Document:

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                                                                  EXHIBIT 10(ad)

         THIS WARRANT AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
         OR ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED SOLELY FOR
         INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
         DISTRIBUTION THEREOF. THE WARRANT REPRESENTED BY THIS INSTRUMENT AND
         THE OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE SOLD,
         TRANSFERRED, OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO
         AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED, WITH RESPECT THERETO OR IN ACCORDANCE WITH AN OPINION
         OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAN AN
         EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

No. W-2002 - __                  WARRANT                       February __, 2002

                  To Purchase _______ Shares of Common Stock of
                      Universal Automotive Industries, Inc.

         1. Number of Shares; Exercise Price; Term. This certifies that, in
consideration for $1.00 and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, _______ ("Holder") is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time from one year from the date of the first closing (the "First Closing")
of the Company's offering (the "Offering") of units consisting of one share of
common stock, par value $0.01 per share ("Common Stock") and one warrant to
purchase one share of Common Stock, and until at or prior to 11:59 p.m. Central
Time, on a date which is four years from the date of the First Closing (the
"Expiration Time"), but not thereafter, to acquire from the Company, in whole or
in part, from time to time, up to _______ fully paid and nonassessable shares
(the "Shares") of common stock, $.01 par value, of the Company at a purchase
price of $4.00 per Share (the "Exercise Price"). Such number of Shares and
Exercise Price are subject to adjustment as provided herein, and all references
to "Common Stock" and "Exercise Price" herein shall be deemed to include any
such adjustment or series of adjustments.

         2. Exercise of Warrant. The purchase rights represented by this Warrant
are exercisable by Holder, in whole or in part, at any time, or from time to
time, subsequent to the date hereof, by the surrender of this Warrant and the
Notice of Exercise annexed hereto, all duly completed and executed on behalf of
Holder, at the office of the Company in Alsip, Illinois (or such other office or
agency of the Company as it may designate by notice in writing to Holder at the
address of Holder appearing on the books of the Company). Payment of the
Exercise Price for the Shares thereby purchased shall be made by cash, certified
or cashier's check or wire transfer payable to the order of the Company, at
10:00 a.m., Central Time, on the day following surrender of this Warrant and the
Notice of Exercise, in an amount equal to the purchase price of the Shares
thereby purchased. Thereupon, Holder as the holder of this Warrant, shall be
entitled to receive from the Company a stock certificate in proper form
representing the number of Shares so purchased, and a new Warrant in
substantially identical form and dated as of such exercise for the purchase of
that number of Shares equal to the difference, if any, between the number of
Shares subject hereto and the number of Shares as to which this Warrant is so
exercised.

         3. Issuance of Shares. Certificates for Shares purchased hereunder
shall be delivered to Holder promptly after the date on which this Warrant shall
have been exercised in accordance with the terms hereof. The Company hereby
represents and warrants that all Shares that may be issued upon the exercise of
this Warrant will, upon such exercise, be duly and validly authorized and
issued, fully paid and nonassessable and free from all taxes, liens and charges
in respect of the issuance thereof (other than

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liens or charges created by or imposed upon Holder as the holder of the Warrant
or taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein). The Company agrees that the Shares so issued shall be and
shall for all purposes be deemed to have been issued to Holder as the record
owner of such Shares as of the close of business on the date on which this
Warrant shall have been exercised or converted in accordance with the terms
hereof.

         4. No Fractional Shares or Scrip. No fractional Shares or scrip
representing fractional Shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional Share to which Holder as the holder would
otherwise be entitled, Holder shall be entitled, at its option, to receive
either (i) a cash payment equal to the excess of fair market value for such
fractional Share above the Exercise Price for such fractional share (as
determined in good faith by the Company) or (ii) a whole Share if Holder tenders
the Exercise Price for one whole share.

         5. No Rights as Shareholder. This Warrant does not entitle Holder as a
holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof.

         6. Charges, Taxes and Expenses. Certificates for Shares issued upon
exercise of this Warrant shall be issued in the name of Holder as the holder of
this Warrant. Issuance of certificates for Shares upon the exercise of this
Warrant shall be made without charge to Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificates, all of
which taxes and expenses shall be paid by the Company.

