Document:

Exhibit 10.2

       THE SECURITIES  REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH
SECURITIES HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED,  (II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K),  OR (III)
THE COMPANY HAS  RECEIVED AN OPINION OF COUNSEL  REASONABLY  SATISFACTORY  TO IT
THAT  SUCH  TRANSFER  MAY  LAWFULLY  BE  MADE  WITHOUT  REGISTRATION  UNDER  THE
SECURITIES ACT OF 1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

       SUBJECT TO THE  PROVISIONS  OF SECTION 10 HEREOF,  THIS WARRANT  SHALL BE
VOID AFTER 5:00 P.M. EASTERN TIME ON JANUARY 13, 2011 (THE "EXPIRATION DATE").

No. __________

                                UTIX GROUP, INC.

                      WARRANT TO PURCHASE _______ SHARES OF
                    COMMON STOCK, PAR VALUE $0.001 PER SHARE

       For VALUE RECEIVED,  ____________________  ("Warrantholder"), is entitled
to purchase, subject to the provisions of this Warrant, from UTIX Group, Inc., a
Delaware corporation ("Company"),  at any time not later than 5:00 P.M., Eastern
time, on the Expiration Date (as defined above),  at an exercise price per share
equal to $0.04 (the  exercise  price in effect being herein  called the "Warrant
Price"),  ______ shares(1) ("Warrant Shares") of the Company's Common Stock, par
value  $0.001  per  share  ("Common  Stock").   The  number  of  Warrant  Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to  adjustment  from time to time as  described  herein.  This  Warrant is being
issued  pursuant to the  Purchase  Agreement,  dated as of January 13, 2006 (the
"Purchase Agreement"),  among the Company and the initial holders of the Company
Warrants (as defined below).  Capitalized  terms used herein have the respective
meanings  ascribed thereto in the Purchase  Agreement  unless otherwise  defined
herein.

       Section 1.   REGISTRATION.  The  Company  shall  maintain  books  for the
transfer  and  registration  of the Warrant.  Upon the initial  issuance of this
Warrant,  the Company  shall issue and  register  the Warrant in the name of the
Warrantholder.

       Section 2. TRANSFERS. As provided herein, this Warrant may be transferred
only pursuant to a  registration  statement  filed under the  Securities  Act of
1933, as amended (the "Securities Act"), or an exemption from such registration.
Subject to such restrictions,  the Company shall transfer this Warrant from time
to time upon the books to be maintained  by the Company for that  purpose,  upon
surrender hereof for transfer,  properly  endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be reasonably required

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(1)    25% warrant coverage.

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by the Company, including, if required by the Company, an opinion of its counsel
to the effect that such transfer is exempt from the registration requirements of
the Securities  Act, to establish that such transfer is being made in accordance
with the terms hereof,  and a new Warrant shall be issued to the  transferee and
the surrendered Warrant shall be canceled by the Company.

       Section 3. EXERCISE OF WARRANT.  Subject to the  provisions  hereof,  the
Warrantholder may exercise this Warrant,  in whole or in part, at any time prior
to its  expiration  upon  surrender of the Warrant,  together with delivery of a
duly executed  Warrant  exercise form, in the form attached hereto as Appendix A
(the "Exercise Agreement") and payment by cash, certified check or wire transfer
of funds (or, in certain circumstances,  by cashless exercise as provided below)
of the  aggregate  Warrant  Price for that  number of Warrant  Shares then being
purchased,  to the Company  during normal  business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the Warrantholder).  The Warrant Shares
so  purchased  shall  be  deemed  to be  issued  to  the  Warrantholder  or  the
Warrantholder's designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been  surrendered  (or the
date evidence of loss,  theft or  destruction  thereof and security or indemnity
satisfactory to the Company has been provided to the Company), the Warrant Price
shall  have been  paid and the  completed  Exercise  Agreement  shall  have been
delivered.  Certificates  for the Warrant Shares so purchased shall be delivered
to the Warrantholder  within a reasonable time, not exceeding three (3) business
days,  after this Warrant  shall have been so  exercised.  The  certificates  so
delivered  shall  be  in  such   denominations   as  may  be  requested  by  the
Warrantholder  and shall be registered in the name of the  Warrantholder or such
other name as shall be  designated  by the  Warrantholder,  as  specified in the
Exercise  Agreement.  If this Warrant  shall have been  exercised  only in part,
then, unless this Warrant has expired, the Company shall, at its expense, at the
time of  delivery  of such  certificates,  deliver  to the  Warrantholder  a new
Warrant  representing the right to purchase the number of shares with respect to
which this Warrant shall not then have been exercised. As used herein, "business
day" means a day,  other than a Saturday  or Sunday,  on which banks in New York
City are open for the general  transaction  of business.  Each  exercise  hereof
shall   constitute   the   re-affirmation   by  the   Warrantholder   that   the
representations and warranties  contained in Section 5 of the Purchase Agreement
are true and correct in all material  respects with respect to the Warrantholder
as of the time of such exercise.

       Section 4. COMPLIANCE WITH THE SECURITIES ACT OF 1933. Except as provided
in the  Purchase  Agreement,  the  Company may cause the legend set forth on the
first page of this Warrant to be set forth on each Warrant, and a similar legend
on any security issued or issuable upon exercise of this Warrant, unless counsel
for the  Company is of the opinion as to any such  security  that such legend is
unnecessary.

       Section 5. PAYMENT OF TAXES.  The Company will pay any documentary  stamp
taxes  attributable to the initial  issuance of Warrant Shares issuable upon the
exercise  of the  Warrant;  provided,  however,  that the  Company  shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the  Warrantholder  in respect of which such  shares are
issued,  and in such case, the Company shall not be required to issue or deliver
any  certificate

                                      -2-
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for Warrant Shares or any Warrant until the person  requesting the same has paid
to the  Company  the  amount  of such tax or has  established  to the  Company's
reasonable  satisfaction that such tax has been paid. The Warrantholder shall be
responsible for income taxes due under federal,  state or other law, if any such
tax is due.

       Section 6. MUTILATED OR MISSING  WARRANTS.  In case this Warrant shall be
mutilated,  lost, stolen, or destroyed,  the Company shall issue in exchange and
substitution of and upon surrender and cancellation of the mutilated Warrant, or
in lieu of and  substitution  for the Warrant lost,  stolen or destroyed,  a new
Warrant of like tenor and for the  purchase of a like number of Warrant  Shares,
but only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed  Warrant,  reasonable  indemnity  or bond  with  respect  thereto,  if
requested by the Company.

       Section 7. RESERVATION OF COMMON STOCK.  From and after the effectiveness
of the Amendment and the Reverse  Split,  the Company shall at all times reserve
and keep available out of its  authorized  but unissued  shares of Common Stock,
solely for the purpose of providing  for the  exercise of the Company  Warrants,
such  number  of shares of  Common  Stock as shall  from time to time  equal the
number of shares  sufficient  to permit the exercise of the Company  Warrants in
accordance  with their  respective  terms.  The Company  agrees that all Warrant
Shares issued upon due exercise of the Warrant shall be, at the time of delivery
of the  certificates for such Warrant Shares,  duly authorized,  validly issued,
fully paid and non-assessable shares of Common Stock of the Company.

       Section 8.  ADJUSTMENTS.  Subject and pursuant to the  provisions of this
Section  8, the  Warrant  Price and  number of  Warrant  Shares  subject to this
Warrant  shall  be  subject  to  adjustment  from  time  to  time  as set  forth
hereinafter.

              (a)    If the  Company  shall,  at any  time or from  time to time
while this Warrant 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 (i) the Warrant
Price in effect  immediately prior to the date on which such change shall become
effective shall be adjusted by multiplying such Warrant 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 (ii) the number of Warrant Shares  purchasable  upon exercise of
this  Warrant  shall be adjusted  by  multiplying  the number of Warrant  Shares
purchasable upon exercise of this Warrant immediately prior to the date on which
such change shall  become  effective  by a fraction,  the  numerator of which is
shall be the Warrant Price in effect immediately prior to the date on which such
change shall become  effective and the denominator of which shall be the Warrant
Price in effect  immediately  after giving effect to such change,  calculated in
accordance with clause (i)

                                      -3-
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above.  Such adjustments  shall be made  successively  whenever any event listed
above shall occur.

