Document:

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                                RIGHTS AGREEMENT

                                 by and between

                                 CANDIE'S, INC.

                                       and

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY,

                                 as Rights Agent

                          Dated as of January 26, 2000

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Section 1. Certain Definitions ............................................... 1

Section 2. Appointment of Rights Agent ....................................... 8

Section 3. Issue of Right Certificates ....................................... 8

Section 4. Form of Right Certificates ....................................... 12

Section 5. Countersignature and Registration ................................ 13

Section 6. Transfer, Split Up, Combination and Exchange
     of Right Certificates; Mutilated, Destroyed, Lost
     or Stolen Right Certificates ........................................... 14

Section 7. Exercise of Rights; Purchase Price;
     Expiration Date of Rights .............................................. 15

Section 8. Cancellation and Destruction of Right
     Certificates ........................................................... 19

Section 9. Availability of Preferred Shares ................................. 20

Section 10. Preferred Shares Record Date .................................... 21

Section 11. Adjustment of Purchase Price, Number of
     Shares or Number of Rights ............................................. 22

Section 12. Certificate of Adjusted Purchase Price or
     Number of Shares ....................................................... 37

                                       -i-
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Section 13. Consolidation, Merger or Sale or Transfer of
     Assets or Earning Power ................................................ 38

Section 14. Fractional Rights and Fractional Shares ......................... 43

Section 15. Rights of Action ................................................ 46

Section 16. Agreement of Right Holders ...................................... 47

Section 17. Right Certificate Holder Not Deemed a Stockholder ............... 48

Section 18. Concerning the Rights Agent ..................................... 48

Section 19. Merger or Consolidation or Change of
     Name of Rights Agent ................................................... 50

Section 20. Duties of Rights Agent .......................................... 51

Section 21. Change of Rights Agent .......................................... 55

Section 22. Issuance of New Right Certificates .............................. 57

Section 23. Redemption ...................................................... 57

Section 24. Exchange ........................................................ 59

Section 25. Notice of Certain Events ........................................ 62

Section 26. Notices ......................................................... 64

Section 27. Supplements and Amendments ...................................... 65

Section 28. Determinations, and Actions by the Board of
     Directors .............................................................. 66

                                      -ii-
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Section 29. Successors ...................................................... 67

Section 30. Benefits of this Agreement ...................................... 68

Section 31. Severability .................................................... 68

Section 32. Governing Law ................................................... 68

Section 33. Counterparts .................................................... 68

Section 34. Descriptive Headings ............................................ 69

Exhibit A -- Form of Certificate of Designations of Series A
               Junior Participating Preferred Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares

                                     -iii-
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     Agreement,  dated as of the  26th  day of  January,  2000,  by and  between
Candie's,  Inc., a Delaware  corporation (the "Company"),  and Continental Stock
Transfer & Trust Company,  a New York corporation,  as Rights Agent (the "Rights
Agent").

     The Board of  Directors  of the  Company  has  authorized  and  declared  a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter  defined) of the Company outstanding as of the close of business
on February 11, 2000, (the "Record Date"),  each Right representing the right to
purchase one one-thousandth of a Preferred Share (as hereinafter defined),  upon
the terms and  subject  to the  conditions  herein set  forth,  and has  further
authorized  and  directed the issuance of one Right,  subject to  adjustment  as
provided herein, with respect to each Common Share that shall become outstanding
between  the  Record  Date  and  the  earliest  of the  Distribution  Date,  the
Redemption  Date and the Final  Expiration  Date (as such terms are  hereinafter
defined).

     Accordingly,  in  consideration  of the premises and the mutual  agreements
herein set forth, the parties hereby agree as follows:

     Section  1.  Certain  Definitions.  For  purposes  of this  Agreement,  the
following terms have the meanings indicated:

     (a) "Acquiring Person" shall mean any Person (as such

<PAGE>

term is  hereinafter  defined) who or which,  together with all  Affiliates  and
Associates (as such terms are hereinafter  defined) of such Person, shall be the
Beneficial  Owner (as such term is  hereinafter  defined)  of 15% or more of the
Common  Shares of the  Company  then  outstanding,  but shall  not  include  the
Company,  any Subsidiary  (as such term is hereinafter  defined) of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company, or
any entity  holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding  the foregoing,  no Person shall become an "Acquiring Person" as
the  result of (A) a  Permitted  Transaction,  or (B) an  acquisition  of Common
Shares by the  Company  which,  by  reducing  the number of shares  outstanding,
increases the proportionate  number of shares  beneficially owned by such Person
to 15% or more of the Common Shares of the Company then  outstanding;  provided,
however,  that if a Person shall become the  Beneficial  Owner of 15% or more of
the Common Shares of the Company then  outstanding by reason of share  purchases
by the Company and shall, after such share purchases by the Company,  become the
Beneficial  Owner of any  additional  Common  Shares of the Company  (other than
pursuant to a Permitted Transaction),  then such Person shall be deemed to be an
"Acquiring Person".  Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise

                                      -2-
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be an "Acquiring  Person",  as defined  pursuant to the foregoing  provisions of
this  paragraph (a), has become such  inadvertently,  and such Person divests as
promptly  as  practicable  (and in all events  within five days  following  such
determination) a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing provisions
of this  paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.

     (b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such  terms in Rule  12b-2 of the  General  Rules and  Regulations  under the
Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), as in effect
on the date of this Agreement.

     (c) A Person shall be deemed the "Beneficial  Owner" of and shall be deemed
to "beneficially own" any securities:

          (i) which such Person or any of such Person's Affiliates or Associates
     beneficially owns, directly or indirectly;

          (ii)  which  such  Person  or  any  of  such  Person's  Affiliates  or
     Associates has (A) the right to acquire  (whether such right is exercisable
     immediately  or only after the passage of time)  pursuant to any agreement,
     arrangement

                                      -3-
<PAGE>

     or  understanding   (other  than  customary  agreements  with  and  between
     underwriters  and selling  group members with respect to a bona fide public
     offering  of  securities),  or upon  the  exercise  of  conversion  rights,
     exchange rights, rights (other than these Rights),  warrants or options, or
     otherwise;  provided,  however,  that a  Person  shall  not be  deemed  the
     Beneficial Owner of, or to beneficially own,  securities  tendered pursuant
     to a tender or exchange offer made by or on behalf of such Person or any of
     such Person's  Affiliates or Associates until such tendered  securities are
     accepted for purchase or exchange; or (B) the right to vote pursuant to any
     agreement,  arrangement or understanding;  provided, however, that a Person
     shall not be deemed the Beneficial  Owner of, or to  beneficially  own, any
     security  if the  agreement,  engagement  or  understanding  to  vote  such
     security (1) arises solely from a revocable  proxy or consent given to such
     Person in response to a public proxy or consent  solicitation made pursuant
     to,  and  in  accordance   with,  the  applicable   rules  and  regulations
     promulgated  under the Exchange Act and (2) is not also then  reportable on
     Schedule  13D  under  the  Exchange  Act (or any  comparable  or  successor
     report); or

                                      -4-
<PAGE>

          (iii) which are  beneficially  owned,  directly or indirectly,  by any
     other Person with which such Person or any of such  Person's  Affiliates or
     Associates has any  agreement,  arrangement  or  understanding  (other than
     customary  agreements  with and  between  underwriters  and  selling  group
     members with respect to a bona fide public  offering of securities) for the
     purpose of acquiring, holding, voting (except to the extent contemplated by
     the proviso to Section  l(c)(ii)(B))  or disposing of any securities of the
     Company.

     Notwithstanding  anything in this definition of Beneficial Ownership to the
contrary,  the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities  then  issued  and  outstanding  together  with  the  number  of such
securities not then actually issued and  outstanding  which such Person would be
deemed to own  beneficially  hereunder.

     (d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in New York are authorized or obligated by law
or executive order to close.

     (e) "Close of business"  on any given date shall mean 5:00 P.M.,  New York,
New York  time,  on such  date;  provided,  however,  that if such date is not a
Business  Day it shall mean 5:00  P.M.,  New York,  New York  time,  on the next
succeeding Business Day.

                                      -5-
<PAGE>

     (f) "Common  Shares" when used with reference to the Company shall mean the
shares of common  stock,  par value  $.001 per share,  of the  Company.  "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity  interest)  with the greatest  voting power of such
other  Person or, if such other Person is a Subsidiary  of another  Person,  the
Person or Persons which ultimately control such first-mentioned Person.

     (g)  "Distribution  Date"  shall  have the  meaning  set forth in Section 3
hereof.

     (h) "Final  Expiration  Date" shall have the meaning set forth in Section 7
hereof.

     (i)  "Interested  Stockholder"  shall  mean  any  Acquiring  Person  or any
Affiliate or  Associate of an Acquiring  Person or any other Person in which any
such  Acquiring  Person,  Affiliate or Associate  has an interest,  or any other
Person  acting  directly or  indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.

     (j) "Permitted  Transaction"  shall mean an action or transaction or series
of related actions or transactions, including, but not limited to, a purchase or
series of related purchases of Common Shares, which prior to the consummation

                                      -6-
<PAGE>

thereof,  and based upon its good faith  consideration  of all  factors  that it
deems to be relevant (including,  but not limited to, the long-term value of the
Company  and prices  that could  reasonably  be  expected  if the Company or its
assets were sold on an orderly basis  designed to realize  maximum  value),  the
Board of Directors of the Company  determines to be fair to and otherwise in the
best interests of the holders of the Common Shares.

     (k) "Person" shall mean any individual,  firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.

     (l) "Preferred  Shares" shall mean shares of Series A Junior  Participating
Preferred  Stock, par value $.01 per share, of the Company having the rights and
preferences  set  forth in the  Certificate  of  Designations  attached  to this
Agreement as Exhibit A.

     (m) "Redemption Date" shall have the meaning set forth in Section 7 hereof.

     (n) "Section 13 Event"  shall mean any event  described in clauses (x), (y)
or (z) of Section 13(a) hereof.

     (o)  "Shares  Acquisition  Date"  shall  mean  the  first  date  of  public
announcement by the Company or an Acquiring  Person that an Acquiring Person has
become such.

                                      -7-
<PAGE>

     (p)  "Subsidiary"  of any Person shall mean any corporation or other entity
of which a majority  of the  voting  power of the voting  equity  securities  or
equity interest is Beneficially Owned, directly or indirectly, by such Person.

     Section 2.  Appointment of Rights Agent.  The Company  hereby  appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof,  shall prior to the Distribution  Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof,  and the Rights Agent hereby accepts such  appointment.  The Company may
from time to time  appoint  such  co-Rights  Agents as it may deem  necessary or
desirable.

     Section 3. Issue of Right  Certificates.  (a) Until the  earlier of (i) the
tenth day after the Shares  Acquisition  Date or (ii) the tenth business day (or
such later date as may be determined  by action of the Board of Directors  prior
to such time as any Person  becomes an Acquiring  Person)  after the date of the
commencement  by any Person  (other  than the  Company,  any  Subsidiary  of the
Company,  any employee  benefit plan of the Company or of any  Subsidiary of the
Company or any entity  holding Common Shares for or pursuant to the terms of any
such  plan) of, or of the first  public  announcement  of the  intention  of any
Person  (other than the Company,  any  Subsidiary  of the Company,  any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity

                                      -8-
<PAGE>

holding  Common  Shares  for or  pursuant  to the  terms  of any  such  plan) to
commence,  a tender or exchange offer the  consummation of which would result in
any Person becoming an Acquiring Person  (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights,  the earlier
of such dates being  herein  referred to as the  "Distribution  Date"),  (x) the
Rights will be evidenced  (subject to the  provisions of Section 3(b) hereof) by
the  certificates  for  Common  Shares  registered  in the names of the  holders
thereof (which  certificates shall also be deemed to be Right  Certificates) and
not by  separate  Right  Certificates,  and  (y)  the  right  to  receive  Right
Certificates will be transferable only in connection with the transfer of Common
Shares.  As soon as practicable  after the  Distribution  Date, the Company will
prepare and  execute,  the Rights Agent will  countersign,  and the Company will
send or cause to be sent (and the Rights  Agent  will,  if  requested,  send) by
first-class,  insured,  postage-prepaid  mail,  to each record  holder of Common
Shares as of the close of business on the  Distribution  Date, at the address of
such  holder  shown on the  records  of the  Company,  a Right  Certificate,  in
substantially the form of Exhibit B hereto (a "Right  Certificate"),  evidencing
one Right for each Common Share so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.

                                      -9-
<PAGE>

     (a) On the Record Date, or as soon as practicable  thereafter,  the Company
will  send a copy of a  Summary  of  Rights to  Purchase  Preferred  Shares,  in
substantially  the form of  Exhibit  C hereto  (the  "Summary  of  Rights"),  by
first-class,  postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the  Company.  With  respect to  certificates  for Common  Shares
outstanding as of the Record Date, until the Distribution  Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together  with a copy of the  Summary  of  Rights  attached  thereto.  Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date),  the  surrender  for  transfer  of  any  certificate  for  Common  Shares
outstanding on the Record Date,  with or without a copy of the Summary of Rights
attached  thereto,  shall also constitute the transfer of the Rights  associated
with the Common Shares represented thereby.

