Document:

STOCKHOLDERS AGREEMENT

                  This STOCKHOLDERS  AGREEMENT dated as of  February 25, 2000 by
and among Cosmair, Inc., a  Delaware  corporation ("Parent"), Crayon Acquisition
Corp., a Delaware  corporation wholly  owned by  Parent ("Sub"), Carson, Inc., a
Delaware  corporation  (the  "Company"), and  the  stockholders  of  the Company
signatory   hereto  (individually,   a  "Stockholder"  and,   collectively,  the
"Stockholders").

                                   WITNESSETH:

         WHEREAS,  concurrently  herewith,  Parent,  Sub  and  the  Company  are
entering into an Agreement  and Plan of Merger (as such  agreement may hereafter
be amended from time to time, the "Merger Agreement") pursuant to which Sub will
be merged with and into the Company (the "Merger");

         WHEREAS,  in furtherance  of the Merger,  Parent and the Company desire
that as soon as  practicable  (and not later than eight business days) after the
execution and delivery of the Merger Agreement, Sub commence a cash tender offer
to purchase any and all  outstanding  shares of Class A Common Stock (as defined
in Section 1.1); and

         WHEREAS,  as an inducement  and a condition to entering into the Merger
Agreement,  Parent has required that the Company and Stockholders agree, and the
Company and Stockholders have agreed, to enter into this Agreement;

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
premises,  representations,   warranties,  covenants  and  agreements  contained
herein,  the parties  hereto,  intending  to be legally  bound,  hereby agree as
follows:

         1.       Definitions.  For purposes of this Agreement:

                  1.1      "Class A Common Stock" shall  mean the Class A Common
Stock, $.01 par value, of the Company.

                  1.2      "Class C Common Stock" shall  mean the Class C Common
Stock, $.01 par value, of the Company.

                  1.3 "Company Common Stock" shall mean, collectively, the Class
A Common Stock and the Class C Common Stock.

                  1.4   "Person"   shall   mean  an   individual,   corporation,
partnership,  joint venture,  association,  trust, unincorporated  organization,
limited liability company or other entity.

         Other capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement.

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         2.       Tenders of Shares.

                  2.1  Tender Requirement. Promptly following receipt of written
notice from Parent and Sub that at least 565,857  shares of Class A Common Stock
have been validly tendered in (and not withdrawn from) the Offer and that Parent
and Sub are  prepared  to accept for  payment  and pay for all shares of Class A
Common Stock so tendered and not withdrawn,  each  Stockholder  shall  (provided
that the Offer has not been  amended in a manner  adverse  to such  Stockholder)
convert  all of their  shares  of Class C Common  Stock  into  shares of Class A
Common Stock and validly  tender (and not  withdraw)  all of such  Stockholder's
shares of Class A Common Stock  pursuant to and in accordance  with the terms of
the Offer. Each Stockholder  hereby  acknowledges and agrees that the obligation
of Parent or Sub to accept for payment and pay for Company  Common  Stock in the
Offer,  including  the  Shares,  is subject to the terms and  conditions  of the
Offer.  Each Stockholder  shall be entitled to receive the highest price paid by
Sub pursuant to the Offer, the Merger or otherwise.

                  2.2  Permission to Disclose. Each Stockholder hereby agrees to
permit  Parent and Sub to publish and disclose in any  documents  filed with any
Governmental  or  Regulatory  Authority  in  connection  with the  Offer and the
Merger,   including,   if  Company  Stockholders'  Approval  is  required  under
applicable law, the Proxy Statement (including all documents and schedules filed
with the SEC),  Stockholder's identity and ownership of Company Common Stock and
the nature of Stockholder's  commitments,  arrangements and understandings under
this Agreement.