              (b)    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, reclassification, consolidation, merger, sale, transfer or other
disposition,   lawful  and  adequate   provision  shall  be  made  whereby  each
Warrantholder  shall  thereafter have the right to purchase and receive upon the
basis and upon the  terms and  conditions  herein  specified  and in lieu of the
Warrant Shares  immediately  theretofore  issuable upon exercise of the Warrant,
such  shares of stock,  securities  or assets  as would  have been  issuable  or
payable with  respect to or in exchange for a number of Warrant  Shares equal to
the number of Warrant Shares immediately  theretofore  issuable upon exercise of
the Warrant, 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
each  Warrantholder to the end that the provisions  hereof  (including,  without
limitation,  provision for adjustment of the Warrant Price) shall  thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock,  securities or assets thereafter deliverable upon the exercise hereof.
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  Warrantholder,  at the last  address of the
Warrantholder  appearing  on the  books of the  Company,  such  shares of stock,
securities  or assets  as, in  accordance  with the  foregoing  provisions,  the
Warrantholder may be entitled to purchase,  and the other obligations under this
Warrant.  The  provisions  of  this  paragraph  (b)  shall  similarly  apply  to
successive reorganizations,  reclassifications,  consolidations, mergers, sales,
transfers or other dispositions.

              (c)    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
8(a)),  or  subscription  rights or warrants,  the Warrant Price to be in effect
after such payment date shall be determined by multiplying  the Warrant 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

                                      -4-
<PAGE>

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 Warrantholder.  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 the Warrantholder prior to
the exercise hereunder as to the fair market value of a share of Common Stock as
determined by the Board of Directors of the Company. In the event that the Board
of Directors of the Company and the  Warrantholder  are unable to agree upon the
fair market value in respect of subpart (c) of this  paragraph,  the Company and
the Warrantholder 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  the
Warrantholder.  Such  adjustment  shall  be made  successively  whenever  such a
payment date is fixed.

              (d)    An adjustment  to the Warrant 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.

              (e)    In the  event  that,  as a  result  of an  adjustment  made
pursuant to this Section 8, the  Warrantholder  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  exercise of this  Warrant
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
Warrant Shares contained in this Warrant.

              (f)    Except  as  provided  in  subsection  (g)  hereof,  if  and
whenever  the Company  shall  issue or sell,  or is, in  accordance  with any of
subsections  (f)(l) through  (f)(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 Warrant 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 Warrant Price shall be reduced, as of the close of business on the
effective date of the Trigger  Issuance,  to the lowest price per share at which
any  share of Common  Stock  was  issued or sold or deemed to be issued or sold;
provided,  however, that in no event shall the Warrant Price after giving effect
to such Trigger  Issuance be greater  than the Warrant  Price in effect prior to
such Trigger Issuance.

                                      -5-
<PAGE>

              For purposes of this subsection (f),  "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  (f), other than Excluded  Issuances (as
defined in subsection (g) hereof).

              For purposes of this  subsection  (f), the  following  subsections
(f)(l) to (f)(7) shall also be applicable:

                     (f)(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  Warrant  Price 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 Warrant Price. Except as
              otherwise  provided in  subsection  8(f)(3),  no adjustment of the
              Warrant  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.

                     (f)(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

                                      -6-
<PAGE>

              (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 Warrant 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 Warrant Price, provided that (a) except as otherwise
              provided in subsection 8(f)(3), no adjustment of the Warrant 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 Warrant 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 Warrant  Price have been made  pursuant to the
              other provisions of subsection 8(f).

                     (f)(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 8(f)(l)
              hereof,  the additional  consideration,  if any,  payable upon the
              conversion or exchange of any Convertible  Securities  referred to
              in  subsections   8(f)(l)  or  8(f)(2),   or  the  rate  at  which
              Convertible  Securities  referred  to in  subsections  8(f)(l)  or
              8(f)(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 Warrant  Price in effect at the time of such event
              shall  forthwith be  readjusted  to the Warrant  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  subsection  8(f) or any  right  to  convert  or
              exchange Convertible  Securities for which any adjustment was made
              pursuant to this  subsection 8(f)  (including  without  limitation
              upon  the  redemption  or  purchase  for   consideration  of  such
              Convertible  Securities by the Company), the Warrant Price then in
              effect  hereunder  shall forthwith be changed to the Warrant 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.

                     (f)(4) Stock  Dividends.  Subject to the provisions of this
              Section  8(f), 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,

                                      -7-
<PAGE>

              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.

                     (f)(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  Warrantholder).  The Board of  Directors  of the  Company
              shall  respond  promptly,   in  writing,  to  an  inquiry  by  the
              Warrantholder  as to the  fair  market  value  of  the  Additional
              Rights.  In the event that the Board of  Directors  of the Company
              and the  Warrantholder  are unable to agree  upon the fair  market
              value of the Additional  Rights, the Company and the Warrantholder
              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 Warrantholder.

                     (f)(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  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.

                                      -8-
<PAGE>

                     (f)(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 subsection (f).

              (g)    Anything  herein  to  the  contrary  notwithstanding,   the
Company shall not be required to make any adjustment of the Warrant Price in the
case of the issuance of (A) capital  stock,  Options or  Convertible  Securities
issued to  directors,  officers,  employees  or  consultants  of the  Company in
connection with their service as directors of the Company,  their  employment by
the Company or their  retention  as  consultants  by the Company  pursuant to an
equity compensation program approved by the Board of Directors of the Company or
the compensation  committee of the Board of Directors of the Company, (B) shares
of Common Stock issued upon the conversion or exercise of Options or Convertible
Securities  issued prior to the date hereof,  provided such  securities  are not
amended  after 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 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 Warrant Price pursuant to the other
provisions of this Warrant) (collectively, "Excluded Issuances").

              (h)    Upon  any  adjustment  to the  Warrant  Price  pursuant  to
Section 8(f) above, the number of Warrant Shares purchasable  hereunder shall be
adjusted by multiplying such number by a fraction,  the numerator of which shall
be the Warrant  Price in effect  immediately  prior to such  adjustment  and the
denominator  of  which  shall  be  the  Warrant  Price  in  effect   immediately
thereafter.

              (i)    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 Warrant  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 Warrant Price is decreased
pursuant to the preceding  sentence,  the Company shall provide  written  notice
thereof  to the  Warrantholder  at least  five  (5)  days  prior to the date the
decreased Warrant Price takes effect,  and such notice shall state the decreased
Warrant Price and the period during which it will be in effect.

       Section 9.  FRACTIONAL  INTEREST.  The  Company  shall not be required to
issue  fractions  of Warrant  Shares upon the exercise of this  Warrant.  If any
fractional  share of Common Stock would,  except for the provisions of the first
sentence of this Section 9, be deliverable upon such exercise,  the Company,  in
lieu  of  delivering  such  fractional  share,   shall  pay  to  the  exercising
Warrantholder  an amount in cash  equal to the Market  Price of such  fractional
share of Common Stock on the date of exercise.

                                      -9-
<PAGE>

       Section 10.  EXTENSION OF EXPIRATION  DATE. If the Company fails to cause
any Registration  Statement  covering  Registrable  Securities (unless otherwise
defined  herein,  capitalized  terms are as defined in the  Registration  Rights
Agreement relating to the Warrant Shares (the "Registration  Rights Agreement"))
to be declared effective prior to the applicable dates set forth therein,  or if
any of the events  specified  in Section  2(c)(ii)  of the  Registration  Rights
Agreement occurs, and the Blackout Period (whether alone, or in combination with
any  other  Blackout  Period)  continues  for more  than 60 days in any 12 month
period,  or for more than a total of 90 days,  then the Expiration  Date of this
Warrant  shall be  extended  one day for each day  beyond  the  60-day or 90-day
limits, as the case may be, that the Blackout Period continues.

       Section 11. BENEFITS.  Nothing in this Warrant shall be construed to give
any person,  firm or corporation  (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall  be  for  the  sole  and   exclusive   benefit  of  the  Company  and  the
Warrantholder.