     (b)  Certificates  for Common Shares which become  outstanding  (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this  paragraph  (c) ) after the Record  Date but prior to the  earliest  of the
Distribution  Date, the Redemption Date or the Final  Expiration Date shall have
impressed on, printed on, written on or otherwise

                                      -10-
<PAGE>

affixed to them the following legend, provided,  however, that in the event that
the name of the Company changes, the name of the Company may be inserted in such
legend in the place of "Candie's, Inc.":

     This  certificate  also evidences and entitles the holder hereof to certain
     rights  as set  forth in a Rights  Agreement  between  Candie's,  Inc.  and
     Continental  Stock Transfer & Trust Company,  as Rights Agent,  dated as of
     January 26, 2000 (as amended  from time to time,  the "Rights  Agreement"),
     the terms of which are hereby  incorporated  herein by reference and a copy
     of which is on file at the principal  executive  offices of Candie's,  Inc.
     Under certain  circumstances,  as set forth in the Rights  Agreement,  such
     Rights will be  evidenced  by separate  certificates  and will no longer be
     evidenced by this  certificate.  Candie's,  Inc. will mail to the holder of
     this  certificate  a copy of the  Rights  Agreement  without  charge  after
     receipt of a written request therefor. Under certain circumstances,  as set
     forth in the Rights  Agreement,  Rights issued to any Person who becomes an
     Acquiring  Person (as defined in the Rights  Agreement) may become null and
     void.

With respect to such  certificates  containing the foregoing  legend,  until the
Distribution  Date, the Rights associated with the Common Shares  represented by
such  certificates  shall  be  evidenced  by such  certificates  alone,  and the
surrender  for  transfer  of any such  certificate  shall  also  constitute  the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares

                                      -11-
<PAGE>

after the Record Date but prior to the Distribution  Date, any Rights associated
with such  Common  Shares  shall be deemed  cancelled  and  retired  so that the
Company shall not be entitled to exercise any Rights  associated with the Common
Shares which are no longer outstanding.

     Section  4. Form of Right  Certificates.  The Right  Certificates  (and the
forms of election to purchase  Preferred  Shares and of assignment to be printed
on the reverse thereof) shall be substantially  the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements  printed thereon as the Company may deem  appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any  applicable  law or with any rule or  regulation  made  pursuant
thereto  or with any rule or  regulation  of any  stock  exchange  on which  the
Rights, may from time to time be listed, or to conform to usage.  Subject to the
provisions  of Section 22  hereof,  the Right  Certificates  shall  entitle  the
holders  thereof to purchase such number of one  one-thousandths  of a Preferred
Share as shall be set forth  therein  at the price per one  one-thousandth  of a
Preferred Share set forth therein (the "Purchase Price"), but the number of such
one one-thousandths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.

                                      -12-
<PAGE>

     Section 5. Countersignature and Registration.  The Right Certificates shall
be  executed on behalf of the  Company by its  Chairman of the Board,  its Chief
Executive  Officer,  its  President,  or any of its Executive  Vice  Presidents,
either  manually  or by  facsimile  signature,  shall have  affixed  thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an  Assistant  Secretary  of  the  Company,  either  manually  or  by  facsimile
signature.  The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless  countersigned.  In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company  before  countersignature  by the Rights
Agent and  issuance  and  delivery  by the  Company,  such  Right  Certificates,
nevertheless,  may be countersigned by the Rights Agent and issued and delivered
by the  Company  with the same  force and effect as though the person who signed
such Right  Certificates  had not ceased to be such officer of the Company;  and
any Right  Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right  Certificate,  although at the date of
the execution of this Rights Agreement any such person was not such an officer.

                                      -13-
<PAGE>

     Following the Distribution  Date, the Rights Agent will keep or cause to be
kept, at its principal office,  books for registration and transfer of the Right
Certificates issued hereunder.  Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right  Certificates and the date of each of the Right
Certificates.

     Section  6.  Transfer,   Split  Up,   Combination  and  Exchange  of  Right
Certificates;  Mutilated, Destroyed, Lost or Stolen Right Certificates.  Subject
to the provisions of Section 14 hereof,  at any time after the close of business
on the  Distribution  Date,  and at or prior to the  close  of  business  on the
earlier  of the  Redemption  Date  or  the  Final  Expiration  Date,  any  Right
Certificate or Right Certificates  (other than Right  Certificates  representing
Rights that have become void  pursuant to Section  7(e) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred,  split up, combined
or exchanged for another Right Certificate or Right Certificates,  entitling the
registered holder to purchase a like number of one one-thousandth of a Preferred
Share as the Right Certificate or Right  Certificates  surrendered then entitled
such holder to purchase.  Any registered holder desiring to transfer,  split up,
combine or exchange any Right Certificate or Right  Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the

                                      -14-
<PAGE>

Right Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the  principal  office of the Rights  Agent.  Thereupon  the Rights
Agent  shall  countersign  and  deliver to the person  entitled  thereto a Right
Certificate  or Right  Certificates,  as the case may be, as so  requested.  The
Company may require payment of a sum sufficient to cover any tax or governmental
charge  that  may  be  imposed  in  connection  with  any  transfer,  split  up,
combination or exchange of Right Certificates.

     Upon  receipt by the  Company and the Rights  Agent of evidence  reasonably
satisfactory  to them of the loss,  theft,  destruction or mutilation of a Right
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security  reasonably  satisfactory  to  them,  and,  at the  Company's  request,
reimbursement  to the Company and the Rights  Agent of all  reasonable  expenses
incidental  thereto,  and upon surrender to the Rights Agent and cancellation of
the Right  Certificate  if  mutilated,  the Company  will make and deliver a new
Right  Certificate  of like  tenor  to the  Rights  Agent  for  delivery  to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.

     Section 7. Exercise of Rights;  Purchase Price;  Expiration Date of Rights.
(a) The  registered  holder of any Right  Certificate  may  exercise  the Rights
evidenced thereby (except as otherwise provided in Sections 7(e) and 24 hereof),
in whole or in

                                      -15-
<PAGE>

part at any time  after  the  Distribution  Date  upon  surrender  of the  Right
Certificate,  with the form of election to purchase on the reverse  side thereof
duly executed,  to the Rights Agent at the principal office of the Rights Agent,
together  with payment of the Purchase  Price for each one  one-thousandth  of a
Preferred  Share  as to  which  the  Rights  are  exercised,  at or prior to the
earliest of (i) the close of business on January 26, 2010 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof  (the  "Redemption  Date"),  or (iii) the time at which  such  Rights are
exchanged as provided in Section 24 hereof.

     (a) The Purchase  Price for each one  one-thousandth  of a Preferred  Share
purchasable  pursuant to the exercise of a Right shall  initially be $6.00,  and
shall be subject to adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful  money of the United  States of America in
accordance with paragraph (c) below.

     (b) Upon receipt of a Right Certificate  representing  exercisable  Rights,
with the form of election to purchase duly  executed,  accompanied by payment of
the  Purchase  Price for the shares to be  purchased  and an amount equal to any
applicable  transfer  tax  required  to be paid  by the  holder  of  such  Right
Certificate in accordance with Section 9 hereof by certified

                                      -16-
<PAGE>

check,  cashier's check or money order payable to the order of the Company,  the
Rights  Agent shall  thereupon  promptly (i) (A)  requisition  from any transfer
agent of the Preferred Shares certificates for the number of Preferred Shares to
be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests,  or (B)  requisition  from the  depositary  agent
depositary  receipts  representing  such  number  of  one  one-thousandths  of a
Preferred  Share as are to be  purchased  (in which  case  certificates  for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the  depositary  agent) and the Company hereby directs the depositary
agent to comply with such request,  (ii) when appropriate,  requisition from the
Company the amount of cash to be paid in lieu of issuance of  fractional  shares
in accordance with Section 14 hereof,  (iii) after receipt of such  certificates
or depositary  receipts,  cause the same to be delivered to or upon the order of
the  registered  holder of such Right  Certificate,  registered  in such name or
names as may be  designated  by such  holder  and (iv) when  appropriate,  after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate.

     (c) In case the registered  holder of any Right  Certificate shall exercise
less than all the Rights evidenced thereby,  a new Right Certificate  evidencing
Rights equivalent to

                                      -17-
<PAGE>

the Rights  remaining  unexercised  shall be issued by the  Rights  Agent to the
registered holder of such Right  Certificate or to his duly authorized  assigns,
subject to the provisions of Section 14 hereof.

     (d) Anything in this Agreement  contained to the contrary  notwithstanding,
from and after the time that a Person  first  becomes an Acquiring  Person,  any
Rights  beneficially  owned  by (i) the  Acquiring  Person  or an  Affiliate  or
Associate of the Acquiring Person, (ii) a transferee of the Acquiring Person (or
of any  Affiliate  or  Associate  thereof)  who becomes a  transferee  after the
Acquiring Person becomes such, or (iii) a transferee of the Acquiring Person (or
of any  Affiliate  or Associate  thereof)  who becomes a transferee  prior to or
concurrently  with the Acquiring  Person  becoming such and receives such Rights
pursuant to either (A) a transfer  (whether or not for  consideration)  from the
Acquiring  Person to holders of equity  interests in such Acquiring Person or to
any  Person  with  whom  the  Acquiring  Person  has  a  continuing   agreement,
arrangement or understanding  regarding the transferred Rights or (B) a transfer
which the Board of  Directors of the Company has  determined  is part of a plan,
arrangement  or  understanding  which has as a  primary  purpose  or effect  the
avoidance of this Section  7(e),  shall become null and void without any further
action and no holder of such Rights shall have any

                                      -18-
<PAGE>

rights  whatsoever  with respect to such Rights,  whether under any provision of
this  Agreement or otherwise.  The Company shall use all  reasonable  efforts to
insure that the  provisions  of this Section 7(e) are complied  with,  but shall
have no  liability  to any  holder of Right  Certificates  or other  Person as a
result of its failure to make any  determinations  with  respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.

     (e) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company  shall be  obligated  to undertake  any action with
respect to a registered holder upon the occurrence of any purported  exercise as
set forth in this Section 7 unless such  registered  holder shall have  provided
such  additional  evidence of the  identity of the  Beneficial  Owner (or former
Beneficial  owner) or  Affiliates  or  Associates  thereof as the Company  shall
reasonably request.

     Section 8.  Cancellation and Destruction of Right  Certificates.  All Right
Certificates  surrendered  for the  purpose  of  exercise,  transfer,  split up,
combination  or exchange  shall,  if surrendered to the Company or to any of its
agents,  be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered  to the Rights Agent,  shall be cancelled by it, and no Right
Certificates  shall be issued in lieu thereof  except as expressly  permitted by
any of the provisions of this Rights

                                      -19-
<PAGE>

Agreement.  The Company shall deliver to the Rights Agent for  cancellation  and
retirement,  and the Rights  Agent shall so cancel and  retire,  any other Right
Certificate  purchased  or  acquired  by the  Company  otherwise  than  upon the
exercise   thereof.   The  Rights  Agent  shall  deliver  all  cancelled   Right
Certificates  to the Company,  or shall,  at the written request of the Company,
destroy such  cancelled  Right  Certificates,  and in such case shall  deliver a
certificate of destruction thereof to the Company.

     Section 9.  Availability  of Preferred  Shares.  The Company  covenants and
agrees  that  it  will  cause  to be  reserved  and  kept  available  out of its
authorized  and unissued  Preferred  Shares or any Preferred  Shares held in its
treasury,  the number of Preferred  Shares that will be sufficient to permit the
exercise in full of all  outstanding  Rights in  accordance  with Section 7. The
Company  covenants  and  agrees  that it will  take  all such  action  as may be
necessary to ensure that all Preferred  Shares delivered upon exercise of Rights
shall,  at the time of delivery of the  certificates  for such Preferred  Shares
(subject to payment of the Purchase Price),  be duly and validly  authorized and
issued and fully paid and nonassessable shares.

     The  Company  further  covenants  and agrees  that it will pay when due and
payable any and all federal and state  transfer  taxes and charges  which may be
payable in respect of the issuance

                                      -20-
<PAGE>

or  delivery  of the Right  Certificates  or of any  Preferred  Shares  upon the
exercise  of Rights.  The  Company  shall not,  however,  be required to pay any
transfer  tax which may be payable in respect of any  transfer  or  delivery  of
Right  Certificates  to a person  other  than,  or the  issuance  or delivery of
certificates  or depositary  receipts for the  Preferred  Shares in a name other
than that of, the registered holder of the Right  Certificate  evidencing Rights
surrendered  for  exercise  or  to  issue  or to  deliver  any  certificates  or
depositary  receipts for Preferred  Shares upon the exercise of any Rights until
any such tax shall  have been paid (any such tax being  payable by the holder of
such  Right  Certificate  at the  time  of  surrender)  or  until  it  has  been
established to the Company's reasonable satisfaction that no such tax is due.