         7. No Transfer. This Warrant and any rights hereunder are not
transferable by Holder as the holder hereof, in whole or in part, without the
prior written consent of the Company.

         8. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
the surrender hereof by Holder as the registered holder at the above-mentioned
office or agency of the Company, for a new Warrant on substantially identical
form and dated as of such exchange. The Company shall maintain at the
above-mentioned office or agency a registry showing the name and address of
Holder as the registered holder of this Warrant. This Warrant may be surrendered
for exchange or exercise, in accordance with its terms, at the office of the
Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.

         9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation
and reissuance, in lieu of this Warrant.

         10. Reservation of Common Stock. The Company will at all times reserve
and keep available, solely for issuance, sale and delivery upon the exercise of
this Warrant, such number of Shares equal to the number of Shares purchasable
upon the exercise of this Warrant. All such Shares shall be duly authorized and,
when issued upon exercise of this Warrant in accordance with the terms hereof,
will be validly issued and fully paid and nonassessable, with no liability on
the part of Holder. Such Shares will not be subject to any preemptive rights.

         11. Listing on Securities Exchanges, Etc. The Company will maintain the
listing of all Shares issuable or issued from time to time upon exercise of this
Warrant on each securities exchange or market or trading system on which any
shares of Common Stock are then or at any time thereafter listed or traded, but
only to the extent and for such period of time as such shares of Common Stock
are so

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listed.

         12. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal
holiday, then such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday.

         13. Adjustments and Termination of Rights. The purchase price per Share
and the number of Shares purchasable hereunder are subject to adjustment from
time to time as follows:

                  (a) Merger or Consolidation. If at any time there shall be a
merger or a consolidation of the Company with or into another corporation when
the Company is not the surviving corporation, then, as part of such merger or
consolidation, lawful provision shall be made so that Holder as the holder of
this Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other securities
or property (including cash) of the successor corporation resulting from such
merger or consolidation, to which Holder as the holder of the Shares deliverable
upon exercise of this Warrant would have been entitled in such merger or
consolidation if this Warrant had been exercised immediately before such merger
or consolidation. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Warrant with respect to the rights and
interests of Holder as the holder of this Warrant after the merger or
consolidation. This provision shall apply to successive mergers or
consolidations.

                  (b) Reclassification, Recapitalization, etc. If the Company at
any time shall, by subdivision, combination or reclassification of securities,
recapitalization, automatic conversion, or other similar event affecting the
number or character of outstanding Shares, or otherwise, change any of the
securities as to which purchase rights under this Warrant exist into the same or
a different number of securities of any other class or classes, this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities that were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change.

                  (c) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant remains outstanding and unexpired shall
split, subdivide or combine the securities as to which purchase rights under
this Warrant exist, the Exercise Price shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.

                  (d) Common Stock Dividends. If the Company at any time while
this Warrant is outstanding and unexpired shall pay a dividend with respect to
Common Stock payable in Shares, or make any other distribution with respect to
Common Stock in Shares, then the Exercise Price shall be adjusted, from and
after the date of determination of the shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Exercise
Price in effect immediately prior to such date of determination by a fraction
(i) the numerator of which shall be the total number of Shares outstanding
immediately prior to such dividend or distribution, and (ii) the denominator of
which shall be the total number of Shares outstanding immediately after such
dividend or distribution. This paragraph shall apply only if and to the extent
that, at the time of such event, this Warrant is then exercisable for Common
Stock.

                  (e) Issuance of Shares at Other Than Exercise Price. If the
Company should issue shares of its Common Stock other than in an Exempt Offering
(as defined below) at a price per share less than $1.39, then the Exercise Price
shall be adjusted to equal the result obtained by dividing (i) the sum