       Section 12.  NOTICES TO  WARRANTHOLDER.  Upon the  happening of any event
requiring an adjustment of the Warrant  Price,  the Company shall  promptly give
written  notice  thereof to the  Warrantholder  at the address  appearing in the
records of the  Company,  stating the  adjusted  Warrant  Price and the adjusted
number of  Warrant  Shares  resulting  from  such  event  and  setting  forth in
reasonable  detail  the  method of  calculation  and the facts  upon  which such
calculation is based.  Failure to give such notice to the  Warrantholder  or any
defect  therein  shall not  affect  the  legality  or  validity  of the  subject
adjustment.

       Section 13. IDENTITY OF TRANSFER AGENT. The Transfer Agent for the Common
Stock is  ___________________.  Upon the appointment of any subsequent  transfer
agent for the  Common  Stock or other  shares  of the  Company's  capital  stock
issuable upon the exercise of the rights of purchase represented by the Warrant,
the Company will mail to the  Warrantholder  a statement  setting forth the name
and address of such transfer agent.

       Section 14. NOTICES.  Unless otherwise  provided,  any notice required or
permitted  under  this  Warrant  shall be given in  writing  and shall be deemed
effectively  given as hereinafter  described (i) if given by personal  delivery,
then such  notice  shall be deemed  given upon such  delivery,  (ii) if given by
telex or  facsimile,  then such  notice  shall be deemed  given upon  receipt of
confirmation of complete  transmittal,  (iii) if given by mail, then such notice
shall be deemed  given  upon the  earlier of (A)  receipt of such  notice by the
recipient  or (B) three days after such notice is deposited in first class mail,
postage prepaid,  and (iv) if given by an internationally  recognized  overnight
air  courier,  then such notice  shall be deemed  given one  business  day after
delivery to such carrier.  All notices shall be addressed as follows:  if to the
Warrantholder,  at its address as set forth in the  Company's  books and records
and, if to the Company,  at the address as follows,  or at such other address as
the  Warrantholder  or the Company may  designate by ten days'  advance  written
notice to the other:

                                      -10-
<PAGE>

                      If to the Company:

                             UTIX Group, Inc.
                             7 New England Executive Park
                             Suite 610
                             Burlington, Massachusetts 01803-2933
                             Attention:
                             Fax:

                      With a copy to:

                             Hodgson Russ LLP
                             60 E. 42nd Street, 37th Floor
                             New York, NY 10165
                             Attn: Jeffrey A. Rinde, Esq.
                             Fax: (212) 972-1677

       Section 15. REGISTRATION RIGHTS. The initial Warrantholder is entitled to
the benefit of certain  registration rights with respect to the shares of Common
Stock issuable upon the exercise of this Warrant as provided in the Registration
Rights  Agreement,  and any  subsequent  Warrantholder  may be  entitled to such
rights.

       Section 16. SUCCESSORS. All the covenants and provisions hereof by or for
the  benefit of the  Warrantholder  shall  bind and inure to the  benefit of its
respective successors and assigns hereunder.

       Section 17. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
This  Warrant  shall be governed  by, and  construed  in  accordance  with,  the
internal laws of the State of New York,  without  reference to the choice of law
provisions   thereof.   The  Company  and,  by  accepting   this  Warrant,   the
Warrantholder,  each  irrevocably  submits to the exclusive  jurisdiction of the
courts of the State of New York located in New York County and the United States
District  Court for the  Southern  District  of New York for the  purpose of any
suit, action,  proceeding or judgment relating to or arising out of this Warrant
and the transactions  contemplated hereby. Service of process in connection with
any such suit,  action or proceeding may be served on each party hereto anywhere
in the world by the same  methods  as are  specified  for the  giving of notices
under  this  Warrant.   The  Company  and,  by  accepting   this  Warrant,   the
Warrantholder,  each irrevocably  consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of venue in such court.
The Company and, by accepting this Warrant, the Warrantholder,  each irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient  forum.  EACH OF THE COMPANY  AND, BY ITS  ACCEPTANCE  HEREOF,  THE
WARRANTHOLDER  HEREBY  WAIVES  ANY  RIGHT  TO  REQUEST  A  TRIAL  BY JURY IN ANY
LITIGATION  WITH  RESPECT TO THIS WARRANT

                                      -11-
<PAGE>

AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

       Section 18. CALL PROVISION.

              (a)    Subject to the provisions of clauses (b) and (c) below,  in
the event that the closing bid price of a share of Common Stock as traded on the
Over-the-Counter Bulletin Board (or such other exchange or stock market on which
the  Common  Stock  may then be  listed  or  quoted)  equals  or  exceeds  $0.12
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after the
date hereof) for at least twenty (20) consecutive  trading days during which the
Registration  Statement (as defined in the  Registration  Rights  Agreement) has
been effective  (the "Trading  Condition"),  the Company,  upon thirty (30) days
prior written notice (the "Notice Period") given to the Warrantholder within one
business  day  immediately  following  the end of such twenty  (20)  trading day
period,  may call this Warrant at a redemption price equal to $0.01 per share of
Common Stock then  purchasable  pursuant to this Warrant;  provided that (i) the
Company simultaneously calls all Company Warrants (as defined below) on the same
terms, (ii) all of the shares of Common Stock issuable  hereunder either (A) are
registered  pursuant to an effective  Registration  Statement (as defined in the
Registration  Rights  Agreement)  which has not been  suspended and for which no
stop order is in effect, and pursuant to which the Warrantholder is able to sell
such  shares of Common  Stock at all times  during the  Notice  Period or (B) no
longer constitute  Registrable Securities (as defined in the Registration Rights
Agreement)  and (iii) this Warrant is fully  exercisable  for the full amount of
Warrant Shares covered hereby.  Notwithstanding  any such notice by the Company,
the Warrantholder shall have the right to exercise this Warrant prior to the end
of the Notice Period.

              (b)    In any three-month  period,  no more than the lesser of (i)
20% of the aggregate  amount of Warrants  initially issued to a Warrantholder or
(ii) the  number of  Warrants  held by the  Warrantholder,  may be called by the
Company  and the  Company may not call  additional  Warrants  in any  subsequent
three-month  period  unless all the  conditions  specified in Section  18(a) are
again met (including without limitation, the Trading Condition) at the time that
any subsequent call notice is given.

              (c)    In  connection  with any  transfer or exchange of less than
all of this Warrant, the transferring Warrantholder shall deliver to the Company
an agreement or instrument  executed by the transferring  Warrantholder  and the
new Warrantholder  allocating  between them on whatever basis they may determine
in their sole  discretion  any  subsequent  call of this Warrant by the Company,
such that after giving  effect to such transfer the Company shall have the right
to call the same  number of Warrants  that it would have had if the  transfer or
exchange had not occurred.

       Section  19.  CASHLESS  EXERCISE.  Notwithstanding  any  other  provision
contained  herein to the contrary,  from and after the first  anniversary of the
Closing  Date and so long as the  Company  is  required  under the  Registration
Rights  Agreement to have effected the  registration  of the Warrant  Shares for
resale to the  public  pursuant  to a  Registration  Statement  (as such term

                                      -12-
<PAGE>

is defined in the Registration Rights Agreement),  if the Warrant Shares may not
be freely sold to the public for any reason (including,  but not limited to, the
failure of the Company to have effected the  registration  of the Warrant Shares
or to have a  current  prospectus  available  for  delivery  or  otherwise,  but
excluding the period of any Allowed Delay (as defined in the Registration Rights
Agreement),  the Warrantholder may elect to receive,  without the payment by the
Warrantholder of the aggregate  Warrant Price in respect of the shares of Common
Stock to be acquired, shares of Common Stock of equal value to the value of this
Warrant,  or any specified  portion hereof, by the surrender of this Warrant (or
such  portion of this  Warrant  being so  exercised)  together  with a Net Issue
Election Notice, in the form annexed hereto as Appendix B, duly executed, to the
Company.  Thereupon, the Company shall issue to the Warrantholder such number of
fully  paid,  validly  issued  and  nonassessable  shares of Common  Stock as is
computed using the following formula:

                                  X = Y (A - B)
                                      ---------
                                          A

where

                     X =   the  number of shares  of  Common  Stock to which the
Warrantholder is entitled upon such cashless exercise;

                     Y =   the total number of shares of Common Stock covered by
this Warrant for which the Warrantholder has surrendered purchase rights at such
time  for  cashless  exercise  (including  both  shares  to  be  issued  to  the
Warrantholder  and shares as to which the purchase  rights are to be canceled as
payment therefor);

                     A =   the "Market Price" of one share of Common Stock as at
the date the net issue election is made; and

                     B =   the Warrant Price in effect under this Warrant at the
time the net issue election is made.