         3.       Voting of Company Common Stock. Each Stockholder hereby agrees
that,  during the period  commencing on the date hereof and continuing until the
first  to  occur of the  Effective  Time or  termination  of this  Agreement  in
accordance  with  Section  7, at any  meeting of the  holders of Company  Common
Stock,  however called, or in connection with any written consent of the holders
of Company Common Stock,  such Stockholder shall vote (or cause to be voted) the
number of shares of Company Common Stock set forth  opposite such  Stockholder's
name on  Schedule 1 hereto  (the  "Existing  Shares")  and any shares of Company
Common Stock acquired by such  Stockholder  after the date hereof  (collectively
with the  Existing  Shares,  the  "Shares"):  (i) in favor  of the  Merger,  the
execution  and delivery by the Company of the Merger  Agreement and the approval
of the terms  thereof and each of the other actions  contemplated  by the Merger
Agreement and this Agreement and any actions required in furtherance thereof and
hereof;  (ii) against any action,  any failure to act, or  agreement  that would
result in a breach in any respect of any covenant, representation or warranty or
any other  obligation or agreement of the Company under the Merger  Agreement or
this Agreement; and (iii) except as otherwise agreed to in writing in advance by
Parent,   against  the  following   actions  (other  than  the  Merger  and  the
transactions  contemplated  by the  Merger  Agreement):  (A)  any  extraordinary
corporate  transaction,  such  as a  merger,  consolidation  or  other  business
combination  involving  the Company or its  Subsidiaries;  (B) a sale,  lease or
transfer of a material amount of assets of the Company or its Subsidiaries, or a
reorganization,  recapitalization,  dissolution or liquidation of the Company or
its Subsidiaries; (C) (1) any change in a majority of the persons who constitute
the  board  of  directors  of  the  Company;  (2)  any  change  in  the  present
capitalization of the Company or any of its Subsidiaries or any amendment of the
Company's  or any  Subsidiary's  Certificate  of  Incorporation  or  Bylaws  (or
comparable  organizational  documents);  (3) any  other  material  change in the
Company's or any Subsidiary's  corporate structure or business; or (4) any other

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action  involving the Company or its  Subsidiaries  which is intended,  or could
reasonably be expected, to impede, interfere with, delay, postpone, or adversely
affect the Merger and the  transactions  contemplated  by this Agreement and the
Merger  Agreement.  Each  Stockholder  agrees  that it shall not enter  into any
agreement or  understanding  with any person or entity the effect of which would
be to violate the provisions and agreements contained in this Section 3.

         4.       Other   Covenants,  Representations   and   Warranties.   Each
Stockholder  hereby  represents  and warrants  to Parent  with  respect to  such
Stockholder as follows:

                  4.1.  Ownership  of  Shares.  Stockholder  is  the  record  or
beneficial owner of the number of Shares set forth opposite  Stockholder's  name
on Schedule I hereto. On the date hereof, the Existing Shares set forth opposite
Stockholder's  name on Schedule I hereto  constitute  all of the Shares owned of
record and  beneficially by  Stockholder.  Stockholder has sole voting power and
sole power to issue  instructions  with respect to the matters set forth in this
Agreement  and the Proxy (as defined in Section  8), sole power of  disposition,
sole power of conversion,  sole power to demand  appraisal rights and sole power
to agree to all of the matters set forth in this  Agreement  and Proxy,  in each
case with respect to all of the Existing Shares set forth opposite Stockholder's
name on Schedule I hereto,  with no limitations,  qualifications or restrictions
on such  rights,  subject to  applicable  securities  laws and the terms of this
Agreement and the Proxy.

                  4.2  Power;  Binding  Agreement.  Stockholder  has  the  legal
capacity,  power and  authority  to enter into and perform all of  Stockholder's
obligations  under this  Agreement and the Proxy.  The  execution,  delivery and
performance  of this  Agreement  and the Proxy do not and will not  violate  any
other agreement to which Stockholder is a party including,  without  limitation,
any voting agreement, stockholders agreement or voting trust. This Agreement and
the Proxy have been duly and validly  executed and delivered by Stockholder  and
constitute  valid and binding  agreements of  Stockholder,  enforceable  against
Stockholder  in accordance  with their terms,  except as  enforceability  may be
limited by bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws  affecting the  enforcement of creditors'  rights  generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law). There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which Stockholder is trustee
whose consent is required for the execution and delivery of this Agreement,  the
Proxy or the  consummation by the Stockholder of the  transactions  contemplated
hereby and thereby.