     Section 10.  Preferred  Shares  Record Date.  Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all  purposes  be deemed to have  become the  holder of record of the  Preferred
Shares  represented  thereby on, and such  certificate  shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the  Purchase  Price (and any  applicable  transfer  taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have  become  the record  holder of such  shares on, and such
certificate  shall be  dated,  the next  succeeding  Business  Day on which  the
Preferred

                                      -21-
<PAGE>

Shares  transfer  books of the  Company are open.  Prior to the  exercise of the
Rights  evidenced  thereby,  the  holder  of a Right  Certificate  shall  not be
entitled  to any  rights of a holder of  Preferred  Shares  for which the Rights
shall be  exercisable,  including,  without  limitation,  the right to vote,  to
receive dividends or other  distributions or to exercise any preemptive  rights,
and shall not be  entitled  to  receive  any  notice of any  proceedings  of the
Company, except as provided herein.

     Section 11.  Adjustment  of Purchase  Price,  Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.

          (i) In the event the Company  shall at any time after the date of this
     Agreement  (A)  declare a  dividend  on the  Preferred  Shares  payable  in
     Preferred  Shares,  (B) subdivide the  outstanding  Preferred  Shares,  (C)
     combine the outstanding Preferred Shares into a smaller number of Preferred
     Shares or (D) issue any shares of its capital  stock in a  reclassification
     of the Preferred Shares (including any

                                      -22-
<PAGE>

     such reclassification in connection with a consolidation or merger in which
     the  Company  is  the  continuing  or  surviving  corporation),  except  as
     otherwise  provided in this Section 11 (a), the Purchase Price in effect at
     the time of the record date for such dividend or of the  effective  date of
     such subdivision, combination or reclassification,  and the number and kind
     of shares of capital stock issuable on such date, shall be  proportionately
     adjusted so that the holder of any Right exercised after such time shall be
     entitled  to  receive  the  aggregate  number and kind of shares of capital
     stock which,  if such Right had been  exercised  immediately  prior to such
     date and at a time when the Preferred  Shares transfer books of the Company
     were open,  he would have owned upon such  exercise  and been  entitled  to
     receive  by  virtue  of  such   dividend,   subdivision,   combination   or
     reclassification;   provided,   however,   that  in  no  event   shall  the
     consideration  to be paid upon the  exercise  of one Right be less than the
     aggregate par value of the shares of capital stock of the Company  issuable
     upon exercise of one Right.

          (ii) Subject to Sections 7(e) and 24 of this  Agreement,  in the event
     any Person  becomes  an  Acquiring  Person,  each  holder of a Right  shall
     thereafter have a right to receive,  upon exercise thereof at a price equal
     to the

                                      -23-
<PAGE>

     then current Purchase Price multiplied by the number of one one-thousandths
     of a Preferred Share for which a Right is then  exercisable,  in accordance
     with the terms of this  Agreement  and in lieu of  Preferred  Shares,  such
     number of Common  Shares of the Company as shall equal the result  obtained
     by (x)  multiplying  the then current  Purchase  Price by the number of one
     one-thousandths  of a Preferred Share for which a Right is then exercisable
     and  dividing  that product by (y) 50% of the then current per share market
     price of the Company's Common Shares (determined pursuant to Section 11 (d)
     hereof) on the date of the  occurrence  of such event;  provided,  however,
     that if the  transaction  that would  otherwise  give rise to the foregoing
     adjustment  is also subject to the  provisions  of Section 13 hereof,  then
     only the  provisions  of Section 13 hereof  shall  apply and no  adjustment
     shall be made pursuant to this Section 11(a)(ii).

          (iii) In the event that there shall not be  sufficient  Common  Shares
     issued  but not  outstanding  or  authorized  but  unissued  to permit  the
     exercise  in  full  of  the  Rights  in   accordance   with  the  foregoing
     subparagraph  (ii),  the  Company  shall  take  all such  action  as may be
     necessary to authorize  additional Common Shares for issuance upon exercise
     of the Rights. In the event the Company shall, after good

                                      -24-
<PAGE>

     faith  effort,  be unable to take all such  action as may be  necessary  to
     authorize such additional Common Shares, the Company shall substitute,  for
     each  Common  Share that would  otherwise  be issuable  upon  exercise of a
     Right,  a number of  Preferred  Shares or  fraction  thereof  such that the
     current  per share  market  price of one  Preferred  Share (as  defined  in
     Section  11(d))  multiplied  by such  number  or  fraction  is equal to the
     current  per  share  market  price  of one  Common  Share as of the date of
     issuance of such Preferred Shares or fraction thereof.

     (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of  Preferred  Shares  entitling  them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase  Preferred Shares (or shares having the same rights,  privileges and
preferences  as  the  Preferred  Shares  ("equivalent   preferred  shares"))  or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent  preferred share (or having a conversion
price per share, if a security  convertible  into Preferred Shares or equivalent
preferred  shares)  less than the then  current  per share  market  price of the
Preferred  Shares  (as  defined  in Section  11 (d)) on such  record  date,  the
Purchase Price to be in effect after

                                      -25-
<PAGE>

such record date shall be determined by multiplying the Purchase Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of  Preferred  Shares  which the  aggregate  offering  price of the total
number of Preferred Shares and/or  equivalent  preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible  securities so
to be offered) would  purchase at such current market price and the  denominator
of which shall be the number of Preferred Shares outstanding on such record date
plus the number of  additional  Preferred  Shares  and/or  equivalent  preferred
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible);  provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the  aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be paid
in a consideration  part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company,  whose determination shall be described in a statement
filed with the Rights Agent.  Preferred  Shares owned by or held for the account
of the Company shall not be deemed

                                      -26-
<PAGE>

outstanding for the purpose of any such  computation.  Such adjustment  shall be
made  successively  whenever such a record date is fixed;  and in the event that
such rights,  options or warrants are not so issued, the Purchase Price shall be
adjusted to be the  Purchase  Price which would then be in effect if such record
date had not been fixed.

     (c) In case the  Company  shall  fix a  record  date  for the  making  of a
distribution  to all  holders  of  the  Preferred  Shares  (including  any  such
distribution  made in  connection  with a  consolidation  or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription  rights or warrants  (excluding those referred
to in Section 11 (b)  hereof),  the  Purchase  Price to be in effect  after such
record date shall be  determined  by  multiplying  the Purchase  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the then current per share market price of the Preferred Shares on such
record  date,  less the fair market  value (as  determined  in good faith by the
Board of Directors of the Company,  whose  determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights

                                      -27-
<PAGE>

or warrants applicable to one Preferred Share and the denominator of which shall
be such  current  per share  market  price of the  Preferred  Shares;  provided,
however,  that in no event shall the  consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right.  Such adjustments  shall
be made successively whenever such a record date is fixed; and in the event that
such  distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase  Price which would then be in effect if such record date had not
been fixed.

          (i) For the purpose of any  computation  hereunder,  the  "current per
     share market price" of any security (a  "Security"  for the purpose of this
     Section 11 (d) (i) ) on any date  shall be deemed to be the  average of the
     daily  closing  prices per share of such  Security  for the 30  consecutive
     Trading Days (as such term is  hereinafter  defined)  immediately  prior to
     such date; provided,  however, that in the event that the current per share
     market price of the Security is  determined  during a period  following the
     announcement  by  the  issuer  of  such  Security  of  (A)  a  dividend  or
     distribution  on such  Security  payable  in  shares  of such  Security  or
     securities convertible into such shares, or

                                      -28-
<PAGE>

     (B) any subdivision,  combination or  reclassification of such Security and
     prior to the expiration of 30 Trading Days after the  ex-dividend  date for
     such  dividend or  distribution,  or the record date for such  subdivision,
     combination or  reclassification,  then, and in each such case, the current
     per share  market  price  shall be  appropriately  adjusted  to reflect the
     current  market price per share  equivalent of such  Security.  The closing
     price for each day shall be the last sale price,  regular  way, or, in case
     no such sale takes  place on such day,  the  average of the closing bid and
     asked  prices,  regular  way, in either  case as reported in the  principal
     consolidated transaction reporting system with respect to securities listed
     or admitted to trading on the New York Stock  Exchange  or, if the Security
     is not listed or  admitted  to trading on the New York Stock  Exchange,  as
     reported in the principal  consolidated  transaction  reporting system with
     respect to securities listed on the principal national  securities exchange
     on which the  Security is listed or admitted to trading or, if the Security
     is not listed or admitted to trading on any national  securities  exchange,
     the last quoted price or, if not so quoted, the average of the high bid and
     low  asked  prices  in the  over-the-counter  market,  as  reported  by the
     National Association of Securities

                                      -29-
<PAGE>

     Dealers,  Inc. Automated  Quotations System ("NASDAQ") or such other system
     then in use, or, if on any such date the Security is not quoted by any such
     organization,  the average of the closing bid and asked prices as furnished
     by a professional  market maker making a market in the Security selected by
     the Board of Directors of the Company.  The term "Trading Day" shall mean a
     day on which  the  principal  national  securities  exchange  on which  the
     Security is listed or admitted  to trading is open for the  transaction  of
     business  or, if the  Security  is not listed or admitted to trading on any
     national securities exchange, a Business Day.

          (ii) For the purpose of any  computation  hereunder,  the "current per
     share  market  price"  of the  Preferred  Shares  shall  be  determined  in
     accordance with the method set forth in Section 11 (d)(i). If the Preferred
     Shares are not publicly traded, the "current per share market price" of the
     Preferred  Shares shall be conclusively  deemed to be the current per share
     market price of the Common Shares as determined  pursuant to Section 11 (d)
     (i)  (appropriately  adjusted to reflect any stock split, stock dividend or
     similar  transaction  occurring  after the date hereof),  multiplied by one
     thousand.  If  neither  the  Common  Shares  nor the  Preferred  Shares are
     publicly held or so listed or

                                      -30-
<PAGE>

     traded,  "current  per share  market  price"  shall mean the fair value per
     share as determined in good faith by the Board of Directors of the Company,
     whose determination shall be described in a statement filed with the Rights
     Agent.

     (d) No  adjustment  in the  Purchase  Price shall be  required  unless such
adjustment  would require an increase or decrease of at least 1% in the Purchase
Price;  provided,  however, that any adjustments which by reason of this Section
11(e) are not  required  to be made  shall be  carried  forward  and taken  into
account in any subsequent  adjustment.  All  calculations  under this Section 11
shall be made to the  nearest  cent or to the  nearest  one  one-millionth  of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the  transaction  which requires such  adjustment or (ii)
the date of the expiration of the right to exercise any Rights.

     (e) If as a result of an adjustment  made pursuant to Section 11(a) hereof,
the holder of any Right  thereafter  exercised  shall become entitled to receive
any  shares  of  capital  stock of the  Company  other  than  Preferred  Shares,
thereafter  the number of such other shares so  receivable  upon exercise of any
Right shall

                                      -31-
<PAGE>

be  subject to  adjustment  from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Shares
contained  in Section  11(a)  through  (c),  inclusive,  and the  provisions  of
Sections 7, 9, 10 and 13 with  respect to the  Preferred  Shares  shall apply on
like terms to any such other shares.

     (f)  All  Rights  originally  issued  by  the  Company  subsequent  to  any
adjustment  made to the Purchase  Price  hereunder  shall  evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred  Share  purchasable  from time to time  hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

     (g) Unless the Company  shall have  exercised  its  election as provided in
Section  11(i),  upon each  adjustment of the Purchase  Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding  immediately
prior to the making of such adjustment  shall  thereafter  evidence the right to
purchase,  at the adjusted Purchase Price, that number of one one-thousandths of
a Preferred Share  (calculated to the nearest one  one-millionth  of a Preferred
Share) obtained by (i) multiplying  (x) the number of one  one-thousandths  of a
share  covered  by a  Right  immediately  prior  to this  adjustment  by (y) the
Purchase Price in effect immediately prior to such adjustment of

                                      -32-
<PAGE>

the  Purchase  Price and (ii)  dividing  the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.

     (h) The  Company  may elect on or after the date of any  adjustment  of the
Purchase  Price  to  adjust  the  number  of  Rights,  in  substitution  for any
adjustment in the number of one one-thousandths of a Preferred Share purchasable
upon  the  exercise  of a  Right.  Each of the  Rights  outstanding  after  such
adjustment  of the number of Rights shall be  exercisable  for the number of one
one-thousandths  of  a  Preferred  Share  for  which  a  Right  was  exercisable
immediately  prior to such  adjustment.  Each Right held of record prior to such
adjustment  of  the  number  of  Rights  shall  become  that  number  of  Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect  immediately  prior to adjustment  of the Purchase  Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights,  indicating  the record  date for the  adjustment,  and, if known at the
time, the amount of the adjustment to be made.  This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued,  shall be at least 10 days later than the date of
the public announcement. If Right

                                      -33-
<PAGE>

Certificates  have been  issued,  upon each  adjustment  of the number of Rights
pursuant to this Section 11(i),  the Company shall,  as promptly as practicable,
cause to be  distributed  to  holders  of record of Right  Certificates  on such
record date Right  Certificates  evidencing,  subject to Section 14 hereof,  the
additional  Rights to which such  holders  shall be entitled as a result of such
adjustment,  or, at the option of the Company,  shall cause to be distributed to
such  holders  of  record  in   substitution   and  replacement  for  the  Right
Certificates  held by such  holders  prior to the date of  adjustment,  and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders  shall be entitled  after such  adjustment.
Right  Certificates  so  to  be  distributed  shall  be  issued,   executed  and
countersigned  in the manner  provided for herein and shall be registered in the
names  of the  holders  of  record  of Right  Certificates  on the  record  date
specified in the public announcement.