                     Section 20. NO RIGHTS AS STOCKHOLDER. Prior to the exercise
              of this Warrant,  the Warrantholder shall not have or exercise any
              rights as a stockholder  of the Company by virtue of its ownership
              of this Warrant.

                     Section 21.  AMENDMENT;  WAIVER.  This  Warrant is one of a
              series of Warrants of like tenor issued by the Company pursuant to
              the  Purchase  Agreement  and  initially  covering an aggregate of
              68,312,500  shares of Common  Stock  (collectively,  the  "COMPANY
              WARRANTS").  Any term of this  Warrant  may be  amended  or waived
              (including the adjustment provisions included in Section 8 of this
              Warrant)  upon the written  consent of the Company and the holders
              of  Company  Warrants  representing  at least 50% of the number of
              shares of Common  Stock then  subject to all  outstanding  Company
              Warrants (the  "MAJORITY  HOLDERS");  PROVIDED,  that (x) any such
              amendment  or waiver must apply to all Company  Warrants;  and (y)
              the number of Warrant Shares subject to this Warrant,  the Warrant
              Price and the Expiration Date may not be amended,

                                      -13-
<PAGE>

and the right to  exercise  this  Warrant  may not be  altered  or waived in any
manner  adverse  to  the  Warrantholder,  without  the  written  consent  of the
Warrantholder.

       Section 22. SECTION  HEADINGS.  The section  headings in this Warrant are
for the  convenience of the Company and the  Warrantholder  and in no way alter,
modify, amend, limit or restrict the provisions hereof.

                                      -14-
<PAGE>

       IN  WITNESS  WHEREOF,  the  Company  has caused  this  Warrant to be duly
executed, as of the 13th day of January, 2006.

                                        UTIX GROUP, INC.

                                        By:___________________________
                                        Name:
                                        Title:

                                      -15-
<PAGE>

                                   APPENDIX A
                                UTIX GROUP, INC.
                              WARRANT EXERCISE FORM

To UTIX Group, Inc.:

       The  undersigned  hereby  irrevocably  elects  to  exercise  the right of
purchase  represented  by the within  Warrant  ("Warrant")  for, and to purchase
thereunder  by the payment of the Warrant  Price and  surrender  of the Warrant,
_______________  shares of Common Stock ("Warrant Shares") provided for therein,
and requests that certificates for the Warrant Shares be issued as follows:

                      -------------------------------------
                      Name

                      -------------------------------------
                      Address

                      -------------------------------------
                      Federal Tax ID or Social Security No.

       and delivered by (certified mail to the above address, or (electronically

(provide DWAC Instructions:_____________________________),  or (other (specify):

__________________________________________).

and,  if the  number  of  Warrant  Shares  shall not be all the  Warrant  Shares
purchasable upon exercise of the Warrant,  that a new Warrant for the balance of
the Warrant  Shares  purchasable  upon exercise of this Warrant be registered in
the name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.

Dated: ___________________, ____

Note: The signature must correspond with
      Signature:________________________
the name of the Warrantholder as written
on the first page of the Warrant in every         ------------------------------
particular, without alteration or enlargement     Name (please print)
or any change whatever, unless the Warrant
has been assigned.                                ------------------------------

                                                  ------------------------------
                                                  Address

                                                  ------------------------------
                                                  Federal Identification or
                                                  Social Security No.

                                                  Assignee:

                                                  ------------------------------

                                                  ------------------------------

                                                  ------------------------------

                                      -16-
<PAGE>

                                   APPENDIX B
                                UTIX GROUP, INC.
                            NET ISSUE ELECTION NOTICE

To: UTIX Group, Inc.

Date:[_________________________]

       The  undersigned  hereby  elects  under  SECTION  19 of this  Warrant  to
surrender the right to purchase  [____________]  shares of Common Stock pursuant
to this Warrant and hereby  requests the issuance of  [_____________]  shares of
Common Stock.  The  certificate(s)  for the shares  issuable upon such net issue
election  shall  be  issued  in the  name  of the  undersigned  or as  otherwise
indicated below.

-----------------------------------------
Signature

-----------------------------------------
Name for Registration

-----------------------------------------
Mailing Address

                                      -17-Exhibit 10.3

                          REGISTRATION RIGHTS AGREEMENT

       This Registration  Rights Agreement (the "Agreement") is made and entered
into as of this 13th day of  January,  2006 by and among  UTIX  Group,  Inc.,  a
Delaware corporation (the "Company"),  and the "Investors" named in that certain
Purchase Agreement, dated as of January 13, 2006 (the "Purchase Agreement"),  by
and among the Company and the Investors.  Capitalized terms used herein have the
respective  meanings ascribed thereto in the Purchase Agreement unless otherwise
defined herein.

       The parties hereby agree as follows:

       1.     CERTAIN DEFINITIONS.

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

       "COMMON  STOCK" shall mean the Company's  common stock,  par value $0.001
per  share,  and any  securities  into  which such  shares  may  hereinafter  be
reclassified.

       "INVESTORS" shall mean the Investors identified in the Purchase Agreement
and any  Affiliate or permitted  transferee  of any Investor who is a subsequent
holder of any Warrants or Registrable Securities.

       "PROSPECTUS"  shall mean (i) the prospectus  included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the  terms of the  offering  of any  portion  of the  Registrable  Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to the  prospectus,  including  post-effective  amendments  and all
material  incorporated  by  reference  in such  prospectus,  and (ii) any  "free
writing prospectus" as defined in Rule 163 under the 1933 Act..

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

       "REGISTRABLE  SECURITIES" shall mean (i) the Conversion Shares (including
any Option  Securities,  as defined herein),  (ii) the Warrant Shares (including
any Option Securities,  as defined herein) and (iii) any other securities issued
or issuable with respect to or in exchange for Registrable Securities; provided,
that, a security shall cease to be a Registrable Security upon (A) sale pursuant
to a Registration Statement or Rule 144 under the 1933 Act, or (B) such security
becoming eligible for sale by the Investors pursuant to Rule 144(k).

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

       "REQUIRED  INVESTORS"  means  the  Investors  holding a  majority  of the
Registrable Securities.

<PAGE>

       2.     REGISTRATION.

              (a)    REGISTRATION STATEMENTS.

              (i)    Promptly  following  the  Closing but no later than 45 days
after the Closing (the "Filing  Deadline"),  the Company  shall prepare and file
with the SEC one  Registration  Statement  on Form SB-2 (or, if Form SB-2 is not
then available to the Company, on such form of registration statement as is then
available to effect a  registration  for resale of the  Registrable  Securities,
subject  to  the  Required  Investors'  consent),  covering  the  resale  of the
Conversion  Shares and the Warrant Shares  issuable in respect of the Shares and
Warrants issued at the Closing.  Subject to any SEC comments,  such Registration
Statement shall include the plan of  distribution  attached hereto as EXHIBIT A.
Such Registration  Statement also shall cover, to the extent allowable under the
1933  Act and the  rules  promulgated  thereunder  (including  Rule  416),  such
indeterminate  number of additional  shares of Common Stock resulting from stock
splits,  stock dividends or similar transactions with respect to the Registrable
Securities.  Such Registration  Statement shall not include any shares of Common
Stock or other  securities for the account of any other holder without the prior
written consent of the Required Investors.  The Registration Statement (and each
amendment  or  supplement   thereto,   and  each  request  for  acceleration  of
effectiveness  thereof) shall be provided in accordance with Section 3(c) to the
Investors and Lowenstein Sandler PC prior to its filing or other submission.  If
a  Registration  Statement  covering the Initial  Registrable  Securities is not
filed with the SEC on or prior to the Filing Deadline, the Company will make pro
rata payments to each Investor,  as liquidated damages and not as a penalty,  in
an amount equal to 1.5% of the aggregate  amount invested by such Investor under
the  Purchase  Agreement  for each  30-day  period  or pro rata for any  portion
thereof  following the Filing  Deadline for which no  Registration  Statement is
filed with respect to the Registrable Securities. Such payments shall constitute
the Investors'  exclusive  monetary remedy for such events, but shall not affect
the right of the Investors to seek  injunctive  relief.  Such payments  shall be
made to each Investor in cash.

