion  of  Series B  Preferred  Stock
      hereunder  as to the  fair  market  value of a share  of  Common  Stock as
      determined by the Board of Directors of

                                      -9-
<PAGE>

      the  Company.  In the event that the Board of Directors of the Company and
      the holders of at least a majority of the  outstanding  Series B Preferred
      Stock are unable to agree upon the fair market value in respect of subpart
      (c)  hereof,  the  Company  and the  holders of at least a majority of the
      outstanding  Series B Preferred  Stock shall jointly  select an appraiser,
      who is experienced in such matters.  The decision of such appraiser  shall
      be final and  conclusive,  and the cost of such  appraiser  shall be borne
      equally by the Company and such  holders.  Such  adjustment  shall be made
      successively whenever such a payment date is fixed.

            4H.   EFFECTIVE DATE OF ADJUSTMENT.  An adjustment to the Conversion
      Price shall  become  effective  immediately  after the payment date in the
      case of each dividend or distribution and immediately  after the effective
      date of each other event which requires an adjustment.

            4I.   SUBSEQUENT  ADJUSTMENTS.  In the event that, as a result of an
      adjustment  made pursuant to this Section 4, holders of Series B Preferred
      Stock shall become  entitled to receive any shares of capital stock of the
      Company other than shares of Common Stock, the number of such other shares
      so receivable upon the conversion of the Series B Preferred Stock shall be
      subject  thereafter  to  adjustment  from time to time in a manner  and on
      terms as nearly  equivalent as practicable to the provisions  with respect
      to the Conversion Shares contained herein.

            4J.   NOTICE OF  ADJUSTMENT.  Upon any  adjustment of the Conversion
      Price,  then,  and in each such case the Company shall give written notice
      thereof by first class mail, postage prepaid,  addressed to each holder of
      shares of Series B Preferred  Stock at the address of such holder as shown
      on the books of the Company, which notice shall state the Conversion Price
      resulting  from such  adjustment,  setting forth in reasonable  detail the
      method of calculation and the facts upon which such calculation is based.

            4K.   OTHER NOTICES. In case at any time:

                  (1)   the Company  shall  declare any dividend upon its Common
      Stock  payable  in cash or  stock or make any  other  distribution  to the
      holders of its Common Stock;

                  (2)   the Company shall offer for subscription PRO RATA to the
      holders of its  Common  Stock any  additional  shares of such stock of any
      class or other rights;

                  (3)   there   shall   be   any   capital   reorganization   or
      reclassification  of the capital stock of the Company,  or a consolidation
      or merger of the Company with, or a sale of all or  substantially  all its
      assets to, another corporation; or

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

      then,  in any one or more of said cases,  the Company shall give, by first
      class mail,  postage  prepaid,  addressed  to each holder of any shares of
      Series B  Preferred  Stock at the  address of

                                      -10-
<PAGE>

      such  holder  as shown on the books of the  Company,  (a) at least 15 days
      prior  written  notice of the date on which the books of the Company shall
      close or a  record  shall be taken  for  such  dividend,  distribution  or
      subscription  rights or for  determining  rights 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, at least 15 days prior  written
      notice  of the  date  when the same  shall  take  place.  Such  notice  in
      accordance with the foregoing  clause (a) shall also specify,  in the case
      of any such dividend,  distribution  or subscription  rights,  the date on
      which the  holders of Common  Stock shall be  entitled  thereto,  and such
      notice in accordance with the foregoing  clause (b) shall also specify the
      date on which the  holders of Common  Stock  shall be entitled to exchange
      their Common Stock for securities or other property  deliverable upon such
      reorganization,    reclassification,    consolidation,    merger,    sale,
      dissolution, liquidation or winding up, as the case may be.

            4L.   STOCK TO BE RESERVED.