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of (A) the total number of shares of Common Stock outstanding immediately prior
to such issuance multiplied by the then effective Exercise Price and (B) the
value of the consideration received by the Company upon such issuance of such
shares of Common Stock, by (ii) the total number of shares of Common Stock
outstanding immediately after such issuance. For the purposes of this Section
13(e), the issuance of securities convertible into or exercisable for Common
Stock shall be deemed the issuance of the number of shares of Common Stock into
which such securities are convertible or for which such securities are
exercisable, and the consideration received for such securities shall be deemed
to include the minimum aggregate amount payable upon conversion or exercise of
such securities. In the event the right to convert or exercise such securities
expires unexercised, the Exercise Price of Shares issuable upon the exercise
hereof shall be readjusted accordingly. The sale or other disposition of any
shares of Common Stock held in the treasury of the Company, or of any securities
resulting from any reclassification of such shares or other securities which
were effected while they were held in the treasury of the Company, shall be
deemed an issuance thereof. As used in this Section 13(e), each of the following
offerings shall be considered an "Exempt Offering": (i) the issuance of shares
of Common Stock upon conversion of shares of the Company's Series A or Series B
Preferred Stock; (ii) the issuance of an aggregate of 1,400,000 shares of Common
Stock to employees and consultants of the Company and its subsidiaries after the
date hereof pursuant to stock option plans and stock ownership plans approved by
the Company's board of directors (as such number of shares is proportionately
adjusted for subsequent stock splits, combinations, and dividends affecting the
Common Stock); and (iii) the issuance of Common Stock upon the exercise of
options and warrants issued by the Company and outstanding as of the date of the
Company's Confidential Private Placement Memorandum for the Offering (subject to
adjustment under the terms thereof).

                  (f) Adjustment of Number of Shares. Upon each adjustment in
the Exercise Price pursuant to Section 13(c), 13(d) or 13(e)hereof, the number
of Shares purchasable hereunder shall be adjusted, to the nearest whole Share,
to the product obtained by multiplying the number of Shares purchasable
immediately prior to such adjustment in the Exercise Price by a fraction (i) the
numerator of which shall be the Exercise Price immediately prior to such
adjustment, and (ii) the denominator of which shall be the Exercise Price
immediately after such adjustment.

         14. Notice of Adjustments; Notices. Whenever the Exercise Price or
number or type of securities issuable hereunder shall be adjusted pursuant to
Section 13 hereof, the Company shall issue and provide to Holder as the holder
of this Warrant a certificate signed by an officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment.

         15. Registration Rights. The Holder shall have the right to register
the Shares issuable upon exercise of this Warrant (in the event the Warrant is
exercised to purchase Shares), as set forth in the Registration Rights Agreement
of even date herewith, which provisions are incorporated herein and made a part
hereof.

         16. Governing Law. This Warrant shall be binding upon any successors or
assigns of the Company. This Warrant shall constitute a contract under the laws
of Illinois and for all purposes shall be construed in accordance with and
governed by the laws of said state, without giving effect to conflict of laws
principles.

         17. Amendments. This Warrant may be amended and the observance of any
term of this Warrant may be waived only with the written consent of the Company
and Holder as the holder hereof.

         18. Notice. All notices hereunder shall be in writing and shall be
effective (a) on the day on

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which delivered if delivered personally or transmitted by telex, telegram or
telecopier with evidence of receipt, (b) one (1) business day after the date on
which the same is delivered to a nationally recognized overnight courier service
with evidence of receipt, or (c) five (5) business days after the date on which
the same is deposited, postage prepaid, in the U.S. mail, sent by certified or
registered mail, return receipt requested, and addressed to the party to be
notified at the address indicated below for the Company, or at the address for
Holder as the holder set forth in the registry maintained by the Company
pursuant to Section 8, or at such other address and/or telecopy or telex number
and/or to the attention of such other person as the Company or Holder as the
holder may designate by ten (10) day advance written notice.

         19. Entire Agreement. This Warrant and the forms attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.

         IN WITNESS WHEREOF, Universal Automotive Industries, Inc. has caused
this Warrant to be executed by its duly authorized officer.

Dated: As of February __, 2002

                                        UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.

                                        By:
                                        Name:
                                        Title:

                                        Name of Holder:
                                        Address:

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                               NOTICE OF EXERCISE

To:      Universal Automotive Industries, Inc.