              (ii)   Promptly  following any Option Closing but no later than 45
days after an Option  Closing (an "Option Filing  Deadline"),  the Company shall
prepare and file with the SEC one Registration  Statement on Form SB-2, or amend
the  Registration  Statement  filed in connection  with the Closing,  if not yet
effective,  (or, if Form SB-2 is not then available to the Company, on such form
of  registration  statement as is then  available to effect a  registration  for
resale of the  Registrable  Securities),  covering  the  resale of the shares of
Common Stock  issuable upon  conversion of the Option Shares and the exercise of
the Option  Warrants  purchased  at the  related  Option  Closing  (the  "Option
Securities").  Subject to any SEC comments,  such  Registration  Statement shall
include the plan of  distribution  attached  hereto as EXHIBIT A, subject to any
SEC comments  thereon.  Such  Registration  Statement  also shall cover,  to the
extent  allowable  under  the  1933  Act and the  rules  promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Option Securities.  Such Registration Statement shall not include
any  shares of Common  Stock or other  securities  for the  account of any other
holder  without  the  prior  written  consent  of the  Required  Investors.  The
Registration  Statement  (and each  amendment or  supplement  thereto,  and each
request  for  acceleration  of  effectiveness  thereof)  shall  be  provided  in
accordance with Section 3(c) to the Investors and Lowenstein Sandler PC prior to
its filing or other submission.  If a Registration Statement covering the Option
Securities  is not filed with the SEC on or prior to the related  Option  Filing
Deadline,  the  Company  will  make  pro  rata  payments  to each  Investor,  as
liquidated damages and

                                      -2-
<PAGE>

not as a penalty, in an amount equal to 1.5% of the aggregate amount invested by
such  Investor  under the Purchase  Agreement for each 30-day period or pro rata
for any portion  thereof  following  such Option  Filing  Deadline  for which no
Registration  Statement  is filed with  respect to the Option  Securities.  Such
payments  shall be in  partial  compensation  to the  Investors,  and  shall not
constitute the Investors'  exclusive remedy for such events. Such payments shall
be made to each Investor in cash.

              (iii)  ADDITIONAL REGISTRABLE SECURITIES.  Upon the written demand
of any Investor and upon any change in the  Conversion  Price (as defined in the
Certificate  of  Designations)  or the Warrant Price (as defined in the Warrant)
such that additional  shares of Common Stock become issuable upon the conversion
of the Shares or the exercise of the  Warrants,  the Company  shall  prepare and
file with the SEC one or more Registration  Statements on Form SB-2 or amend the
Registration  Statement  filed  pursuant  to clause (i) or (ii)  above,  if such
Registration  Statement has not previously been declared  effective (or, if Form
SB-2  is not  then  available  to the  Company,  on such  form  of  registration
statement  as is then  available  to effect a  registration  for  resale of such
additional  shares of Common  Stock (the  "Additional  Shares"),  subject to the
Required  Investors'  consent) covering the resale of the Additional Shares, but
only to the  extent  the  Additional  Shares  are not at the time  covered by an
effective Registration Statement.  Such Registration Statement also shall cover,
to the extent allowable under the 1933 Act and the rules promulgated  thereunder
(including Rule 416), such  indeterminate  number of additional shares of Common
Stock resulting from stock splits,  stock dividends or similar transactions with
respect to the Additional Shares. Such Registration  Statement shall not include
any  shares of Common  Stock or other  securities  for the  account of any other
holder  without  the  prior  written  consent  of the  Required  Investors.  The
Registration  Statement  (and each  amendment or  supplement  thereto,  and each
request  for  acceleration  of  effectiveness  thereof)  shall  be  provided  in
accordance with Section 3(c) to the Investors and Lowenstein Sandler PC prior to
its  filing  or other  submission.  If a  Registration  Statement  covering  the
Additional  Shares is required to be filed under this Section  2(a)(iii)  and is
not filed with the SEC within ten  Business  Days of the request of any Investor
or upon the occurrence of any of the events specified in this Section 2(a)(iii),
the Company will make pro rata payments to each Investor,  as liquidated damages
and not as a  penalty,  in an  amount  equal  to 1.5%  of the  aggregate  amount
invested by such  Investor  for each  30-day  period or pro rata for any portion
thereof following the date by which such Registration Statement should have been
filed  for  which  no  Registration  Statement  is  filed  with  respect  to the
Additional  Shares.  Such payments shall  constitute  the  Investors'  exclusive
monetary remedy for such events, but shall not affect the right of the Investors
to seek injunctive relief. Such payments shall be made to each Investor in cash.

              (iv)   S-3   QUALIFICATION.   Promptly  following  the  date  (the
"Qualification  Date")  upon  which  the  Company  becomes  eligible  to  use  a
registration  statement  on Form  S-3 to  register  the  Registrable  Securities
(including any Option  Securities)  or Additional  Shares,  as  applicable,  for
resale,  but in no event more than thirty (30) days after the Qualification Date
(the "Qualification  Deadline"), the Company shall file a registration statement
on Form S-3  covering  the  Registrable  Securities  or  Additional  Shares,  as
applicable  (or a  post-effective  amendment  on  Form  S-3 to the  registration
statement  on Form  SB-2) (a  "Shelf  Registration  Statement")  and  shall  use
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared   effective  as  promptly  as  practicable   thereafter.   If  a  Shelf
Registration Statement

                                      -3-
<PAGE>

covering the Registrable Securities is not filed with the SEC on or prior to the
Qualification  Deadline,  the  Company  will  make  pro  rata  payments  to each
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate  purchase price paid by such Investor  pursuant to the Purchase
Agreement  attributable  to those  Registrable  Securities that remain unsold at
that time for each 30-day period or pro rata for any portion  thereof  following
the date by which such Shelf  Registration  Statement should have been filed for
which  no such  Shelf  Registration  Statement  is  filed  with  respect  to the
Registrable Securities or Additional Shares, as applicable.  Such payments shall
constitute the Investors'  exclusive  monetary remedy for such events, but shall
not affect the right of the Investors to seek injunctive  relief.  Such payments
shall be made to each Investor in cash.

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

              (c)    EFFECTIVENESS.

              (i)    The Company shall use  commercially  reasonable  efforts to
have the Registration  Statement declared effective as soon as practicable.  The
Company  shall  notify the  Investors  by  facsimile  or e-mail as  promptly  as
practicable,  and in  any  event,  within  twenty-four  (24)  hours,  after  any
Registration  Statement is declared effective and shall  simultaneously  provide
the  Investors  with copies of any related  Prospectus  to be used in connection
with the sale or other disposition of the securities covered thereby.  If (A)(w)
a Registration  Statement  covering the  Registrable  Securities is not declared
effective  by the SEC prior to the earlier of (i) five (5)  Business  Days after
the SEC shall  have  informed  the  Company  that no review of the  Registration
Statement  will  be  made  or  that  the  SEC  has no  further  comments  on the
Registration  Statement  or (ii) the 120th day after  the  Closing  Date,  (x) a
Registration  Statement covering any Option Securities is not declared effective
by the SEC prior to the  earlier  of (i) five (5)  Business  Days  after the SEC
shall have  informed  the Company that no review of the  Registration  Statement
will be  made or that  the  SEC  has no  further  comments  on the  Registration
Statement  or (ii) the  120th  day  after  the  related  Option  Closing,  (y) a
Registration  Statement covering  Additional Shares is not declared effective by
the SEC within  120 days  following  the time such  Registration  Statement  was
required to be filed pursuant to Section 2(a)(iii),  or (z) a Shelf Registration
Statement  is not  declared  effective  by the SEC  within  120 days  after  the
Qualification  Deadline or (B) after a Registration  Statement has been declared
effective  by the  SEC,  sales  cannot  be made  pursuant  to such  Registration
Statement  for any  reason  (including  without  limitation  by reason of a stop
order,  or the  Company's  failure to update the  Registration  Statement),  but
excluding  the  inability  of any  Investor to sell the  Registrable  Securities
covered thereby (1) due to market conditions, (2) to the extent excused pursuant
to subparagraph (ii) below or (3) in the case of a particular  Investor,  solely
to any action on the part of such Investor or such Investor's  affiliates,  then
the Company will make pro rata payments to each Investor,  as liquidated damages
and not as a  penalty,  in an  amount  equal  to 1.5%  of the  aggregate  amount
invested by such  Investor  for each  30-day  period or pro rata for any portion
thereof following the

                                      -4-
<PAGE>

date by which  such  Registration  Statement  should  have been  effective  (the
"Blackout  Period").  Such payments shall  constitute  the Investors'  exclusive
monetary remedy for such events, but shall not affect the right of the Investors
to seek injunctive relief. The amounts payable as liquidated damages pursuant to
this paragraph  shall be paid monthly within three (3) Business Days of the last
day of each month  following the  commencement  of the Blackout Period until the
termination of the Blackout Period. Such payments shall be made to each Investor
in cash.