                  (1)   The Company will at all times reserve and keep available
      out of its authorized but unissued  Common Stock solely for the purpose of
      issuance  upon the  conversion  of the Series B Preferred  Stock as herein
      provided,  such number of shares of Common Stock as shall then be issuable
      upon the conversion of all outstanding shares of Series B Preferred Stock.
      All  shares of Common  Stock  which  shall be so issued  shall be duly and
      validly issued and fully paid and  nonassessable  and free from all liens,
      duties  and  charges  arising  out of or by reason  of the  issue  thereof
      (including, without limitation, in respect of taxes) and, without limiting
      the generality of the foregoing,  the Company  covenants that it will from
      time to time take all such action as may be  requisite  to assure that the
      par value per share of the Common  Stock is at all times  equal to or less
      than the effective Conversion Price. The Company will take all such action
      within its control as may be necessary on its part to assure that all such
      shares  of  Common  Stock  may  be so  issued  without  violation  of  any
      applicable  law or  regulation,  or of any  requirements  of any  national
      securities  exchange  upon which the Common  Stock of the  Company  may be
      listed.  The  Company  will not  take  any  action  which  results  in any
      adjustment of the  Conversion  Price if after such action the total number
      of shares of Common Stock issued and outstanding  and thereafter  issuable
      upon  exercise of all options and  conversion of  Convertible  Securities,
      including upon  conversion of the Series B Preferred  Stock,  would exceed
      the total number of shares of such class of Common  Stock then  authorized
      by the Company's Amended and Restated Certificate of Incorporation.

                  (2)   The Company will at all times reserve and keep available
      out of its  authorized  Series B Preferred  Stock such number of shares of
      Series B  Preferred  Stock as is equal to the number of shares of Series B
      Preferred Stock then  outstanding.  All shares of Series B Preferred Stock
      which shall be so issued  shall be duly and validly  issued and fully paid
      and nonassessable and free from all liens,  duties and charges arising out
      of or by reason of the issue thereof (including,  without  limitation,  in
      respect of taxes).

                                      -11-
<PAGE>

            4M.   NO REISSUANCE OF SERIES B PREFERRED STOCK.  Shares of Series B
      Preferred Stock that are converted into shares of Common Stock as provided
      herein  shall be retired  and may not be  reissued  as Series B  Preferred
      Stock but may be  reissued as all or part of another  series of  Preferred
      Stock.

            4N.   ISSUE TAX. The issuance of  certificates  for shares of Common
      Stock  upon  conversion  of the  Series B  Preferred  Stock  shall be made
      without  charge to the holders  thereof for any issuance  tax,  stamp tax,
      transfer tax, duty or charge in respect thereof, provided that the Company
      shall not be required to pay any tax,  duty or charge which may be payable
      in respect of any  transfer  involved in the  issuance and delivery of any
      certificate  in a name  other  than  that of the  holder  of the  Series B
      Preferred Stock which is being converted.

            4O.   CLOSING  OF  BOOKS.  The  Company  will at no time  close  its
      transfer books against the transfer of any Series B Preferred  Stock or of
      any shares of Common Stock issued or issuable  upon the  conversion of any
      shares of Series B Preferred Stock in any manner which interferes with the
      timely  conversion of such Series B Preferred  Stock;  PROVIDED,  HOWEVER,
      nothing  herein  shall be  construed  to prevent the Company  from setting
      record dates for the holders of its securities.

            5.    VOTING - SERIES B  PREFERRED  STOCK.  In addition to any class
voting rights provided by law and this  Certificate of Designation,  the holders
of Series B  Preferred  Stock  shall  have the right to vote  together  with the
holders of Common  Stock as a single class on any matter on which the holders of
Common Stock are entitled to vote  (including the election of  directors).  With
respect to the voting  rights of the  holders  of the Series B  Preferred  Stock
pursuant to the  preceding  sentence,  each  holder of Series B Preferred  Stock
shall be  entitled  to one vote for each  share of Common  Stock  that  would be
issuable  to such  holder  upon the  conversion  of all the  shares  of Series B
Preferred Stock held by such holder on the record date for the  determination of
shareholders entitled to vote.

            6.    CERTAIN  RESTRICTIONS.  In  addition  to any other vote of the
holders  of Series B  Preferred  Stock  required  by law or by the  Amended  and
Restated Certificate of Incorporation,  without the prior consent of the holders
of at least a majority of the  outstanding  Series B Preferred  Stock,  given in
person or by proxy,  either in writing or at a special  meeting  called for that
purpose,  at which  meeting the holders of the shares of such Series B Preferred
Stock shall vote together as a class, the Company will not:

                  (a)   authorize,   create,   designate,   establish  or  issue
      (whether  by merger or  otherwise)  (i) an  increased  number of shares of
      Series B  Preferred  Stock,  or (ii) any other  class or series of capital
      stock ranking senior to or on parity with the Series B Preferred  Stock as
      to dividends or upon  liquidation or reclassify any shares of Common Stock
      into shares  having any  preference  or priority as to  dividends  or upon
      liquidation  superior to or on parity with any such preference or priority
      of Series B Preferred Stock;