         1. The undersigned hereby elects to purchase ________________ shares
(the "Shares") of common stock $.01 par value of Universal Automotive
Industries, Inc. (the "Company") pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price and any transfer taxes
payable pursuant to the terms of the Warrant, together with an investment
Representation Statement in form and substance satisfactory to legal counsel to
the Company.

         2. The Shares to be received by the undersigned upon exercise of the
Warrant are being acquired for his, her or its own account, not as a nominee or
agent, and not with a view to resale or distribution of any part thereof, and
the undersigned has no present intention of selling, granting any participation
in, or otherwise distributing the same, except in compliance with applicable
federal and state securities laws. The undersigned further represents that he,
she or it does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation to such person or to any
third person, with respect to the Shares. The undersigned believes he, she or it
has received all the information he, she or it considers necessary or
appropriate for deciding whether to purchase the Shares.

         3. The undersigned understands that the Shares are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from the Company in transactions not involving a public offering
and that under such laws and applicable regulations such securities may be
resold without registration under the Securities Act of 1933, as amended (the
"Act"), only in certain limited circumstances. In this connection, the
undersigned represents that he, she or it is familiar with Rule 144 of the Act,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.

         4. The undersigned understands the certificates evidencing the Shares
may bear one or all of the following legends:

                  (a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY
         HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
         CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THEY MAY NOT BE
         SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISTRIBUTED
         IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
         OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS."

                  (b) Any legend required by applicable state law.

         5. Please issue a certificate or certificates representing said Shares
in the name of the undersigned.

         6. Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned.

                                                              (Print Name)

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                                                       By:
----------------------
        Date                                                   Title:

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                                                                  EXHIBIT 10(ae)

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (the "Agreement") is made and
entered into as of February 26, 2002, by and between UNIVERSAL AUTOMOTIVE
INDUSTRIES, INC., a Delaware corporation (the "Company"), and each of the
persons executing this Agreement in the space provided on the signature page
hereto (each a "Holder" and collectively, the "Holders").

                                    RECITALS

         A. Holder has agreed to purchase units (the "Units") comprised of one
share of the Company's common stock, par value $.01 per share (the "Shares"),
and one warrant (the "Warrant") to purchase one share of the Company's common
stock, par value $.01 per share (the "Conversion Shares") pursuant to a
Subscription Agreement between the Company and Holder in connection with a
private placement of the Units by the Company to which this form of Agreement
has been appended as an exhibit.

         B. The Warrants are exercisable, in whole or in part, from time to
time, commencing one (1) year from the date of the Company's first closing in
the offering of the Units (the "Initial Exercise Date"), and prior to 5:00 p.m.
Central Time, on the date which four (4) years from the date of the last closing
in the offering of the Units. If a Warrant is not exercised on or before the
expiration date, the unexercised portion of the Warrant will lapse and the
Warrant shall have no more force or effect.

         C. As additional consideration for the purchase of the Units by Holder,
the Company desires to grant to Holder registration rights with respect to the
Shares and the Conversion Shares.

         NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:

         1. (a) Registration Rights. Within six (6) months from the date of the
last closing in the offering of the Units, the Company agrees to file with the
U.S. Securities and Exchange Commission (the "Commission") a registration
statement for resale of the Shares and the Conversion Shares by the Holders and
will use its best efforts to have the registration statement declared effective
as soon as possible and thereafter to remain effective until the latest date
that all of the Shares or Conversion Shares held or to be held by the Holder can
be sold without restrictions under Rule 144(k) of the Securities Act.

         As used herein, "Registrable Securities" shall mean the Shares and the
Conversion Shares.

                  (b) The Company shall use its best efforts to cause the
Registrable Securities so registered to be registered or qualified for sale
under the securities or Blue Sky Laws of such jurisdictions as the Holders may
reasonably request; provided, however, that the Company shall not be required to
qualify to do business in any state by reason of this Section 1(b) in which it
is not otherwise required to qualify to do business.

                  (c) The Company shall furnish to each Holder copies of the
registration statement and of each amendment and supplement thereto (in each
case, including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each supplement or
amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations thereunder, and such other
documents, as any Holder may reasonably request.