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

              (c)    LIQUIDATED DAMAGES.  Notwithstanding the provisions of this
Section 2, in no event shall the Company be liable for liquidated damages in the
aggregate in excess of 1.5% of the aggregate amount invested by any Investor for
each 30-day period or pro rata for any portion thereof.

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

              (a)    use   commercially   reasonable   efforts   to  cause  such
Registration  Statement to become effective and to remain continuously effective
for a period that will  terminate  upon the earlier of (i) the date on which all
Registrable  Securities  covered by such Registration  Statement as amended from
time to time,  have  been  sold,  and (ii)  the  date on which  all  Registrable
Securities  covered by such Registration  Statement may be sold pursuant to Rule
144(k) (the "Effectiveness Period") and advise the Investors in writing when the
Effectiveness Period has expired;

              (b)    prepare  and  file  with  the  SEC  such   amendments   and
post-effective  amendments to the  Registration  Statement and the Prospectus as
may  be  necessary  to  keep  the  Registration   Statement  effective  for  the
Effectiveness  Period and to comply with the  provisions of the 1933 Act and the
1934 Act with respect to the  distribution of all of the Registrable  Securities
covered thereby;

              (c)    provide  copies  to and  permit  Lowenstein  Sandler  PC to
review each Registration Statement and all amendments and supplements thereto no
fewer than seven (7) days  prior to their  filing  with the SEC and not file any
document to which such counsel reasonably objects;

                                      -5-
<PAGE>

              (d)    furnish  to the  Investors  and  Lowenstein  Sandler PC (i)
promptly  after the same is prepared  and publicly  distributed,  filed with the
SEC, or received by the Company (but not later than two (2) Business  Days after
the filing date,  receipt date or sending date, as the case may be) one (1) copy
of any  Registration  Statement  and any  amendment  thereto,  each  preliminary
prospectus and Prospectus  and each  amendment or supplement  thereto,  and each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii)  such  number  of  copies  of a  Prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other  documents as each Investor may reasonably  request in order to facilitate
the  disposition of the Registrable  Securities  owned by such Investor that are
covered by the related Registration Statement;

              (e)    use  commercially  reasonable  efforts to (i)  prevent  the
issuance of any stop order or other  suspension  of  effectiveness  and, (ii) if
such order is issued,  obtain the  withdrawal  of any such order at the earliest
possible moment;

              (f)    prior to any public offering of Registrable Securities, use
commercially  reasonable  efforts to register or qualify or  cooperate  with the
Investors and their counsel in connection with the registration or qualification
of such  Registrable  Securities for offer and sale under the securities or blue
sky laws of such  jurisdictions  requested by the  Investors  and do any and all
other  commercially  reasonable acts or things  necessary or advisable to enable
the distribution in such jurisdictions of the Registrable  Securities covered by
the Registration  Statement;  provided,  however,  that the Company shall not be
required in connection  therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this  Section  3(f),  (ii)  subject  itself to general  taxation  in any
jurisdiction  where it would not  otherwise  be so subject but for this  Section
3(f),  or (iii)  file a  general  consent  to  service  of  process  in any such
jurisdiction;

              (g)    use   commercially   reasonable   efforts   to  cause   all
Registrable  Securities covered by a Registration Statement to be listed on each
securities  exchange,  interdealer  quotation  system  or other  market on which
similar securities issued by the Company are then listed;

              (h)    immediately  notify the Investors upon  discovery  that, or
upon the happening of any event as a result of which, the Prospectus includes an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements  therein not misleading
in light of the circumstances then existing, and promptly prepare, file with the
SEC  and  furnish  to  such  holder  a  supplement  to or an  amendment  of such
Prospectus  as may be  necessary  so that 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
light of the circumstances then existing; and

              (i)    otherwise  use  commercially  reasonable  efforts to comply
with all applicable  rules and regulations of the SEC under the 1933 Act and the
1934 Act, including,  without limitation,  Rule 172 under the 1933 Act, file any
final Prospectus,  including any

                                      -6-
<PAGE>

supplement  or  amendment  thereof,  with the SEC pursuant to Rule 424 under the
1933 Act,  promptly  inform the  Investors in writing if, at any time during the
Effectiveness  Period, the Company does not satisfy the conditions  specified in
Rule 172 and,  as a result  thereof,  the  Investors  are  required to deliver a
Prospectus in connection with any disposition of Registrable Securities and take
such other actions as may be reasonably necessary to facilitate the registration
of the  Registrable  Securities  hereunder;  and make  available to its security
holders, as soon as reasonably practicable,  but not later than the Availability
Date (as defined  below),  an earnings  statement  covering a period of at least
twelve (12) months,  beginning  after the  effective  date of each  Registration
Statement,  which  earnings  statement  shall satisfy the  provisions of Section
11(a) of the  1933  Act,  including  Rule 158  promulgated  thereunder  (for the
purpose  of this  subsection  3(i),  "Availability  Date"  means  the  45th  day
following the end of the fourth fiscal  quarter that includes the effective date
of such  Registration  Statement,  except that, if such fourth fiscal quarter is
the last quarter of the  Company's  fiscal year,  "Availability  Date" means the
90th day after the end of such fourth fiscal quarter).

              (j)    With a view  to  making  available  to  the  Investors  the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock
to the public  without  registration,  the Company  covenants and agrees to: (i)
make and keep public  information  available,  as those terms are understood and
defined in Rule 144,  until the earlier of (A) six months after such date as all
of the Registrable Securities may be resold pursuant to Rule 144(k) or any other
rule of  similar  effect or (B) such date as all of the  Registrable  Securities
shall have been  resold;  (ii) file with the SEC in a timely  manner all reports
and other  documents  required  of the  Company  under  the 1934 Act;  and (iii)
furnish  to each  Investor  upon  request,  as long as such  Investor  owns  any
Registrable  Securities,  (A) a written  statement  by the  Company  that it has
complied  with the  reporting  requirements  of the 1934 Act,  (B) a copy of the
Company's  most recent Annual Report on Form 10-KSB or Quarterly  Report on Form
10-QSB,  and (C) such other information as may be reasonably  requested in order
to avail such  Investor of any rule or  regulation  of the SEC that  permits the
selling of any such Registrable Securities without registration.

       4.     DUE  DILIGENCE  REVIEW;   INFORMATION.   The  Company  shall  make
available,  during  normal  business  hours,  for  inspection  and review by the
Investors,  advisors to and representatives of the Investors (who may or may not
be  affiliated  with the  Investors  and who are  reasonably  acceptable  to the
Company),  all financial and other  records,  all SEC Filings (as defined in the
Purchase  Agreement)  and other  filings with the SEC,  and all other  corporate
documents and  properties of the Company as may be reasonably  necessary for the
purpose  of such  review,  and  cause  the  Company's  officers,  directors  and
employees,  within a  reasonable  time  period,  to supply all such  information
reasonably  requested by the  Investors or any such  representative,  advisor or
underwriter in connection with such Registration  Statement (including,  without
limitation,  in response to all questions and other inquiries reasonably made or
submitted  by any of them),  prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors  and  such  representatives,   advisors  and  underwriters  and  their
respective  accountants  and  attorneys  to  conduct  initial  and  ongoing  due
diligence  with  respect to the  Company and the  accuracy of such  Registration
Statement.

                                      -7-
<PAGE>

              The Company shall not disclose material  nonpublic  information to
the Investors,  or to advisors to or  representatives  of the Investors,  unless
prior to disclosure of such information the Company  identifies such information
as being  material  nonpublic  information  and  provides  the  Investors,  such
advisors and representatives  with the opportunity to accept or refuse to accept
such  material  nonpublic  information  for review and any  Investor  wishing to
obtain such  information  enters into an appropriate  confidentiality  agreement
with the Company with respect thereto.