     (i)  Irrespective  of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a Preferred Share issuable upon the exercise of
the  Rights,  the Right  Certificates  theretofore  and  thereafter  issued  may
continue to express the Purchase Price and the number of one  one-thousandths of
a Preferred Share which were expressed in the initial Right Certificates  issued
hereunder.

                                      -34-
<PAGE>

     (j) Before  taking any action that would cause an  adjustment  reducing the
Purchase Price below one  one-thousandth  of the then par value,  if any, of the
Preferred  Shares  issuable upon exercise of the Rights,  the Company shall take
any corporate  action which may, in the opinion of its counsel,  be necessary in
order  that  the  Company   may  validly  and  legally   issue  fully  paid  and
nonassessable Preferred Shares at such adjusted Purchase Price.

     (k) In any case in which this Section 11 shall  require that an  adjustment
in the  Purchase  Price be made  effective  as of a record  date for a specified
event,  the Company may elect to defer  until the  occurrence  of such event the
issuing  to the holder of any Right  exercised  after  such  record  date of the
Preferred  Shares and other capital stock or securities of the Company,  if any,
issuable  upon  such  exercise  over and above the  Preferred  Shares  and other
capital stock or securities of the Company,  if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however,  that the  Company  shall  deliver  to such  holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

                                      -35-
<PAGE>

     (l)  Anything  in this  Section  11 to the  contrary  notwithstanding,  the
Company  shall be entitled to make such  reductions  in the Purchase  Price,  in
addition to those adjustments  expressly  required by this Section 11, as and to
the extent that it in its sole  discretion  shall  determine  to be advisable in
order that any  consolidation or subdivision of the Preferred  Shares,  issuance
wholly for cash of any Preferred  Shares at less than the current  market price,
issuance wholly for cash of Preferred  Shares or securities which by their terms
are  convertible  into  or  exchangeable  for  Preferred  Shares,  dividends  on
Preferred Shares payable in Preferred  Shares or issuance of rights,  options or
warrants  referred  to  hereinabove  in  Section 11 (b),  hereafter  made by the
Company  to  holders  of its  Preferred  Shares  shall  not be  taxable  to such
stockholders.

     (m) In the  event  that at any time  after the date of this  Agreement  and
prior to the  Distribution  Date,  the  Company  shall  (i)  declare  or pay any
dividend  on the  Common  Shares  payable  in  Common  Shares  or (ii)  effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of  dividends in Common  Shares)
into a greater or lesser number of Common Shares,  then in any such case (A) the
number of one  one-thousandths of a Preferred Share purchasable after such event
upon proper exercise of each Right

                                      -36-
<PAGE>

shall be  determined  by  multiplying  the  number of one  one-thousandths  of a
Preferred  Share so purchasable  immediately  prior to such event by a fraction,
the  numerator of which is the number of Common Shares  outstanding  immediately
before such event and the  denominator  of which is the number of Common  Shares
outstanding  immediately after such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common Share  outstanding  immediately prior to such event had
issued with respect to it. The  adjustments  provided for in this Section  11(n)
shall be made successively  whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.

     (n) From and after a Shares  Acquisition  Date,  the Company shall not take
(or permit any  Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable that the effect of
such action is to,  materially  diminish or  otherwise  eliminate  the  benefits
intended to be afforded by the Rights.

     Section 12.  Certificate  of Adjusted  Purchase  Price or Number of Shares.
Whenever  an  adjustment  is made as  provided  in Section 11 or 13 hereof,  the
Company shall promptly (a) prepare a certificate  setting forth such adjustment,
and a brief statement

                                      -37-
<PAGE>

of the facts accounting for such adjustment,  (b) file with the Rights Agent and
with each transfer agent for the Common Shares or the Preferred Shares a copy of
such  certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof.

     Section 13. Consolidation,  Merger or Sale or Transfer of Assets or Earning
Power.  (a) In the event that, on or following the time that a Person becomes an
Acquiring  Person,  directly or  indirectly,  (x) the Company shall  consolidate
with, or merge with and into, any Interested  Stockholder  or, if in such merger
or  consolidation  all holders of Common Stock are not treated alike,  any other
Person,  (y) the Company shall  consolidate  with, or merge with, any Interested
Stockholder or, if in such merger or  consolidation  all holders of Common Stock
are not treated alike, any other Person, and the Company shall be the continuing
or surviving  corporation of such consolidation or merger (other than, in a case
of any  transaction  described  in (x) or (y), a merger or  consolidation  which
would result in all of the securities generally entitled to vote in the election
of directors ("Voting Securities") of the Company outstanding  immediately prior
thereto  continuing to represent  (either by remaining  outstanding  or by being
converted into securities of the surviving  entity) all of the voting securities
of the Company or such surviving entity

                                      -38-
<PAGE>

outstanding  immediately  after such merger or consolidation  and the holders of
such securities not having changed as a result of such merger or consolidation),
or (z) the  Company  shall  sell or  otherwise  transfer  (or one or more of its
Subsidiaries shall sell or otherwise  transfer),  in one transaction or a series
of related  transactions,  assets or earning power  aggregating more than 50% of
the assets or earning  power of the  Company  and its  Subsidiaries  (taken as a
whole) to any Interested  Stockholder or Stockholders or, if in such transaction
all holders of Common Stock are not treated alike,  any other Person (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which  does not  violate  Section  11(o)  hereof),  then,  and in each such case
(except as part of a Permitted  Transaction),  proper provision shall be made so
that (i) each holder of a Right,  except as  provided  in  Sections  7(e) and 24
hereof, shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current  Purchase  Price, in accordance with the terms
of this  Agreement  and in lieu of  Preferred  Shares,  such  number  of  freely
tradeable  Common Shares of the Principal  Party (as hereinafter  defined),  not
subject to any liens,  encumbrances,  rights of first  refusal or other  adverse
claims,  as shall equal the result  obtained by (A) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share

                                      -39-
<PAGE>

for  which  a  Right  is then  exercisable  (without  taking  into  account  any
adjustment  previously  made  pursuant to Section  11(a)(ii))  and dividing that
product  by (B) 50% of the then  current  per share  market  price of the Common
Shares of such Principal Party (determined pursuant to Section 11 (d) hereof) on
the date of  consummation  of such Section 13 Event;  (ii) such Principal  Party
shall  thereafter be  automatically  liable for, and shall assume,  by virtue of
such Section 13 Event, all of the obligations and duties of the Company pursuant
to this Agreement;  (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being  specifically  intended that the provisions of
Section 11 hereof shall apply only to such Principal  Party  following the first
occurrence of a Section 13 Event;  and (iv) such Principal Party shall take such
steps (including,  but not limited to, the reservation of a sufficient number of
its Common Shares) in connection with the  consummation of any such  transaction
as may be necessary to assure that the  provisions  hereof shall  thereafter  be
applicable,  as nearly as  reasonably  may be, in relation to the Common  Shares
thereafter deliverable upon the exercise of the Rights.

     (a) "  Principal  Party"  shall  mean  (i) in the  case of any  transaction
described  in clause  (x) or (y) of the first  sentence  of Section  13(a),  the
Person that is the issuer of any

                                      -40-
<PAGE>

securities  into which Common Shares of the Company are converted in such merger
or  consolidation,  and if no securities  are so issued,  the Person that is the
other party to such  merger or  consolidation  (including,  if  applicable,  the
Company  if it is the  surviving  corporation);  and  (ii)  in the  case  of any
transaction  described in clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the assets or earning
power  transferred  pursuant  to such  transaction  or  transactions;  provided,
however,  that in any of the foregoing  cases,  (1) if the Common Shares of such
Person are not at such time and have not been  continuously  over the  preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect  Subsidiary of another Person the Common Shares of which
are and have been so  registered,  "Principal  Party"  shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person,  the Common Shares of two or more of which are and have been so
registered,  "Principal  Party"  shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest  aggregate market value; and (3)
in case such Person is owned, directly or indirectly,  by a joint venture formed
by two or more Persons that are not owned,  directly or indirectly,  by the same
Person, the rules set forth in (1) and (2) above shall apply to

                                      -41-
<PAGE>

each of the chains of ownership  having an interest in such joint  venture as if
such party were a  "Subsidiary"  of both or all of such joint  venturers and the
Principal  Parties in each such chain  shall bear the  obligations  set forth in
this Section 13 in the same ratio as their direct or indirect  interests in such
Person bear to the total of such interests.

     (b) The Company shall not consummate any such  consolidation,  merger, sale
or transfer  unless the  Principal  Party shall have a sufficient  number of its
authorized  Common Shares which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior  thereto the Company and such  Principal  Party shall have executed
and  delivered to the Rights Agent a  supplemental  agreement  providing for the
terms  set  forth  in  paragraphs  (a) and (b) of this  Section  13 and  further
providing  that,  as soon as  practicable  after  the date of any  consolidation
merger,  sale or transfer  mentioned  in  paragraph  (a) of this Section 13, the
Principal Party at its own expense shall:

          (i) prepare and file a registration statement under the Securities Act
     of 1933,  as  amended  (the  "Act"),  with  respect  to the  Rights and the
     securities  purchasable upon exercise of the Rights on an appropriate form,
     and will use its best efforts to cause such registration statement to

                                      -42-
<PAGE>

     (A) become  effective  as soon as  practicable  after  such  filing and (B)
     remain  effective (with a prospectus at all times meeting the  requirements
     of the Act) until the Final Expiration Date;

          (ii) use its best  efforts to qualify or  register  the Rights and the
     securities  purchasable upon exercise of the Rights under the blue sky laws
     of such jurisdictions as may be necessary or appropriate; and

          (iii) deliver to holders of the Rights historical financial statements
     for the Principal Party which comply in all respects with the  requirements
     for registration on Form 10 under the Exchange Act.

     The  provisions  of this  Section 13 shall  similarly  apply to  successive
mergers or  consolidations  or sales or other  transfers.  The rights under this
Section 13 shall be in addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise thereof.

     Section 14. Fractional Rights and Fractional  Shares. (a) The Company shall
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be

                                      -43-
<PAGE>

issuable,  an amount in cash equal to the same  fraction of the  current  market
value of a whole  Right.  For the purposes of this  Section  14(a),  the current
market  value of a whole Right shall be the closing  price of the Rights for the
Trading Day immediately  prior to the date on which such fractional Rights would
have been  otherwise  issuable.  The closing price for any day shall be the last
sale price,  regular  way, or, in case no such sale takes place on such day, the
average of the  closing  bid and asked  prices,  regular  way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities  listed or admitted to trading on the New York Stock  Exchange or,
if the  Rights  are not  listed or  admitted  to  trading  on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national  securities exchange
on which the Rights are listed or  admitted to trading or, if the Rights are not
listed or  admitted to trading on any  national  securities  exchange,  the last
quoted  price or, if not so  quoted,  the  average of the high bid and low asked
prices in the  over-the-counter  market,  as  reported  by NASDAQ or such  other
system then in use or, if on any such date the Rights are not quoted by any such
organization,  the average of the closing bid and asked prices as furnished by a
professional market maker

                                      -44-
<PAGE>

making a market in the Rights selected by the Board of Directors of the Company.
If on any such date no such market  maker is making a market in the Rights,  the
fair value of the Rights on such date as  determined  in good faith by the Board
of Directors of the Company shall be used.

     (a) The  Company  shall not be  required to issue  fractions  of  Preferred
Shares (other than fractions which are integral  multiples of one one-thousandth
of a Preferred Share) upon exercise of the Rights or to distribute  certificates
which  evidence  fractional  Preferred  Shares (other than  fractions  which are
integral  multiples of one  one-thousandth of a Preferred  Share).  Fractions of
Preferred  Shares in integral  multiples  of one  one-thousandth  of a Preferred
Share may, at the election of the Company, be evidenced by depositary  receipts,
pursuant to an  appropriate  agreement  between  the  Company  and a  depositary
selected by it;  provided that such agreement  shall provide that the holders of
such depositary  receipts shall have all the rights,  privileges and preferences
to which  they  are  entitled  as  beneficial  owners  of the  Preferred  Shares
represented by such depositary receipts.  In lieu of fractional Preferred Shares
that are not integral  multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered  holders of Right  Certificates  at the time
such Rights are exercised as herein

                                      -45-
<PAGE>

provided  an amount in cash equal to the same  fraction  of the  current  market
value of one  Preferred  Share.  For the  purposes of this  Section  14(b),  the
current  market  value of a  Preferred  Share  shall be the  closing  price of a
Preferred Share (as determined pursuant to the second sentence of Section 11 (d)
(i) hereof) for the Trading Day immediately prior to the date of such exercise.

     (b) The holder of a Right by the acceptance of the Right  expressly  waives
his right to  receive  any  fractional  Rights  or any  fractional  shares  upon
exercise of a Right (except as provided above).