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                  (d) The Company agrees that until all the Registrable
Securities have been sold under a registration statement or pursuant to Rule 144
under the Securities Act, it shall use its best efforts to keep current in
filing all reports, statements and other materials required to be filed with the
Commission.

                  (e) The Company shall notify the Holders promptly when such
registration statement has become effective or a supplement to any prospectus
forming a part of such registration statement has been filed.

                  (f) The Company shall promptly notify the Holders at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, would include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing, and, at the reasonable request
of the Holders of the Registrable Securities, prepare and furnish to them such
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities or securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made.

                  (g) The Company shall prepare and file with the Commission,
promptly upon the request of the Holders, any amendments or supplements to such
registration statement or prospectus which, in the reasonable opinion of the
Holders (and reasonably concurred in by the Company), is required under the
Securities Act or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities.

                  (h) The Company shall advise the Holders promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such registration
statement under the Act or the initiation or threatening of any proceeding for
such purpose, and promptly use its best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued.

                  (i) The Company shall use its best efforts to cause all such
Registrable Securities to be listed or included on each securities exchange or
over-the-counter market on which similar securities issued by the Company are
then listed or included and file all required listing applications and pay all
required fees in connection with such listings.

                  (j) The Company shall cooperate with Holders in effecting the
transfer of any shares sold pursuant to a registration effected hereunder.

                  (k) The Company shall pay all expenses incident to its
performance of or compliance with its obligations under this Agreement to effect
the registration of Registrable Securities required hereunder, including,
without limitation, all registration, filing, Nasdaq Stock Market fees, all
underwriting fees, expenses, discounts and commissions, all registration,
filing, qualification and other fees and expenses of complying with state
securities or "blue-sky" laws, all word processing, duplicating and printing
expenses, messenger, shipping and delivery expenses, but excluding any legal
fees and expenses of counsel retained by the Holders of the Registrable
Securities being registered, and further excluding any fees and disbursement of
underwriters, underwriting discounts and commissions and

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transfer taxes, if any, in respect of Registrable Securities, which fees,
expenses, discounts, commissions and taxes in respect of Registrable Securities
shall be incurred by the Holders in connection with any transfer or other
disposition and their shares of the Company's stock after such registration
shall have been effected by the Company.

         2. Indemnification. (a) Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless each Holder, its officers,
directors, partners, employees, agents, and counsel, and each person, if any,
who controls any such person within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all loss, liability, charge, claim,
damage, and expense (including all reasonable costs associated with
investigating and defending any such loss, liability, charge or claim)
whatsoever, as and when incurred, arising out of, based upon, or in connection
with:

                  (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, relating to the sale of any of the
Registrable Securities or (B) in any application or other document or
communication (in this Section 2 collectively called an "Application") executed
by or on behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Registrable Securities under the securities or Blue Sky Laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, unless (x) such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company with respect to such Holder by or on behalf
of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any Application, as the case may be, or (y) such loss, liability,
charge, claim, damage or expense arises out of such Holder's failure to comply
with the terms and provisions of this Agreement; or

                  (ii) any breach of any representation, warranty, covenant, or
agreement of the Company contained in this Agreement. The foregoing agreement to
indemnify shall be in addition to any liability the Company may otherwise have,
including liabilities arising under this Agreement.

         If any action is brought against any Holder or any of its officers,
directors, partners, employees, agents, or counsel, or any controlling persons
of such person (an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such indemnified
party or parties shall promptly notify the Company in writing of the institution
of such action (but the failure so to notify shall not relieve the Company from
any liability other than pursuant to this Section 2(a)) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties), provided that
the indemnified party shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party or parties unless the employment of such counsel shall
have been authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall be
borne by the Company and the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties.

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         Anything in this Section 2 to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent, which shall not be unreasonably withheld. The
Company shall not, without the prior written consent of each indemnified party
that is not released as described in this sentence, settle or compromise any
action, or permit a default or consent to the entry of judgment in or otherwise
seek to terminate any pending or threatened action, in respective of which
indemnity may be sought hereunder (whether or not any indemnified party is a
party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify Holders of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the same of any Registrable Securities
or any preliminary prospectus, prospectus, registration statement, or amendment
or supplement thereto, or any Application relating to any sale of any
Registrable Securities.