       5.     OBLIGATIONS OF THE INVESTORS.

              (a)    Each Investor  shall furnish in writing to the Company such
information  regarding  itself,  the  Registrable  Securities held by it and the
intended  method of disposition  of the  Registrable  Securities  held by it, as
shall be  reasonably  required to effect the  registration  of such  Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably  request. At least five (5) Business Days prior to
the first  anticipated  filing date of any Registration  Statement,  the Company
shall notify each  Investor of the  information  the Company  requires from such
Investor  if such  Investor  elects  to have any of the  Registrable  Securities
included  in  the  Registration   Statement.  An  Investor  shall  provide  such
information  to the  Company at least two (2)  Business  Days prior to the first
anticipated  filing date of such Registration  Statement if such Investor elects
to  have  any  of  the  Registrable  Securities  included  in  the  Registration
Statement.

              (b)    Each  Investor,   by  its  acceptance  of  the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with  the  preparation  and  filing  of a  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.

              (c)    Each Investor  agrees that, upon receipt of any notice from
the  Company of either (i) the  commencement  of an Allowed  Delay  pursuant  to
Section  2(c)(ii) or (ii) the  happening  of an event  pursuant to Section  3(h)
hereof,  such Investor will immediately  discontinue  disposition of Registrable
Securities  pursuant to the  Registration  Statement  covering such  Registrable
Securities,  until the Investor is advised by the Company that such dispositions
may again be made.

       6.     INDEMNIFICATION.

              (a)    INDEMNIFICATION BY THE COMPANY.  The Company will indemnify
and hold harmless each Investor and its officers,  directors, members, employees
and agents,  successors and assigns, and each other person, if any, who controls
such Investor  within the meaning of the 1933 Act,  against any losses,  claims,
damages or liabilities, joint or several, to which they may become subject under
the  1933  Act  or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities (or actions in respect  thereof) arise out of or are based upon: (i)
any untrue  statement or alleged untrue statement of any material fact contained
in any Registration  Statement,  any preliminary Prospectus or final Prospectus,
or any amendment or supplement  thereof;  (ii) any blue sky application or other
document  executed by the Company  specifically  for that  purpose or based upon
written  information  furnished  by the  Company  filed  in any  state  or other
jurisdiction in order to qualify any or all of the Registrable  Securities under
the

                                      -8-
<PAGE>

securities laws thereof (any such  application,  document or information  herein
called a "Blue Sky  Application");  (iii) the  omission  or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading;  (iv) any violation by the Company or its
agents of any rule or regulation  promulgated  under the 1933 Act  applicable to
the Company or its agents and  relating  to action or  inaction  required of the
Company in connection with such registration;  or (v) any failure to register or
qualify the  Registrable  Securities  included in any such  Registration  in any
state where the Company or its agents has affirmatively  undertaken or agreed in
writing that the Company will undertake such registration or qualification on an
Investor's  behalf and will  reimburse  such  Investor,  and each such  officer,
director  or member  and each  such  controlling  person  for any legal or other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending any such loss, claim, damage, liability or action; PROVIDED,  HOWEVER,
that the  Company  will not be liable in any such case if and to the extent that
any such  loss,  claim,  damage or  liability  arises out of or is based upon an
untrue  statement or alleged untrue statement or omission or alleged omission so
made in  conformity  with  information  furnished  by such  Investor or any such
controlling  person  in  writing  specifically  for  use  in  such  Registration
Statement or Prospectus.

              (b)    INDEMNIFICATION  BY THE  INVESTORS.  Each Investor  agrees,
severally but not jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees,  stockholders
and each person who  controls  the Company  (within the meaning of the 1933 Act)
against  any  losses,  claims,  damages,   liabilities  and  expense  (including
reasonable attorney fees) resulting from any untrue statement of a material fact
or any  omission of a material  fact  required to be stated in the  Registration
Statement or  Prospectus  or  preliminary  Prospectus or amendment or supplement
thereto or  necessary  to make the  statements  therein not  misleading,  to the
extent,  but only to the  extent  that such  untrue  statement  or  omission  is
contained  in any  information  furnished  in  writing by such  Investor  to the
Company specifically for inclusion in such Registration  Statement or Prospectus
or  amendment  or  supplement  thereto.  In no event shall the  liability  of an
Investor be greater in amount than the dollar amount of the proceeds (net of all
expense  paid by such  Investor in  connection  with any claim  relating to this
Section  6 and the  amount of any  damages  such  Investor  has  otherwise  been
required to pay by reason of such untrue statement or omission) received by such
Investor  upon  the  sale  of  the  Registrable   Securities   included  in  the
Registration Statement giving rise to such indemnification obligation.

              (c)    CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled
to  indemnification  hereunder shall (i) give prompt notice to the  indemnifying
party of any  claim  with  respect  to which it seeks  indemnification  and (ii)
permit such indemnifying  party to assume the defense of such claim with counsel
reasonably  satisfactory  to the  indemnified  party;  PROVIDED  that any person
entitled to  indemnification  hereunder  shall have the right to employ separate
counsel  and to  participate  in the  defense  of such  claim,  but the fees and
expenses of such counsel  shall be at the expense of such person  unless (a) the
indemnifying  party  has  agreed  to pay  such  fees  or  expenses,  or (b)  the
indemnifying  party  shall have  failed to assume the  defense of such claim and
employ counsel  reasonably  satisfactory to such person or (c) in the reasonable
judgment  of any such  person,  based  upon  written  advice of its  counsel,  a
conflict of interest exists between such person and the indemnifying  party with
respect to such claims (in which case, if the person  notifies the  indemnifying
party in  writing  that such  person  elects to employ  separate  counsel at the
expense of the indemnifying party, the indemnifying party shall

                                      -9-
<PAGE>

not have the  right to  assume  the  defense  of such  claim on  behalf  of such
person);  and PROVIDED,  FURTHER,  that the failure of any indemnified  party to
give notice as provided herein shall not relieve the  indemnifying  party of its
obligations  hereunder,  except to the extent  that such  failure to give notice
shall materially  adversely affect the indemnifying  party in the defense of any
such claim or litigation.  It is understood  that the  indemnifying  party shall
not, in connection with any proceeding in the same  jurisdiction,  be liable for
fees or expenses of more than one separate firm of attorneys at any time for all
such indemnified parties. No indemnifying party will, except with the consent of
the  indemnified  party,  consent  to entry of any  judgment  or enter  into any
settlement that does not include as an unconditional  term thereof the giving by
the  claimant  or  plaintiff  to such  indemnified  party of a release  from all
liability in respect of such claim or litigation.

              (d)    CONTRIBUTION.   If  for  any  reason  the   indemnification
provided  for in the  preceding  paragraphs  (a)  and (b) is  unavailable  to an
indemnified  party or insufficient to hold it harmless,  other than as expressly
specified  therein,  then the indemnifying  party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such  proportion as is appropriate to reflect the relative fault
of the  indemnified  party  and the  indemnifying  party,  as well as any  other
relevant   equitable   considerations.    No   person   guilty   of   fraudulent
misrepresentation  within the meaning of Section  11(f) of the 1933 Act shall be
entitled  to  contribution  from  any  person  not  guilty  of  such  fraudulent
misrepresentation.  In no event shall the contribution obligation of a holder of
Registrable  Securities  be  greater  in amount  than the  dollar  amount of the
proceeds (net of all expenses  paid by such holder in connection  with any claim
relating  to this  Section  6 and the  amount of any  damages  such  holder  has
otherwise  been  required  to pay by reason of such  untrue  or  alleged  untrue
statement or omission or alleged  omission)  received by it upon the sale of the
Registrable Securities giving rise to such contribution obligation.

       7.     MISCELLANEOUS.

              (a)    AMENDMENTS AND WAIVERS.  This Agreement may be amended only
by a writing signed by the Company and the Required  Investors.  The Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written  consent
to such amendment, action or omission to act, of the Required Investors.

              (b)    NOTICES. All notices and other communications  provided for
or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.