     Section  15.  Rights of  Action.  All  rights of action in  respect of this
Agreement,  excepting  the  rights of action  given to the  Rights  Agent  under
Section 18 hereof, are vested in the respective  registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares),  without the consent of the Rights
Agent  or of the  holder  of any  other  Right  Certificate  (or,  prior  to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit,  enforce, and may institute and maintain any suit, action or proceeding
against  the Company to enforce,  or  otherwise  act in respect of, his right to
exercise the Rights  evidenced by such Right  Certificate in the manner provided
in such

                                      -46-
<PAGE>

Right  Certificate and in this Agreement.  Without limiting the foregoing or any
remedies  available to the holders of Rights,  it is  specifically  acknowledged
that the  holders  of Rights  would not have an  adequate  remedy at law for any
breach of this  Agreement  and will be entitled to specific  performance  of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

     Section  16.  Agreement  of Right  Holders.  Every  holder  of a Right,  by
accepting  the same,  consents  and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

     (a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;

     (b) after the  Distribution  Date, the Right  Certificates are transferable
only on the registry  books of the Rights Agent if  surrendered at the principal
office of the Rights Agent,  duly endorsed or accompanied by a proper instrument
of transfer, and

     (c) the Company and the Rights Agent may deem and treat the person in whose
name the Right  Certificate (or, prior to the Distribution  Date, the associated
Common Shares  certificate)  is registered as the absolute  owner thereof and of
the Rights

                                      -47-
<PAGE>

evidenced thereby  (notwithstanding any notations of ownership or writing on the
Right  Certificates or the associated  Common Shares  certificate made by anyone
other than the Company or the Rights  Agent) for all  purposes  whatsoever,  and
neither the Company nor the Rights  Agent shall be affected by any notice to the
contrary.

     Section 17. Right Certificate  Holder Not Deemed a Stockholder.  No holder,
as such, of any Right Certificate  shall be entitled to vote,  receive dividends
or be deemed for any  purpose  the holder of the  Preferred  Shares or any other
securities  of the Company  which may at any time be issuable on the exercise of
the Rights  represented  thereby,  nor shall anything contained herein or in any
Right  Certificate  be  construed  to  confer  upon  the  holder  of  any  Right
Certificate,  as such,  any of the rights of a stockholder of the Company or any
right to vote for the  election of  directors  or upon any matter  submitted  to
stockholders  at any  meeting  thereof,  or to give or  withhold  consent to any
corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except as provided in Section 25 hereof), or to receive dividends
or subscription  rights,  or otherwise,  until the Right or Rights  evidenced by
such  Right  Certificate  shall  have  been  exercised  in  accordance  with the
provisions hereof.

     Section 18.  Concerning the Rights Agent.  The Company agrees to pay to the
Rights Agent reasonable compensation for all

                                      -48-
<PAGE>

services  rendered  by it  hereunder  and,  from time to time,  on demand of the
Rights Agent, its reasonable  expenses and counsel fees and other  disbursements
incurred in the  administration and execution of this Agreement and the exercise
and  performance of its duties  hereunder.  The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss,  liability,  or
expense,  incurred without gross negligence,  bad faith or willful misconduct on
the part of the Rights  Agent,  for anything done or omitted by the Rights Agent
in  connection  with  the  acceptance  and  administration  of  this  Agreement,
including the costs and expenses of defending  against any claim of liability in
the premises.

     The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken,  suffered or omitted by it in connection  with, its
administration  of this  Agreement  in reliance  upon any Right  Certificate  or
certificate for the Preferred Shares or Common Shares or for other securities of
the  Company,   instrument  of  assignment  or  transfer,   power  of  attorney,
endorsement,   affidavit,  letter,  notice,  direction,   consent,  certificate,
statement,  or other  paper or  document  believed by it to be genuine and to be
signed, executed and, where necessary,  verified or acknowledged,  by the proper
person or  persons,  or  otherwise  upon the  advice of  counsel as set forth in
Section 20 hereof.

                                      -49-
<PAGE>

     Section 19. Merger or  Consolidation or Change of Name of Rights Agent. Any
corporation  into which the Rights  Agent or any  successor  Rights Agent may be
merged or with which it may be consolidated,  or any corporation  resulting from
any merger or  consolidation  to which the Rights Agent or any successor  Rights
Agent shall be a company or any corporation  succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent,  shall
be the successor to the Rights Agent under this Agreement  without the execution
or  filing  of any paper or any  further  act on the part of any of the  parties
hereto;  provided that such  corporation  would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such  successor  Rights Agent shall  succeed to the agency  created by this
Agreement,  any of the Right  Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor  Rights Agent and deliver such Right  Certificates so countersigned;
and in case at that  time any of the  Right  Certificates  shall  not have  been
countersigned,   any  successor   Rights  Agent  may   countersign   such  Right
Certificates  either in the name of the predecessor  Rights Agent or in the name
of the  successor  Rights Agent;  and in all such cases such Right  Certificates
shall  have  the full  force  provided  in the  Right  Certificates  and in this
Agreement.

                                      -50-
<PAGE>

     In case at any time the name of the Rights  Agent  shall be changed  and at
such time any of the Right  Certificates  shall have been  countersigned but not
delivered,  the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been  countersigned,  the Rights Agent may
countersign such Right  Certificates  either in its prior name or in its changed
name;  and in all such cases such Right  Certificates  shall have the full force
provided in the Right Certificates and in this Agreement.

     Section 20. Duties of Rights Agent.  The Rights Agent undertakes the duties
and  obligations  imposed  by  this  Agreement  upon  the  following  terms  and
conditions,  by all of which the Company and the holders of Right  Certificates,
by their acceptance thereof, shall be bound:

     (a) The  Rights  Agent may  consult  with legal  counsel  (who may be legal
counsel  for the  Company),  and the opinion of such  counsel  shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

                                      -51-
<PAGE>

     (b)  Whenever in the  performance  of its duties under this  Agreement  the
Rights Agent shall deem it  necessary  or  desirable  that any fact or matter be
proved or  established  by the Company  prior to taking or suffering  any action
hereunder,  such fact or matter  (unless  other  evidence in respect  thereof be
herein  specifically  prescribed)  may be deemed to be  conclusively  proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Secretary of the
Company and delivered to the Rights Agent;  and such  certificate  shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own gross negligence, bad faith or willful misconduct.

     (d) The  Rights  Agent  shall not be liable  for or by reason of any of the
statements  of fact or  recitals  contained  in this  Agreement  or in the Right
Certificates (except its countersignature  thereof) or be required to verify the
same, but all such  statements and recitals are and shall be deemed to have been
made by the Company only.

     (e) The Rights  Agent shall not be under any  responsibility  in respect of
the validity of this Agreement or the

                                      -52-
<PAGE>

execution and delivery  hereof  (except the due  execution  hereof by the Rights
Agent) or in respect  of the  validity  or  execution  of any Right  Certificate
(except  its  countersignature  thereof);  nor shall it be  responsible  for any
breach by the Company of any covenant or condition  contained in this  Agreement
or in any Right  Certificate;  nor shall it be responsible for any change in the
exercisability  of the Rights  (including  the Rights  becoming void pursuant to
Section  11 (a) (ii)  hereof)  or any  adjustment  in the  terms  of the  Rights
(including the manner,  method or amount thereof) provided for in Section 3, 11,
13, 23 or 24, or the  ascertaining  of the existence of facts that would require
any such change or  adjustment  (except  with  respect to the exercise of Rights
evidenced  by Right  Certificates  after  actual  notice  that  such  change  or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation  or  warranty  as to  the  authorization  or  reservation  of any
Preferred  Shares  to  be  issued  pursuant  to  this  Agreement  or  any  Right
Certificate or as to whether any Preferred Shares will, when issued,  be validly
authorized and issued, fully paid and nonassessable.

     (f) The  Company  agrees that it will  perform,  execute,  acknowledge  and
deliver or cause to be performed, executed,  acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the

                                      -53-
<PAGE>

Rights  Agent for the  carrying  out or  performing  by the Rights  Agent of the
provisions of this Agreement.

     (g)  The  Rights  Agent  is  hereby   authorized  and  directed  to  accept
instructions  with respect to the  performance of its duties  hereunder from any
one of the Chairman of the Board,  the Chief Executive  Officer,  the President,
any  Vice  President,  or the  Secretary  of the  Company,  and to apply to such
officers for advice or instructions in connection with its duties,  and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with  instructions  of any such officer or for any delay in acting while waiting
for those instructions.

     (h) The Rights Agent and any stockholder,  director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other  securities
of the Company or become pecuniarily  interested in any transaction in which the
Company  may be  interested,  or  contract  with or lend money to the Company or
otherwise  act as fully and freely as though it were not Rights Agent under this
Agreement.  Nothing  herein  shall  preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.

     (i) The Rights  Agent may execute and  exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents,

                                      -54-
<PAGE>

and the  Rights  Agent  shall  not be  answerable  or  accountable  for any act,
default,  neglect or misconduct of any such  attorneys or agents or for any loss
to the Company  resulting  from any such act,  default,  neglect or  misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.

     Section  21.  Change of Rights  Agent.  The Rights  Agent or any  successor
Rights Agent may resign and be discharged  from its duties under this  Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the  holders of the Right  Certificates  by  first-class  mail.  The Company may
remove the Rights  Agent or any  successor  Rights Agent upon 30 days' notice in
writing,  mailed to the Rights Agent or successor  Rights Agent, as the case may
be, and to each  transfer  agent of the  Common  Shares or  Preferred  Shares by
registered or certified  mail, and to the holders of the Right  Certificates  by
first-class  mail.  If the  Rights  Agent  shall  resign or be  removed or shall
otherwise become  incapable of acting,  the Company shall appoint a successor to
the Rights Agent.  If the Company shall fail to make such  appointment  within a
period  of 30 days  after  giving  notice of such  removal  or after it has been
notified  in writing of such  resignation  or  incapacity  by the  resigning  or
incapacitated  Rights Agent or by the holder of a Right  Certificate (who shall,
with

                                      -55-
<PAGE>

such notice,  submit his Right Certificate for inspection by the Company),  then
the  registered  holder  of any  Right  Certificate  may  apply to any  court of
competent  jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent,  whether  appointed by the Company or by such a court,  shall be a
corporation  organized  and  doing  business  under the laws of any state of the
United States,  which is authorized under such laws to exercise  corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state  authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million.  After appointment,  the
successor Rights Agent shall be vested with the same powers,  rights, duties and
responsibilities  as if it had been  originally  named as Rights  Agent  without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the  purpose.  Not later than the  effective  date of any such  appointment  the
Company shall file notice thereof in writing with the  predecessor  Rights Agent
and each  transfer  agent of the Common Shares or Preferred  Shares,  and mail a
notice thereof in writing to the registered  holders of the Right  Certificates.
Failure to give any notice provided for in

                                      -56-
<PAGE>

this Section 21, however,  or any defect therein,  shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates.  Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary,  the Company may,
at its option,  issue new Right  Certificates  evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.

     Section 23.  Redemption.  (a) The Board of Directors of the Company may, at
its option,  at any time prior to such time as any Person  becomes an  Acquiring
Person,  redeem  all but not  less  than all the then  outstanding  Rights  at a
redemption price of $.01 per Right,  appropriately adjusted to reflect any stock
split,  stock dividend or similar  transaction  occurring  after the date hereof
(such redemption price being hereinafter referred to as the "Redemption Price").
The  redemption of the Rights by the Board of Directors may be made effective at
such time,  on such basis and with such  conditions as the Board of Directors in
its sole

                                      -57-
<PAGE>

discretion  may  establish.  The Company may, at its option,  pay the Redemption
Price either in Common Shares (based on the "current per share market price", as
defined in Section 11(d) hereof, of the Common Shares at the time of redemption)
or cash;  provided,  however,  that if the Company  elects to pay the Redemption
Price in  Common  Shares,  the  Company  shall  not be  required  to  issue  any
fractional  Common  Shares,  and the number of Common  Shares  issuable  to each
holder of Rights shall be rounded down to the next whole share.

     (a)  Immediately  upon the action of the Board of  Directors of the Company
ordering the redemption of the Rights  pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption;  provided,  however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within  10 days  after  such  action  of the  Board of  Directors  ordering  the
redemption  of the Rights,  the Company shall mail a notice of redemption to all
the  holders  of the then  outstanding  Rights at their last  addresses  as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on

                                      -58-
<PAGE>

the registry books of the transfer agent for the Common Shares. Any notice which
is mailed in the manner herein  provided  shall be deemed given,  whether or not
the holder  receives the notice.  Each such notice of redemption  will state the
method by which the payment of the  Redemption  Price will be made.  Neither the
Company nor any of its Affiliates or Associates may redeem,  acquire or purchase
for value any Rights at any time in any manner other than that  specifically set
forth in this Section 23 or in Section 24 hereof,  and other than in  connection
with the purchase of Common Shares prior to the Distribution Date.