                  (b) Each Holder agrees to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held by
such Holder, each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and its or their respective counsel, to the same extent as the foregoing
indemnify from the Company to such Holder in Section 2(a), but only with respect
to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any Application, in
reliance upon and in conformity with written information furnished to the
Company with respect to such Holder by or on behalf of such Holder, for
inclusion in any such registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any Application, as
the case may be. If any action shall be brought against the Company or any other
person so indemnified based on any such registration statement, preliminary
prospectus, or final prospectus or any amendment or supplement thereto, or in
any Application, and in respect of which indemnity may be sought against such
Holder pursuant to this Section 2(b), such Holder shall have the rights and
duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 2(a).

                  (c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Sections 2(a) or
2(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such cases, or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act or otherwise, then
the Company (including for this purpose any contribution made by or on behalf of
any director of the Company, any officer of the Company who signed any such
registration statement, any controlling person of the Company, and its or their
respective counsel), as one entity, and the Holders of the Registrable
Securities, included in such registration in the aggregate (including for this
purpose any contribution by or on behalf of an indemnified party), as a second
entity, shall contribute to the losses, liabilities, claims, damages, and
expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Company and
such Holders in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses. The relative fault, in the case of
an untrue statement, alleged untrue statement, omissions, or alleged omission
shall be determined by, among other things, whether such statement, alleged
statement, omission, or alleged omission relates to information supplied by the
Company or by such Holders, and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission.

                                       4
<PAGE>

         The Company and Holders agree that it would be unjust and inequitable
if the respective obligations of the Company and the Holders for contribution
were determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages, and expenses (even if each Holder and the other
indemnified parties were treated as one entity for such purpose) or by any other
method of allocation that does not reflect the equitable considerations referred
to in this Section 2(c). In no case shall any Holder be responsible for a
portion of the contribution obligation imposed on all Holders in excess of its
pro rata share based on the number of Shares owned by him, her or it and
included in such registration as compared to the number of Shares owned by all
Holders and included in such registration. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.

         For purposes of this Section 2(c), each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act and each officer, director, partner, employee, agent,
and counsel of Holder or control person shall have the same rights to
contribution as such Holder or control person and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, each director of the Company, and its or
their respective counsel shall have the same rights to contribution as the
Company, subject in each case to the provision of this Section 2(c). Anything in
this Section 2(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2(c) is intended to supersede any
right to contribution under the Securities Act, the Exchange Act or otherwise.

         3.       Miscellaneous.

                  (a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.

                  (b) Agreements and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless such amendment, modification or supplement is in writing
and signed by the parties hereto.

                  (c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing delivered by hand-delivery,
registered first-class mail, or telecopier, initially to the address set forth
below, and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 3(c):

<TABLE>
<S>                                               <C>
IF TO THE COMPANY:                                WITH A COPY TO:
Universal Automotive Industries, Inc.             Shefsky & Froelich Ltd.
11859 South Central Street                        444 North Michigan Avenue - Suite 2500
Alsip, Illinois 60803                             Chicago, IL  60611
Attention:        Arvin Scott, Chief              Attention:        Mitchell D. Goldsmith, Esq.
Executive Officer                                 Facsimile:        (312) 527-3194
Facsimile:        (708) 489-5204
</TABLE>

                                       5
<PAGE>

IF TO THE HOLDERS:
At the address set forth in each Holder's
Subscription Agreement for the Units

All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; two (2) business days after
being deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged, if telecopied.

                  (d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent holders of the Registrable Shares subject to the terms
hereof.

                  (e) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without reference
to its conflicts of law provisions.

                  (h) Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions contained herein shall not be affected or
impaired thereby.

                  (i) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of this agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, concerning the registration rights granted by the Company
pursuant to this Agreement.

                  (j) Recitals. The Recitals to this Agreement are hereby
incorporated by reference into this Agreement as if fully set forth herein.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.

UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.               HOLDER:

By:                                                 By:_________________________

      Arvin Scott, Chief Executive Officer          ____________________________
                                                    [Print Name]

                                       6

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