                  4.3  No Conflicts.  Except for filings under the Exchange Act,
the HSR Act and any applicable  state  antitrust laws (i) no filing with, and no
permit, authorization,  consent or approval of, any state or federal public body
or  authority  or any  other  person  is  necessary  for the  execution  of this
Agreement and the Proxy by Stockholder  and the  consummation  by Stockholder of
the transactions  contemplated hereby and thereby and (ii) none of the execution
and delivery of this Agreement and the Proxy by Stockholder, the consummation by
Stockholder of the transactions contemplated hereby and thereby or compliance by
Stockholder with any of the provisions hereof or thereof shall (A) conflict with
or  result  in  any  breach  of  any  organizational   documents  applicable  to
Stockholder,  (B) result in a  violation  or breach of, or  constitute  (with or
without  notice or lapse of time or both) a  default  (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms,  conditions or provisions of any note,  bond,  mortgage,

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indenture, license, contract, commitment, arrangement,  understanding, agreement
or other instrument or obligation of any kind to which Stockholder is a party or
by which Stockholder or any of Stockholder's  properties or assets may be bound,
or (C) violate any order, writ, injunction,  decree,  judgment,  order, statute,
rule or regulation applicable to Stockholder or any of Stockholder's  properties
or assets.

                  4.4  No  Encumbrances.  Except pursuant to  this Agreement and
the Proxy,  Stockholder's Shares  and the certificates  representing such Shares
are now, and at all times  during the term hereof will be, held  by Stockholder,
or by a nominee or custodian for the benefit of  Stockholder,  free and clear of
all liens, hypothecations, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising  hereunder.  The transfer by
Stockholder of the Shares to Sub in the Offer shall pass to and  unconditionally
vest in Sub good and valid  title to the Shares so  transferred  by  Stockholder
free and clear of all claims, liens, restrictions,  security interests, pledges,
hypothecations, limitations and encumbrances whatsoever.

                  4.5  No Solicitation.  Until the earlier of the Effective Time
or termination of this Agreement in accordance  with its terms,  Stockholder (a)
shall not, in Stockholder's  capacity as such,  initiate,  solicit or encourage,
directly or  indirectly,  any inquiries or the making or  implementation  of any
proposal or offer (including,  without limitation,  any proposal or offer to the
stockholders  of the Company)  with respect to any  transaction  relating to the
Company or any of its Subsidiaries that constitutes an Alternative  Proposal, or
engage in any negotiations  concerning,  or provide any confidential information
or data to, or have any discussions  with, any Person relating to an Alternative
Proposal (excluding Parent and its affiliates and the transactions  contemplated
by the Merger Agreement),  or otherwise facilitate any effort or attempt to make
or implement an Alternative  Proposal;  (b) shall immediately cease and cause to
be terminated  any existing  activities,  discussions or  negotiations  with any
Person  with  respect to any of the  foregoing;  and (c) shall  promptly  inform
Parent  if any such  inquiry  or  proposal  or offer is  received  by,  any such
information  is requested  from, or any such  negotiations  or  discussions  are
sought to be initiated  or continued  with  Stockholder,  and will  identify the
party making such inquiry,  proposal, offer or request and, if an offer has been
received, will describe the material terms thereof.