              (c)    ASSIGNMENTS  AND TRANSFERS BY INVESTORS.  The provisions of
this  Agreement  shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in  whole  or from  time to time in  part,  to one or more  persons  its  rights
hereunder in  connection  with the transfer of  Registrable  Securities  by such
Investor to such person,  provided  that such  Investor  complies  with all laws
applicable  thereto and provides  written  notice of  assignment  to the Company
promptly after such assignment is effected.

                                      -10-
<PAGE>

              (d)    ASSIGNMENTS  AND TRANSFERS BY THE COMPANY.  This  Agreement
may not be assigned by the Company  (whether by operation  of law or  otherwise)
without the prior written consent of the Required Investors,  provided, however,
that the Company may assign its rights and delegate its duties  hereunder to any
surviving or successor  corporation in connection with a merger or consolidation
of  the  Company  with  another  corporation,  or  a  sale,  transfer  or  other
disposition  of all or  substantially  all of the  Company's  assets to  another
corporation,  without the prior written consent of the Required Investors, after
notice duly given by the Company to each Investor.

              (e)    BENEFITS OF THE AGREEMENT. The terms and conditions of this
Agreement  shall  inure to the  benefit  of and be binding  upon the  respective
permitted  successors  and assigns of the  parties.  Nothing in this  Agreement,
express or implied,  is intended to confer upon any party other than the parties
hereto  or  their  respective  successors  and  assigns  any  rights,  remedies,
obligations,  or  liabilities  under or by reason of this  Agreement,  except as
expressly provided in this Agreement.

              (f)    COUNTERPARTS;  FAXES. This Agreement may be executed in two
or more  counterparts,  each of which  shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.  This Agreement may
also be executed via facsimile, which shall be deemed an original.

              (g)    TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

              (h)    SEVERABILITY.  Any  provision  of  this  Agreement  that is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any provision of law which  renders any  provisions  hereof  prohibited or
unenforceable in any respect.

              (i)    FURTHER  ASSURANCES.  The parties shall execute and deliver
all such further  instruments  and  documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.

              (j)    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 the agreement and understanding of the parties hereto in
respect of the subject matter contained  herein.  This Agreement  supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject matter.

              (k)    GOVERNING  LAW;  CONSENT  TO  JURISDICTION;  WAIVER OF JURY
TRIAL.  This Agreement  shall be governed by, and construed in accordance  with,
the internal  laws of the

                                      -11-
<PAGE>

State of New York without regard to the choice of law principles  thereof.  Each
of the parties hereto irrevocably  submits to the exclusive  jurisdiction of the
courts of the State of New York located in New York County and the United States
District  Court for the  Southern  District  of New York for the  purpose of any
suit,  action,  proceeding  or  judgment  relating  to or  arising  out of  this
Agreement  and the  transactions  contemplated  hereby.  Service  of  process in
connection with any such suit,  action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto  irrevocably  waives any
objection to the laying of venue of any such suit, action or proceeding  brought
in such courts and  irrevocably  waives any claim that any such suit,  action or
proceeding brought in any such court has been brought in an inconvenient  forum.
EACH OF THE  PARTIES  HERETO  WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION  WITH RESPECT TO THIS AGREEMENT AND REPRESENTS  THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

                                      -12-
<PAGE>

              IN WITNESS  WHEREOF,  the parties have executed this  Agreement or
caused their duly  authorized  officers to execute this Agreement as of the date
first above written.

The Company:                            UTIX GROUP, INC.

                                        By:_________________________
                                        Name:
                                        Title:

The Investors:

                                      -13-
<PAGE>

                                                                       EXHIBIT A

                              PLAN OF DISTRIBUTION

       The selling stockholders, which as used herein includes donees, pledgees,
transferees  or other  successors-in-interest  selling shares of common stock or
interests in shares of common stock received  after the date of this  prospectus
from a selling stockholder as a gift, pledge,  partnership distribution or other
transfer,  may, from time to time, sell, transfer or otherwise dispose of any or
all of their  shares of common  stock or  interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in  private  transactions.  These  dispositions  may  be  at  fixed  prices,  at
prevailing  market  prices  at the  time  of  sale,  at  prices  related  to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

       The selling stockholders may use any one or more of the following methods
when disposing of shares or interests therein:

       -  ordinary  brokerage   transactions  and  transactions  in  which   the
broker-dealer solicits purchasers;

       -  block  trades  in which the  broker-dealer  will  attempt  to sell the
shares as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;

       -  purchases  by  a   broker-dealer   as  principal  and  resale  by  the
broker-dealer for its account;

       -  an  exchange   distribution  in  accordance  with  the  rules  of  the
applicable exchange;

       -  privately negotiated transactions;

       -  short  sales  effected  after the date the  registration  statement of
which this Prospectus is a part is declared effective by the SEC;

       -  through  the  writing  or  settlement  of  options  or  other  hedging
transactions, whether through an options exchange or otherwise;

       -  broker-dealers  may  agree  with the  selling  stockholders  to sell a
specified number of such shares at a stipulated price per share; and

       - a combination of any such methods of sale.

       The  selling  stockholders  may,  from  time to time,  pledge  or grant a
security  interest  in some or all of the shares of common  stock  owned by them
and,  if they  default in the  performance  of their  secured  obligations,  the
pledgees or secured parties may offer and sell the shares of common stock,  from
time to time,  under this  prospectus,  or under an amendment to this prospectus
under  Rule  424(b)(3)  or other  applicable  provision  of the  Securities  Act
amending the list of selling stockholders to include the pledgee,  transferee or
other successors in interest as

<PAGE>

selling  stockholders under this prospectus.  The selling  stockholders also may
transfer  the shares of common stock in other  circumstances,  in which case the
transferees,  pledgees  or other  successors  in  interest  will be the  selling
beneficial owners for purposes of this prospectus.

       In connection with the sale of our common stock or interests therein, the
selling  stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The selling
stockholders  may also sell shares of our common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  selling
stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

       The aggregate  proceeds to the selling  stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions,  if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part,  any proposed  purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering. Upon
any  exercise of the warrants by payment of cash,  however,  we will receive the
exercise price of the warrants.

       The selling  stockholders  also may resell all or a portion of the shares
in open market  transactions  in reliance upon Rule 144 under the Securities Act
of 1933, provided that they meet the criteria and conform to the requirements of
that rule.

       The selling  stockholders and any underwriters,  broker-dealers or agents
that  participate  in the sale of the common stock or  interests  therein may be
"underwriters"  within the meaning of Section 2(11) of the  Securities  Act. Any
discounts,  commissions,  concessions  or profit  they earn on any resale of the
shares may be underwriting  discounts and commissions  under the Securities Act.
Selling stockholders who are "underwriters"  within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

       To the extent  required,  the shares of our common stock to be sold,  the
names of the selling  stockholders,  the respective  purchase  prices and public
offering prices, the names of any agents, dealer or underwriter,  any applicable
commissions or discounts with respect to a particular offer will be set forth in
an  accompanying  prospectus  supplement or, if  appropriate,  a  post-effective
amendment to the registration statement that includes this prospectus.

       In  order  to  comply  with  the  securities  laws  of  some  states,  if
applicable,  the common  stock may be sold in these  jurisdictions  only through
registered  or licensed  brokers or  dealers.  In  addition,  in some states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.

                                      -15-
<PAGE>

       We have advised the selling stockholders that the anti-manipulation rules
of  Regulation  M under  the  Exchange  Act may  apply to sales of shares in the
market and to the activities of the selling  stockholders and their  affiliates.
In addition, to the extent applicable we will make copies of this prospectus (as
it may be  supplemented  or amended from time to time)  available to the selling
stockholders for the purpose of satisfying the prospectus delivery  requirements
of the Securities Act. The selling  stockholders may indemnify any broker-dealer
that  participates  in  transactions  involving  the sale of the shares  against
certain liabilities, including liabilities arising under the Securities Act.

       We have agreed to indemnify the selling stockholders against liabilities,
including  liabilities  under  the  Securities  Act and state  securities  laws,
relating to the registration of the shares offered by this prospectus.

       We have  agreed with the selling  stockholders  to keep the  registration
statement  of which  this  prospectus  constitutes  a part  effective  until the
earlier of (1) such time as all of the shares  covered by this  prospectus  have
been disposed of pursuant to and in accordance with the  registration  statement
or (2) the date on which the shares may be sold  pursuant  to Rule 144(k) of the
Securities Act.

                                      -16-

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