     Section 24. Exchange. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring  Person,  exchange all
or part of the then outstanding and exercisable  Rights (which shall not include
Rights that have become void  pursuant to the  provisions  of Section 11(a) (ii)
hereof) into Common  Shares at an exchange  ratio of one Common Share per Right,
appropriately  adjusted to reflect any stock  split,  stock  dividend or similar
transaction   occurring  after  the  date  hereof  (such  exchange  ratio  being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors  shall not be  empowered  to effect such  exchange at any
time after any Person  (other than the Company,  any  Subsidiary of the Company,
any employee benefit plan of the Company or any such

                                      -59-
<PAGE>

Subsidiary,  or any entity holding Common Shares for or pursuant to the terms of
any such plan),  together  with all  Affiliates  and  Associates of such Person,
becomes  the  Beneficial  Owner  of  50%  or  more  of the  Common  Shares  then
outstanding, other than pursuant to a Permitted Transaction.

     (a)  Immediately  upon the action of the Board of  Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and  without any  further  action and without any notice,  the right to exercise
such Rights shall  terminate  and the only right  thereafter of a holder of such
Rights shall be to receive  that number of Common  Shares equal to the number of
such Rights held by such holder  multiplied by the Exchange  Ratio.  The Company
shall promptly give public notice of any such exchange;  provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange.  The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein  provided shall be deemed given,  whether or not the holder  receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common  Shares  for  Rights  will be  effected  and,  in the event of any
partial  exchange,  the number of Rights  which will be  exchanged.  Any partial
exchange shall be effected pro rata based on the number of

                                      -60-
<PAGE>

Rights (other than Rights which have become void  pursuant to the  provisions of
Section 11 (a) (ii) hereof) held by each holder of Rights.

     (b) In the event that there shall not be  sufficient  Common  Shares issued
but not  outstanding or authorized but unissued to permit any exchange of Rights
as  contemplated  in accordance with this Section 24, the Company shall take all
such  action as may be  necessary  to  authorize  additional  Common  Shares for
issuance upon exchange of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to authorize
such additional  Common Shares,  the Company shall  substitute,  for each Common
Share that would  otherwise be issuable  upon  exchange of a Right,  a number of
Preferred  Shares or fraction  thereof  such that the  current per share  market
price of one Preferred  Share  multiplied by such number or fraction is equal to
the  current  per  share  market  price  of one  Common  Share as of the date of
issuance of such Preferred Shares or fraction thereof.

     (c) The Company  shall not be required to issue  fractions of Common Shares
or to distribute  certificates which evidence  fractional Common Shares. In lieu
of such  fractional  Common  Shares,  the  Company  shall pay to the  registered
holders of

                                      -61-
<PAGE>

the Right  Certificates with regard to which such fractional Common Shares would
otherwise  be  issuable  an amount  in cash  equal to the same  fraction  of the
current market value of a whole Common Share. For the purposes of this paragraph
(d), the current market value of a whole Common Share shall be the closing price
of a Common Share (as determined  pursuant to the second  sentence of Section 11
(d) (i) hereof) for the  Trading Day  immediately  prior to the date of exchange
pursuant to this Section 24.

     Section 25. Notice of Certain Events. (a) In case the Company shall propose
(i) to pay any  dividend  payable  in stock of any class to the  holders  of its
Preferred  Shares  or to make  any  other  distribution  to the  holders  of its
Preferred Shares (other than a regular  quarterly cash dividend),  (ii) to offer
to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional  Preferred Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a  reclassification  involving only the subdivision
of outstanding  Preferred  Shares),  (iv) to effect any  consolidation or merger
into or with, or to effect any sale or other  transfer (or to permit one or more
of its  Subsidiaries  to  effect  any  sale or other  transfer),  in one or more
transactions,  of 50% or more of the assets or earning  power of the Company and
its

                                      -62-
<PAGE>

Subsidiaries  (taken  as a whole)  to,  any  other  Person,  (v) to  effect  the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any  dividend  on the  Common  Shares  payable  in Common  Shares or to effect a
subdivision,   combination   or   consolidation   of  the   Common   Shares  (by
reclassification  or otherwise  than by payment of dividends in Common  Shares),
then,  in each such  case,  the  Company  shall  give to each  holder of a Right
Certificate,  in  accordance  with Section 26 hereof,  a notice of such proposed
action,  which  shall  specify  the record  date for the  purposes of such stock
dividend,  or  distribution  of rights or  warrants,  or the date on which  such
reclassification,    consolidation,   merger,   sale,   transfer,   liquidation,
dissolution,  or  winding  up is to take  place  and the  date of  participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause  (i) or (ii) above at least ten days prior to the record  date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least ten days prior to the date of the
taking of such  proposed  action  or the date of  participation  therein  by the
holders of the Common Shares and/or  Preferred  Shares,  whichever  shall be the
earlier.

                                      -63-
<PAGE>

     (a) In case the event set forth in Section 11 (a) (ii) hereof  shall occur,
then the Company shall as soon as practicable  thereafter give to each holder of
a Right  Certificate,  in  accordance  with  Section 26 hereof,  a notice of the
occurrence  of such  event,  which  notice  shall  describe  such  event and the
consequences  of such  event to  holders  of Rights  under  Section  11 (a) (ii)
hereof.

     Section 26. Notices.  Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right  Certificate  to
or on the Company  shall be  sufficiently  given or made if sent by  first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

     Candie's, Inc.
     2975 Westchester Avenue
     Purchase, New York  10577
     Attention:  Neil Cole

Subject to the provisions of Section 21 hereof,  any notice or demand authorized
by this  Agreement  to be given or made by the  Company  or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently  given or made
if sent by first-class mail,  postage prepaid,  addressed (until another address
is filed in writing with the Company) as follows:

     Continental Stock Transfer & Trust Company
     2 Broadway
     New York, New York  10004
     Attention:  Compliance Department

                                      -64-
<PAGE>

Notices  or  demands  authorized  by this  Agreement  to be given or made by the
Company or the  Rights  Agent to the  holder of any Right  Certificate  shall be
sufficiently  given  or  made  if sent by  first-class  mail,  postage  prepaid,
addressed  to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 27.  Supplements and Amendments.  The Company may from time to time
supplement or amend this Agreement  without the approval of any holders of Right
Certificates  in order to cure any  ambiguity,  to  correct  or  supplement  any
provision contained herein which may be defective or inconsistent with any other
provisions  herein,  or to make any other  provisions with respect to the Rights
which the  Company may deem  necessary  or  desirable,  any such  supplement  or
amendment  to be  evidenced  by a writing  signed by the  Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring  Person,  this  Agreement may not be amended in any manner which would
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate  thereof).  Without  limiting the foregoing,
the  Company  may at any  time  prior  to such  time as any  Person  becomes  an
Acquiring  Person  amend this  Agreement  to lower the  thresholds  set forth in
Sections l(a) and

                                      -65-
<PAGE>

3(a) to not  less  than the  greater  of (i) the sum of  .001%  and the  largest
percentage  of the  outstanding  Common  Shares  then known by the Company to be
beneficially owned by any Person (other than the Company,  any Subsidiary of the
Company,  any  employee  benefit  plan of the Company or any  Subsidiary  of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan) and (ii) 10%.  Upon the delivery of a  certificate  from an executive
officer of the Company which states that the proposed supplement or amendment is
in compliance  with the terms of this Section 27, the Rights Agent shall execute
such  supplement or amendment,  provided that such  supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under Section
18 or  Section  20 of  this  Agreement.  Prior  to the  Distribution  Date,  the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Shares.

     Section  28.  Determinations,  and Actions by the Board of  Directors.  The
Board of Directors of the Company shall have the  exclusive  power and authority
to administer this Agreement and to exercise all rights and powers  specifically
granted to the Board,  or the  Company,  or as may be  necessary or advisable in
connection  with  the  administration  of  this  Agreement,  including,  without
limitation, the right and power to (i) interpret the provisions of

                                      -66-
<PAGE>

this Agreement,  and (ii) make all determinations  deemed necessary or advisable
for the  administration  of this Agreement  (including,  without  limitation,  a
determination  to redeem or not redeem the Rights or to amend the  Agreement and
whether any proposed amendment adversely affects the interests of the holders of
Right Certificates).  For all purposes of this Agreement, any calculation of the
number of Common Shares or other securities  outstanding at any particular time,
including  for  purposes  of  determining  the  particular  percentage  of  such
outstanding  Common  Shares or any other  securities  of which any Person is the
Beneficial  Owner,  shall be made in  accordance  with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect  on  the  date  of  this  Agreement.  All  such  actions,   calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final,  conclusive and binding upon the Company, the
Rights Agent, the holders of the Right  Certificates and all other parties,  and
(y)  not  subject  the  Board  to any  liability  to the  holders  of the  Right
Certificates.

     Section 29. Successors.  All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights  Agent shall be binding  upon
and inure to the benefit of said  parties and their  respective  successors  and
assigns.

                                      -67-
<PAGE>

     Section 30. Benefits of this Agreement.  Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered  holders of the Right  Certificates  (and,  prior to the Distribution
Date,  the Common  Shares) any legal or equitable  right,  remedy or claim under
this Agreement;  but this Agreement shall be for the sole and exclusive  benefit
of the  Company,  the  Rights  Agent  and the  registered  holders  of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).

     Section 31. Severability.  If any term, provision,  covenant or restriction
of this  Agreement  is  held  by a court  of  competent  jurisdiction  or  other
authority  to be invalid,  void or  unenforceable,  the  remainder of the terms,
provisions,  covenants and  restrictions  of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     Section 32. Governing Law. This Agreement and each Right Certificate issued
hereunder  shall be deemed to be a contract  made under the laws of the State of
Delaware and for all purposes  shall be governed by and  construed in accordance
with the laws of such State  applicable  to contracts  to be made and  performed
entirely within such State.

                                      -68-
<PAGE>

     Section 33.  Counterparts.  This Agreement may be executed in any number of
counterparts,  each of which shall for all purposes be deemed to be an original,
and all of which shall together constitute but one and the same instrument.

     Section  34.  Descriptive  Headings.  Descriptive  headings  of the several
Sections of this  Agreement  are inserted for  convenience  only,  and shall not
control or affect the meaning or interpretation of any of the provisions hereof.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and attested, all as of the day and year first above written.

                                             CANDIE'S, INC.

Attest:

By                                           By  /s/ Neil Cole
   -----------------------------                 -------------------------------
   Title:                                        Title:  President

Attest:                                      CONTINENTAL STOCK TRANSFER &
                                              TRUST COMPANY
                                               as Rights Agent

By                                           By  /s/ William Seegraber
   -----------------------------                 -------------------------------
   Title:                                        Title: Vice President

                                      -69-
<PAGE>

                                                                       Exhibit A

                                     FORM OF
                 CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS,
              PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
                OTHER SPECIAL RIGHTS, AND OF THE QUALIFICATIONS,
                    LIMITATIONS OR RESTRICTIONS, OF SERIES A
                      JUNIOR PARTICIPATING PREFERRED STOCK
                           ($.01 Par Value Per Share)

                                       OF

                                 CANDIE'S, INC.

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

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

     The  undersigned  hereby  certifies that the following  resolution was duly
adopted by the Board of Directors  of  Candie's,  Inc.  (the  "Corporation"),  a
corporation  organized and existing by virtue of the General  Corporation Law of
the State of Delaware (the "DGCL"), on January 25, 2000:

     RESOLVED,  that pursuant to authority conferred upon the Board of Directors
of the  Corporation  by its  Certificate  of  Incorporation,  a  Series A Junior
Participating  Preferred  Stock of the  Corporation is hereby  created,  and the
designation and amount thereof and the voting powers,  preferences and relative,
participating,  optional or other  special  rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, are as follows:

     Section 1.  Designation  and Number of  Shares.  The shares of such  series
shall be  designated  as  "Series A Junior  Participating  Cumulative  Preferred
Stock" ("Series A Preferred Stock"). The number of shares initially constituting
the Series A Stock  shall be 18,000;  provided,  however,  that,  if more than a
total of 18,000 shares of Series A Preferred Stock shall be at any time issuable
upon the  exercise  of Rights  (the  "Rights")  issued  pursuant  to the  Rights
Agreement, dated as of January 26, 2000, between the Corporation and Continental
Stock Transfer and Trust Company,  as Rights Agent, as amended from time to time
(the "Rights

<PAGE>

Agreement"),  the Board of  Directors,  pursuant to Section  151(g) of the DGCL,
shall  direct by  resolution  or  resolutions  that a  certificate  be  properly
executed, acknowledged, filed and recorded, in accordance with the provisions of
Section  103  thereof,  providing  for the  total  number  of shares of Series A
Preferred Stock  authorized to be issued to be increased (to the extent that the
Certificate of Incorporation then permits) to the largest number of whole shares
(rounded up to the nearest  whole  number) then  issuable  upon exercise of such
Rights.

     Section 2. Dividends and Distributions.