                  (b)   authorize,   create,   designate,   establish  or  issue
      (whether  by merger or  otherwise)  any  shares  of  capital  stock or any
      Options or  Convertible  Securities  or amend or

                                      -12-
<PAGE>

      waive any of the terms or provisions  of any  outstanding  capital  stock,
      Options or Convertible Securities;

                  (c)   enter into or consummate any Corporate Transaction;

                  (d)   incur,  assume or suffer to exist any  indebtedness  for
      borrowed money in excess of $500,000 in the aggregate;

                  (e)   amend, alter or repeal, whether by merger, consolidation
      or otherwise,  the Amended and Restated  Certificate of  Incorporation  or
      By-laws of the Company or the Resolutions contained in this Certificate of
      Designations of the Series B Preferred Stock and the powers,  preferences,
      privileges, relative, participating, optional and other special rights and
      qualifications,   limitations  and  restrictions   thereof,   which  would
      adversely affect any right,  preference,  privilege or voting power of the
      Series B Preferred  Stock,  or which would increase or decrease the amount
      of  authorized  shares  of the  Series B  Preferred  Stock or of any other
      series of preferred stock ranking senior to the Series B Preferred  Stock,
      with  respect to the payment of  dividends  (whether or not such series of
      preferred stock is cumulative or noncumulative as to payment of dividends)
      or upon liquidation;

                  (f)   directly  or  indirectly,  declare  or pay any  dividend
      (other  than  dividends  permitted  pursuant  to  Section 2 and  dividends
      payable in shares of Common  Stock but only to the extent  that such stock
      dividend  results in an adjustment  of the  Conversion  Price  pursuant to
      Section 4(D)(4)) or directly or indirectly purchase, redeem, repurchase or
      otherwise acquire or permit any Subsidiary to redeem, purchase, repurchase
      or  otherwise  acquire  (or make any  payment  to a sinking  fund for such
      redemption, purchase, repurchase or other acquisition) any share of Common
      Stock or any other class or series of the Company's  capital stock (except
      for shares of Common Stock  repurchased from current of former  employees,
      consultants,  or directors upon  termination of service in accordance with
      plans  approved  by the  Company's  Board of  Directors)  whether in cash,
      securities or property or in obligations of the Company or any Subsidiary;
      or

                  (g)   agree to do any of the foregoing.

            7.    NO  WAIVER.  Except as  otherwise  modified  or  provided  for
herein,  the holders of Series B Preferred  Stock shall also be entitled to, and
shall not be deemed to have waived,  any other applicable rights granted to such
holders under the Delaware General Corporation Law.

            8.    NO   IMPAIRMENT.   The   Company   will   not,   through   any
reorganization,  transfer  of  assets,  merger,  dissolution,  issue  or sale of
securities or any other voluntary action,  avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed  hereunder by the
Company but will at all time in good faith assist in the carrying out of all the
provisions of this Article FOURTH and in the taking of all such action as may be
necessary  or  appropriate  in  order  to  protect  the  conversion  rights  and
liquidation  preferences  granted  hereunder  of the  holders  of the  Series  B
Preferred Stock against impairment."

                                      -13-
<PAGE>

            9.    AMENDMENT;  WAIVER.  Any term of the Series B Preferred  Stock
may be  amended or waived  (including  the  adjustment  provisions  included  in
Section 4(D) hereof) upon the written  consent of the Company and the holders of
at least a majority of the Series B  Preferred  Stock then  outstanding,  voting
together as a single  class;  PROVIDED,  HOWEVER  that the number of  Conversion
Shares issuable  hereunder and the Conversion Price may not be amended,  and the
right to  convert  the  Series B  Preferred  Stock may not be altered or waived,
without  the  written  consent of the  holders of all of the Series B  Preferred
Stock then outstanding.

            10.   ACTION BY HOLDERS.  Any action or consent to be taken or given
by the holders of the Series B Preferred  Stock may be given either at a meeting
of the holders of the Series B Preferred  Stock called and held for such purpose
or by written consent.

                            [Execution Page Follows]

                                      -14-
<PAGE>

      IN  WITNESS   WHEREOF,   the  undersigned  has  executed   Certificate  of
Designations, Preferences and Rights this 31st day of October, 2006.

                                       UTIX GROUP, INC.

                                       By:  /s/ Anthony G. Roth
                                          ---------------------------------
                                                Name: Anthony Roth
                                                Title: President and CEO

                                      -15-

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