                  4.6  Restriction  on  Conversion  and  Transfer,  Proxies  and
Non-Interference.  Beginning on the date hereof and ending on the earlier of the
Effective Time or termination  of this  Agreement,  except as required to comply
with the  provisions of this Agreement or the Proxy,  Stockholder  shall not (i)
directly or indirectly, convert into Class A Common Stock, offer for sale, sell,
transfer,  tender,  pledge,  encumber,  assign or otherwise dispose of, or enter
into any contract,  option or other arrangement or understanding with respect to
or consent to the conversion  into Class A Common Stock,  offer for sale,  sale,
transfer, tender, pledge,  encumbrance,  assignment or other disposition of, any
or all of Stockholder's  Shares or any interest therein;  (ii) grant any proxies
or powers of  attorney,  deposit any Shares into a voting  trust or enter into a
voting agreement with respect to any Shares; or (iii) take any action that would
make any  representation  or warranty of Stockholder  contained herein untrue or
incorrect  or have the  effect  of  preventing  or  disabling  Stockholder  from
performing Stockholder's obligations under this Agreement or the Proxy.

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                  4.7  Waiver of Appraisal Rights. Stockholder hereby waives any
rights  of appraisal  or rights to dissent  from the Merger that Stockholder may
have.

                  4.8  Reliance   by  Parent.   Stockholder   understands    and
acknowledges  that Parent is entering  into,  and causing Sub to enter into, the
Merger Agreement in reliance upon  Stockholder's  execution and delivery of this
Agreement and the Proxy.

                  4.9  Further  Assurances.  From  time  to  time,  at  Parent's
request and without further consideration, Stockholder shall execute and deliver
such  additional  documents  and take all such further  lawful  action as may be
reasonably   necessary  or  desirable  to  consummate  and  make  effective  the
transactions contemplated by this Agreement and the Proxy.

                  4.10  No  Finder's Fees; No  Payments to  Stockholders.  Other
than  existing  financial  advisory  and  investment  banking  arrangements  and
agreements entered into by the Company, no broker,  investment banker, financial
adviser  or other  person  is  entitled  to any  broker's,  finder's,  financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Stockholder.
Except as set forth on Schedule 4.10, there are no payments due or to become due
to the Stockholder or any of the  Stockholder's  Subsidiaries or affiliates from
the Company or any of its  Subsidiaries in connection with or as a result of the
consummation of the  transactions  contemplated by the Merger  Agreement or this
Agreement or otherwise.

         5.       Stop  Transfer; Changes  in  Shares.  Each Stockholder  agrees
with, and covenants  to, Parent that beginning on the date hereof and  ending on
the date of  termination of the Agreement,  such  Stockholder  shall not request
that the Company,  and the Company  hereby agrees with, and covenants to, Parent
that  beginning on the date hereof and ending on the date of termination of this
Agreement it will not,  register the transfer  (book-entry  or otherwise) of any
certificate or uncertificated  interest  representing any of such  Stockholder's
Shares,  unless such transfer is made in compliance with this Agreement.  In the
event of a dividend or  distribution,  or any change in the Company Common Stock
by reason of any dividend, split-up, recapitalization,  combination, exchange of
shares or the like,  the term  "Shares"  shall be deemed to refer to and include
the Shares as well as all such dividends and  distributions  and any shares into
which or for which any or all of the Shares may be changed or exchanged.

         6.       Conduct  as  a  Director.  Notwithstanding  anything  in  this
Agreement to the contrary,  the covenants and  agreements set forth herein shall
not prevent any of the Stockholders' designees serving on the Company's Board of
Directors from taking any action,  subject to the  applicable  provisions of the
Merger Agreement,  while acting in such designee's capacity as a director of the
Company;  provided that such action shall not in any manner affect Stockholder's
obligations under this Agreement or the Proxy.

         7.       Termination.   This   Agreement  shall   terminate,  and   the
transactions  contemplated  hereby shall be  abandoned,  automatically  upon the
termination of the Merger  Agreement in accordance  with its terms. In addition,
any  Stockholder  may terminate this Agreement at any time if the Effective Time
shall not have occurred on or prior to July 31, 2000.

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         8.       Irrevocable  Proxy.   Each   Stockholder  acknowledges   that,
concurrently with the execution of this Agreement,  Stockholder has executed and
delivered  to Parent an  Irrevocable  Proxy in the form  attached  as  Exhibit A
hereto (the "Proxy").