          (a)  Subject to the rights of the  holders of any shares of any series
     of Preferred Stock (or any similar stock) ranking prior and superior to the
     Series A Preferred  Stock with respect to dividends,  the holders of shares
     of Series A Preferred  Stock,  in preference to the holders of Common Stock
     and of any other junior stock,  shall be entitled to receive,  when, as and
     if declared by the Board of Directors  out of funds  legally  available for
     the purpose, quarterly dividends payable in cash on the first day of March,
     June, September and December in each year (each such date being referred to
     herein as a "Quarterly  Dividend  Payment  Date"),  commencing on the first
     Quarterly  Dividend  Payment  Date after the first  issuance  of a share or
     fraction  of a share of Series A  Preferred  Stock,  in an amount per share
     (rounded  to the  nearest  cent)  equal to the greater of (i) $1.00 or (ii)
     subject to the provision for adjustment  hereinafter set forth, 1,000 times
     the aggregate per share amount of all cash  dividends,  and 1,000 times the
     aggregate per share amount  (payable in kind) of all non-cash  dividends or
     other  distributions,  other  than a  dividend  payable in shares of Common
     Stock or a  subdivision  of the  outstanding  shares  of  Common  Stock (by
     reclassification  or  otherwise),  declared  on the Common  Stock since the
     immediately  preceding  Quarterly Dividend Payment Date or, with respect to
     the first Quarterly  Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred  Stock. In the event the
     Corporation  shall at any time  declare or pay any  dividend  on the Common
     Stock  payable  in shares  of Common  Stock,  or  effect a  subdivision  or
     combination or consolidation of the outstanding  shares of Common Stock (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Common  Stock) into a greater or lesser  number of shares of Common  Stock,
     then in each such case the  amount to which  holders  of shares of Series A
     Preferred Stock were entitled  immediately prior to such event under clause
     (ii) of

                                      A-2
<PAGE>

     the preceding  sentence shall be adjusted by  multiplying  such amount by a
     fraction,  the  numerator  of which is the number of shares of Common Stock
     outstanding  immediately  after such event and the  denominator of which is
     the  number of shares of Common  Stock  that were  outstanding  immediately
     prior to such event.

          (b) The  Corporation  shall declare a dividend or  distribution on the
     Series A Preferred  Stock as provided in  paragraph  (a) of this  Section 2
     immediately  after it  declares a dividend  or  distribution  on the Common
     Stock (other than a dividend  payable in shares of Common Stock);  provided
     that, in the event no dividend or distribution  shall have been declared on
     the Common Stock during the period between any Quarterly  Dividend  Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1.00 per share on the  Series A  Preferred  Stock  shall  nevertheless  be
     payable on such subsequent Quarterly Dividend Payment Date.

          (c) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
     next  preceding the date of issue of such shares,  unless the date of issue
     of such shares is prior to the record date for the first Quarterly Dividend
     Payment Date, in which case  dividends on such shares shall begin to accrue
     from the date of issue of such  shares,  or  unless  the date of issue is a
     Quarterly  Dividend Payment Date or is a date after the record date for the
     determination  of holders of shares of Series A Preferred Stock entitled to
     receive a quarterly  dividend and before such  Quarterly  Dividend  Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly  Dividend  Payment Date.  Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series A
     Preferred  Stock in an amount less than the total amount of such  dividends
     at the time accrued and payable on such shares shall be allocated  pro rata
     on a  share-by-share  basis among all such shares at the time  outstanding.
     The  Board of  Directors  may fix a record  date for the  determination  of
     holders of shares of Series A Preferred  Stock entitled to receive  payment
     of a dividend or distribution declared thereon,  which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

     Section 1. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

                                      A-3
<PAGE>

          (a) Subject to the provision  for  adjustment  hereinafter  set forth,
     each share of Series A Preferred  Stock shall entitle the holder thereof to
     1,000 votes on all matters  submitted to a vote of the  stockholders of the
     Corporation.  In the event the Corporation shall at any time declare or pay
     any  dividend on the Common  Stock  payable in shares of Common  Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of  Common  Stock,  then in each  such case the  number of votes per
     share to which holders of shares of Series A Preferred  Stock were entitled
     immediately  prior to such event  shall be  adjusted  by  multiplying  such
     number by a  fraction,  the  numerator  of which is the number of shares of
     Common Stock  outstanding  immediately after such event and the denominator
     of which is the  number of shares of  Common  Stock  that were  outstanding
     immediately prior to such event.

          (b) Except as otherwise provided in this Certificate of Incorporation,
     in any Preferred  Stock  Designation or in any  certificate of designations
     creating  any similar  stock,  or by law, the holders of shares of Series A
     Preferred  Stock and the  holders  of shares of Common  Stock and any other
     capital stock of the  Corporation  having  general voting rights shall vote
     together as one class on all matters submitted to a vote of stockholders of
     the Corporation.

          (c)  Except as set forth  herein,  or as  otherwise  provided  by law,
     holders of Series A Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with  holders of Common  Stock as set forth  herein) for taking any
     corporate action.

     Section 1. Certain Restrictions.

          (a) Whenever  quarterly  dividends or other dividends or distributions
     payable on the Series A  Preferred  Stock as  provided  in Section 2 are in
     arrears,  thereafter  and  until  all  accrued  and  unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series A  Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock;

                                      A-4
<PAGE>

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up)  with  the  Series A
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series  A
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series A Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any shares of Series A Preferred Stock, or any shares of stock ranking
          on a parity with the Series A Preferred  Stock,  except in  accordance
          with a purchase offer made in writing or by publication (as determined
          by the Board of  Directors)  to all  holders of such  shares upon such
          terms as the Board of Directors, after consideration of the respective
          annual dividend rates and other relative rights and preferences of the
          respective  series and  classes,  shall  determine  in good faith will
          result in fair and equitable  treatment among the respective series or
          classes.

          (b) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the Corporation  unless the Corporation  could, under paragraph (a) of this
     Section 4,  purchase or  otherwise  acquire such shares at such time and in
     such manner.

     Section  1.  Reacquired  Shares.  Any  shares of Series A  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired promptly after the acquisition  thereof.  All such shares shall
upon  their  retirement  become  authorized  but  unissued  shares  of  Series A
Preferred  Stock  and may be  reissued  as  part of a new  series  of  Series  A
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein or in any  Certificate  of  Designations  creating a series of  Preferred
Stock or any similar stock or as otherwise required by law.

                                      A-5
<PAGE>

     Section 2.  Liquidation,  Dissolution or Winding Up. Upon any  liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series A Preferred Stock unless,
prior  thereto,  the  holders of shares of Series A  Preferred  Stock shall have
received  an amount  equal to accrued  and unpaid  dividends  and  distributions
thereon,  whether or not declared,  to the date of such payment,  plus an amount
equal to the greater of $1.00 per share or an  aggregate  amount per share equal
to 1,000 times the aggregate  amount to be  distributed  per share to holders of
shares of Common  Stock,  or (2) to the holders of shares of stock  ranking on a
parity (either as to dividends or upon  liquidation,  dissolution or winding up)
with the Series A Preferred  Stock,  except  distributions  made  ratably on the
Series A Preferred  Stock and all such parity stock in  proportion  to the total
amounts  to which  the  holders  of all  such  shares  are  entitled  upon  such
liquidation, dissolution or winding up; provided, however, that in the event the
Corporation  shall at any time  declare or pay any  dividend on the Common Stock
payable in shares of Common Stock,  or effect a subdivision  or  combination  or
consolidation of the outstanding shares of Common Stock (by  reclassification or
otherwise  than by  payment  of a  dividend  in shares of Common  Stock)  into a
greater or lesser number of shares of Common  Stock,  then in each such case the
aggregate  amount to which  holders of shares of Series A  Preferred  Stock were
entitled  immediately  prior to such event shall be adjusted by multiplying such
amount by a fraction  the  numerator  of which is the number of shares of Common
Stock  outstanding  immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding  immediately prior to
such event.

     Section 3. Consolidation,  Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an amount  per  share,  subject to the  provision  for  adjustment
hereinafter  set  forth,  equal to 1,000  times the  aggregate  amount of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or exchanged.

                                      A-6
<PAGE>

In the event the  Corporation  shall at any time  declare or pay any dividend on
the Common Stock payable in shares of Common Stock,  or effect a subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the amount set forth in the  preceding  sentence  with  respect to the
exchange  or change of shares of Series A  Preferred  Stock shall be adjusted by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     Section 4. No Redemption.  The shares of Series A Preferred Stock shall not
be redeemable.

     Section 5. Rank. The Series A Preferred  Stock shall rank,  with respect to
the  payment of  dividends  and the  distribution  of assets  upon  liquidation,
dissolution or winding up of the Corporation,  whether voluntary or involuntary,
junior to all other series of the Corporation's Preferred Stock.

     Section 6. Amendment.  The Certificate of  Incorporation of the Corporation
shall not be amended in any manner  which would  materially  alter or change the
powers,  preferences or special rights of the Series A Preferred  Stock so as to
affect them adversely  without the  affirmative  vote of the holders of at least
two-thirds  of the  outstanding  shares  of  Series A  Preferred  Stock,  voting
together as a single class.

                                      A-7
<PAGE>

                                                                       Exhibit B

                            Form of Right Certificate

Certificate No. R-                                                        Rights

          NOT  EXERCISABLE  AFTER  JANUARY 26, 2010 OR EARLIER IF  REDEMPTION OR
          EXCHANGE  OCCURS.  THE RIGHTS ARE  SUBJECT TO  REDEMPTION  AT $.01 PER
          RIGHT,  AND TO  EXCHANGE  UPON  THE  TERMS  SET  FORTH  IN THE  RIGHTS
          AGREEMENT.  UNDER  CERTAIN  CIRCUMSTANCES  AS SET FORTH IN THE  RIGHTS
          AGREEMENT, RIGHTS ISSUED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON
          (AS DEFINED IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.

                                Right Certificate

                                 Candie's, Inc.

     This  certifies  that   ______________,   or  registered  assigns,  is  the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement,  dated as of January  26,  2000 (as  amended  from time to time,  the
"Rights  Agreement"),  between  Candie's,  Inc.,  a  Delaware  corporation  (the
"Company"), and Continental Stock Transfer & Trust Company (the "Rights Agent"),
to purchase  from the Company at any time after the  Distribution  Date (as such
term is defined in the Rights  Agreement)  and prior to the  earlier of (i) 5:00
P.M.,  New York,  New York time,  on January 26, 2010, or (ii) the time at which
the Rights are redeemed or exchanged (as defined below), at the principal office
of the Rights  Agent,  or at the office of its  successor as Rights  Agent,  one
one-thousandth  of  a  fully  paid  nonassessable   share  of  Series  A  Junior
Participating  Preferred  Stock,  par  value  $.01  per  share  (the  "Preferred
Shares"), of the Company, at a purchase price of $6.00 per one one-thousandth of
a Preferred Share (the "Purchase  Price"),  upon  presentation  and surrender of
this Right Certificate with the Form of Election to Purchase duly executed.  The
number of Rights  evidenced  by this  Right  Certificate  (and the number of one
one-thousandths  of a  Preferred  Share  which may be  purchased  upon  exercise
hereof) set forth above,  and the Purchase Price set forth above, are the number
and Purchase Price as of January 25, 2000, based upon the

<PAGE>

Preferred  Shares  as  constituted  at such  date.  As  provided  in the  Rights
Agreement,  the  Purchase  Price  and the  number  of one  one-thousandths  of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right  Certificate are subject to  modification  and adjustment upon the
happening of certain events.

     This Right  Certificate  is subject  to all of the  terms,  provisions  and
conditions of the Rights Agreement,  which terms,  provisions and conditions are
hereby  incorporated  herein by  reference  and made a part  hereof and to which
Rights Agreement  reference is hereby made for a full description of the rights,
limitations  of rights,  obligations,  duties and  immunities  hereunder  of the
Rights Agent, the Company and the holders of the Right  Certificates.  Copies of
the  Rights  Agreement  are on file at the  principal  executive  offices of the
Company and the above-mentioned offices of the Rights Agent.

     This Right  Certificate,  with or without  other Right  Certificates,  upon
surrender at the  principal  office of the Rights  Agent,  may be exchanged  for
another  Right  Certificate  or  Right  Certificates  of  like  tenor  and  date
evidencing  Rights  entitling the holder to purchase a like aggregate  number of
Preferred  Shares as the  Rights  evidenced  by the Right  Certificate  or Right
Certificates  surrendered  shall have entitled such holder to purchase.  If this
Right  Certificate  shall be exercised in part,  the holder shall be entitled to
receive upon surrender  hereof another Right  Certificate or Right  Certificates
for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement,  the Rights evidenced by
this  Certificate  (i) may be redeemed by the Company at a  redemption  price of
$.01 per Right,  payable in cash or the Company's  Common Stock, par value $.001
per share (the "Common Stock"), or (ii) may be exchanged in whole or in part for
Common Stock. No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights  evidenced  hereby (other than fractions  which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.

     No holder of this Right  Certificate  shall be  entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred  Shares or of
any other securities of the Company

                                      B-2
<PAGE>

which may at any time be issuable on the  exercise  hereof,  nor shall  anything
contained  in the Rights  Agreement  or herein be  construed  to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the  election of  directors  or upon any matter  submitted  to
stockholders  at any  meeting  thereof,  or to give or  withhold  consent to any
corporate  action,  or to receive notice of meetings or other actions  affecting
stockholders  (except  as  provided  in the  Rights  Agreement),  or to  receive
dividends  or  subscription  rights,  or  otherwise,  until  the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.

     This Right  Certificate  shall not be valid or  obligatory  for any purpose
until it shall have been countersigned by the Rights Agent.

     WITNESS the facsimile  signature of the proper  officers of the Company and
its corporate seal. Dated as of:_____________________.

ATTEST:                                      CANDIE'S, INC.

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

Countersigned:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
   as Rights Agent

By
   ------------------------------
   Authorized Officer

                                      B-3
<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificate.)

     FOR  VALUE  RECEIVED,  ____________________________________________________
hereby sells, assigns and transfers unto _______________________________________

________________________________________________________________________________
                  (Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and
does hereby  irrevocably  constitute and appoint  _______________  Attorney,  to
transfer the within Right Certificate on the books of the within-named  Company,
with full power of substitution.

Dated: _____________________, ________

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

Signature Guaranteed:

________________________________________________________________________________

     The  undersigned  hereby  certifies  that (1) the Rights  evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate  thereof
(as such terms are  defined in the Rights  Agreement)  and (2) after due inquiry
and to the best knowledge of the  undersigned,  the  undersigned did not acquire
the Rights evidenced by this Right  Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).

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

                                      B-4
<PAGE>

              Form of Reverse Side of Right Certificate (Continued)

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if bolder desires to exercise
                  Rights represented by the Right Certificate.)

To: Candie's, Inc.

     The undersigned hereby irrevocably elects to exercise Rights represented by
this Right  Certificate  to purchase  the  Preferred  Shares  issuable  upon the
exercise of such Rights and requests that certificates for such Preferred Shares
be issued in the name of:

Please insert social security or other identifying number

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________
If such  number of Rights  shall not be all the Rights  evidenced  by this Right
Certificate,  a new Right  Certificate for the balance  remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security or other identifying number

________________________________________________________________________________
                         (Please print name and address)

Dated: ______________________________

                                             ___________________________________
                                             Signature

Signature Guaranteed:

________________________________________________________________________________

     The  undersigned  hereby  certifies  that (1) the Rights  evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate  thereof
(as such terms are  defined in the Rights  Agreement)  and (2) after due inquiry
and to the best knowledge of the  undersigned,  the  undersigned did not acquire
the Rights evidenced by this Right  Certificate from any Person who is or was an
Acquiring Person or

                                      B-5
<PAGE>

an  Affiliate  or  Associate  thereof  (as such terms are  defined in the Rights
Agreement).

                                             ___________________________________
                                             Signature

                                      B-6
<PAGE>

                                     NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the event the certification set forth above in the Form of Assignment or
the Form of  Election to  Purchase,  as the case may be, is not  completed,  the
Company  and the  Rights  Agent  will deem the  beneficial  owner of the  Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights  Agreement),  and such Assignment or
Election to Purchase will not be honored.

                                      B-7
<PAGE>

                                                                       Exhibit C

                                     FORM OF
                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

     The Board of Directors of Candie's,  Inc.  (the  "Company")  has declared a
dividend of one preferred share purchase right (a "Right") for each  outstanding
share of common stock, par value $.001 per share (the "Common  Shares"),  of the
Company. The dividend is payable to holders of record of Common Shares as of the
close of business on February 11, 2000 (the "Record Date").  Each Right entitles
the registered holder to purchase from the Company one one-thousandth of a share
of Series A Junior Participating  Preferred Stock, par value $.01 per share (the
"Preferred  Shares"),  of the Company at a price of $6.00 per one one-thousandth
of a  Preferred  Share  (the  "Purchase  Price"),  subject  to  adjustment.  The
description  and terms of the  Rights are set forth in a Rights  Agreement  (the
"Rights  Agreement")  between the Company  and  Continental  St Transfer & Trust
Company, as Rights Agent (the "Rights Agent").

     Until the earlier to occur of (i) ten days following a public  announcement
that a person  or group of  affiliated  or  associated  persons  (an  "Acquiring
Person") have acquired  beneficial  ownership of 15% or more of the  outstanding
Common Shares or (ii) ten business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any person or group of
affiliated  persons becomes an Acquiring  Person) following the commencement of,
or  announcement  of an intention to make, a tender offer or exchange  offer the
consummation  of which would result in the  beneficial  ownership by a person or
group of 15% or more of the outstanding Common Shares (the earlier of such dates
being  called the  "Distribution  Date"),  the Rights  will be  evidenced,  with
respect to any of the Common  Share  certificates  outstanding  as of the Record
Date,  by such Common  Share  certificate  with a copy of this Summary of Rights
attached thereto.

     The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the

<PAGE>

Rights  will be  transferred  with and only with the  Common  Shares.  Until the
Distribution  Date (or earlier  redemption  or  expiration  of the Rights),  new
Common  Share  certificates  issued  after the Record Date upon  transfer or new
issuance  of Common  Shares  will  contain a notation  incorporating  the Rights
Agreement by reference.  Until the Distribution  Date (or earlier  redemption or
expiration of the Rights),  the surrender for transfer of any  certificates  for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto,  will also constitute the
transfer of the Rights  associated  with the Common Shares  represented  by such
certificate.  As soon as practicable  following the Distribution Date,  separate
certificates  evidencing  the Rights  ("Right  Certificates")  will be mailed to
holders  of record of the  Common  Shares  as of the  close of  business  on the
Distribution Date and such separate Right  Certificates  alone will evidence the
Rights.

     The Rights are not exercisable until the Distribution Date. The Rights will
expire on January  26,  2010 (the  "Final  Expiration  Date"),  unless the Final
Expiration  Date is  extended  or unless  the  Rights are  earlier  redeemed  or
exchanged by the Company, in each case as described below.

     The Purchase  Price  payable,  and the number of Preferred  Shares or other
securities  or  property  issuable,  upon  exercise of the Rights are subject to
adjustment  from time to time to  prevent  dilution  (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or  warrants  to  subscribe  for or  purchase  Preferred  Shares at a price,  or
securities  convertible into Preferred Shares with a conversion price, less than
the  then-current  market  price  of the  Preferred  Shares  or  (iii)  upon the
distribution to holders of the Preferred  Shares of evidences of indebtedness or
assets  (excluding  regular  periodic  cash  dividends  paid out of  earnings or
retained  earnings or dividends  payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).

     The number of outstanding Rights and the number of one one-thousandths of a
Preferred  Share  issuable  upon  exercise  of each  Right are also  subject  to
adjustment  in the  event  of a stock  split  of the  Common  Shares  or a stock
dividend  on the  Common  Shares  payable  in  Common  Shares  or  subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

                                      C-2
<PAGE>

     Preferred  Shares  purchasable  upon  exercise  of the  Rights  will not be
redeemable.  Each  Preferred  Share will be entitled  to a minimum  preferential
quarterly  dividend  payment  of $1.00  per  share  but will be  entitled  to an
aggregate dividend of 1,000 times the dividend declared per Common Share. In the
event of liquidation,  the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1.00 per share but will be entitled
to an aggregate  payment of 1,000 times the payment made per Common Share.  Each
Preferred  Share will have 1,000 votes,  voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged,  each  Preferred  Share will be entitled to receive
1,000 times the amount received per Common Share.  These rights are protected by
customary antidilution provisions.

     Because of the nature of the Preferred  Shares'  dividend,  liquidation and
voting rights,  the value of the  one-thousandth  interest in a Preferred  Share
purchasable  upon  exercise of each Right  should  approximate  the value of one
Common Share.

     In the event that any person or group of affiliated  or associated  persons
becomes an Acquiring Person,  proper provision shall be made so that each holder
of a Right, other than Rights  beneficially owned by the Acquiring Person or its
affiliate,  associate  or  transferee  (which  will  thereafter  be void),  will
thereafter  have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right. In the event
that  the  Company  is  acquired  in a  merger  or  other  business  combination
transaction or 50% or more of its consolidated  assets or earning power are sold
after a person or group has become an  Acquiring  Person in a  transaction  with
such  Acquiring  Person or  group,  proper  provision  will be made so that each
holder of a Right will thereafter  have the right to receive,  upon the exercise
thereof at the then current  exercise price of the Right,  that number of shares
of common stock of the acquiring  company which at the time of such  transaction
will have a market value of two times the exercise  price of the Right.  In each
case,  there  are  exceptions  for  transactions  that have  received  the prior
approval of the Board of Directors.

     At any time after any person or group becomes an Acquiring Person and prior
to the  acquisition  by such  person or group of 50% or more of the  outstanding
Common Shares, the Board of Directors

                                      C-3
<PAGE>

of the Company may exchange  the Rights  (other than Rights owned by such person
or group which will have become void), in whole or in part, at an exchange ratio
of one Common Share, or one  one-thousandth  of a Preferred Share (or of a share
of a class or series of the Company's  preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).

     With  certain  exceptions,  no  adjustment  in the  Purchase  Price will be
required until  cumulative  adjustments  require an adjustment of at least 1% in
such Purchase Price. No fractional  Preferred  Shares will be issued (other than
fractions  which are  integral  multiples of one  one-thousandth  of a Preferred
Share,  which may, at the  election of the Company,  be evidenced by  depositary
receipts) and in lieu  thereof,  an adjustment in cash will be made based on the
market price of the  Preferred  Shares on the last trading day prior to the date
of exercise.

     At any time prior to the  acquisition by a person or group of affiliated or
associated  persons of  beneficial  ownership of 15% or more of the  outstanding
Common  Shares,  the Board of  Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right,  payable in cash or Common
Shares  (the  "Redemption  Price").  The  redemption  of the  Rights may be made
effective  at such  time on such  basis  with  such  conditions  as the Board of
Directors in its sole discretion may establish.  Immediately upon any redemption
of the Rights,  the right to exercise  the Rights  will  terminate  and the only
right of the holders of Rights will be to receive the Redemption Price.

     The terms of the Rights may be  amended  by the Board of  Directors  of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds  described above to not less than the greater of (i)
the sum of .001% and the largest  percentage  of the  outstanding  Common Shares
then  known to the  Company to be  beneficially  owned by any person or group of
affiliated or associated  persons and (ii) 10%,  except that from and after such
time as any  person or group of  affiliated  or  associated  persons  becomes an
Acquiring  Person no such  amendment may  adversely  affect the interests of the
holders of the Rights.

     Until a Right is  exercised,  the  holder  thereof,  as such,  will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.

                                      C-4
<PAGE>

     A copy of the  Rights  Agreement  has been filed  with the  Securities  and
Exchange  Commission as an Exhibit to the Company's  Current  Report on Form 8-K
dated  January 26,  2000. A copy of the Rights  Agreement  is available  free of
charge from the Company. This summary description of the Rights does not purport
to be complete  and is  qualified  in its  entirety by  reference  to the Rights
Agreement,  as amended from time to time, which is hereby incorporated herein by
reference.

                                      C-5TECH LABORATORIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                                                    COMMON STOCK
   NUMBER                                                              SHARES
-------------                                                       ------------
                             Tech Laboratories, Inc.
-------------                                                       ------------

INCORPORATED UNDER THE LAWS                  SEE REVERSE FOR CERTAIN DEFINITIONS
OF THE STATE OF NEW JERSEY                            CUSIP 878249101

THIS CERTIFIES THAT
                   -------------------------------------------------------------
IS THE OWNER OF
               -----------------------------------------------------------------

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.01 EACH,
OF

                             Tech Laboratories, Inc.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed.

     This certificate is not valid unless countersigned and registered by
the Transfer Agent and Registrar.

     WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

Dated:

                   [Corporate Seal of Tech Laboratories, Inc.]

/s/ Carmen O. Pellosie, Jr.                     /s/ Bernard M. Ciongoli
----------------------------                        -----------------------
          SECRETARY                                    PRESIDENT

COUNTERSIGNED & REGISTERED:
    INTERWEST TRANSFER CO., INC.
             (Salt Lake City, Utah)

TRANSFER AGENT
AND REGISTRAR,

BY
  -----------------------------------
                   AUTHORIZED OFFICER

<PAGE>

     The Corporation will furnish without charge to each stockholder who so
requests a statement of the number of shares constituting each class or series
of stock and the designation thereof, and a copy of the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

                TEN COM -- as tenants in common
                TEN ENT -- as tenants by the entireties
                JT TEN  -- as joint tenants with right of survivorship and not
                           as tenants in common

                UNIF GIFT MIN ACT --          Custodian
                                    -----------------------------
                                    (Cust)                (Minor)
                                    under Uniform Gifts to Minors
                                    Act
                                       --------------------------
                                               (State)

   Additional abbreviations may also be used though not in the above list.

        For value received,              hereby sell, assign and transfer unto
                            ------------

PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

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

- ------------------------------------------------------------------------------
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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

- ------------------------------------------------------------------------------
                                                                          shares
- --------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
                                                                        Attorney
- ------------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated
     -------------------------

<PAGE>

    ----------------------------------------------------------------------------
    NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
            WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
            ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED:

- ------------------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-16.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]