         9.       Miscellaneous.

                  9.1  Entire Agreement.  This  Agreement,  the  Proxy  and  the
Merger Agreement  constitute the entire agreement among the parties with respect
to the  subject  matter  hereof and  supersede  all other prior  agreements  and
understandings,  both written and oral, among any of the parties with respect to
the subject matter hereof.

                  9.2  Certain  Events.   Each  Stockholder   agrees  that  this
Agreement  and the Proxy and the  obligations  hereunder  and  thereunder  shall
attach to such  Stockholder's  Shares  and shall be  binding  upon any person or
entity to which legal or beneficial ownership of such Shares shall pass, whether
by  operation  of  law  or  otherwise,   including,   without  limitation,  such
Stockholder's heirs,  guardians,  administrators or successors.  Notwithstanding
any transfer of Shares,  the transferor  shall remain liable for the performance
of all obligations of the transferor under this Agreement.

                  9.3  Assignment.  This Agreement shall not be assigned without
the prior  written  consent of the other  parties  hereto and no rights,  or any
direct or indirect interest herein, shall be transferable  hereunder without the
prior written consent of the other parties hereto;  provided that Parent and Sub
may assign or transfer their rights hereunder to any wholly-owned  subsidiary of
Parent,  or any corporation  that owns all of the  outstanding  stock of Parent,
directly or indirectly,  which assignment shall not relieve Parent or Sub of any
of their respective obligations hereunder.

                  9.4      Amendments, Waivers, Etc.  This  Agreement may not be
 amended,  changed, supplemented,  waived or  otherwise modified  or terminated,
except  upon the  execution and delivery of  a written agreement executed by the
parties to be bound thereby.

                  9.5  Notices.  All notices, requests and other  communications
hereunder  must be in  writing  and will be deemed  to have  been duly  given if
delivered  personally or by facsimile  transmission or mail (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:

         If to Stockholders:             At the  addresses set forth on Schedule
                                         1 hereto

         with a copy to:                 Milbank, Tweed, Hadley & McCloy LLP
                                         1 Chase Manhattan Plaza
                                         New York, NY  10005
                                         Attention:  Lawrence Lederman, Esq. and
                                                     Robert S. Reder, Esq.
                                         Telephone:  (212) 530-5000
                                         Telecopy:   (212) 530-5219

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         If to the Company:              Carson, Inc.
                                         64 Ross Road
                                         Savannah, GA  31405
                                         Attention:  Malcolm R. Yesner
                                         Telephone:  (912) 651-3400
                                         Telecopy:   (912) 651-3424

         with a copy to:                 Milbank, Tweed, Hadley & McCloy LLP
                                         1 Chase Manhattan Plaza
                                         New York, NY  10005
                                         Attention:  Lawrence Lederman, Esq. and
                                                     Robert S. Reder, Esq.
                                         Telephone:  (212) 530-5000
                                         Telecopy:   (212) 530-5219

         If to Parent or Sub:            Cosmair, Inc.
                                         575 Fifth Avenue
                                         New York, NY  10017
                                         Attention:  John D. Sullivan
                                         Telephone:  (212) 984-4181
                                         Telecopy:   (212) 984-4946

         with a copy to:                 Weil, Gotshal & Manges LLP
                                         767 Fifth Avenue
                                         New York, NY  10153
                                         Attention:  Stephen E. Jacobs, Esq. and
                                                     Ellen J. Odoner, Esq.
                                         Telephone: (212) 310-8000
                                         Telecopy:  (212) 310-8007

or to such  other  address  as the  person  to whom  notice  is  given  may have
previously furnished to the others in writing in the manner set forth above.

                  9.6 Severability. Whenever possible, each provision or portion
of any  provision of this  Agreement and the Proxy will be  interpreted  in such
manner as to be effective and valid under applicable law but if any provision or
portion of any  provision of this  Agreement or the Proxy is held to be invalid,
illegal or  unenforceable in any respect under any applicable law or rule in any
jurisdiction,  such invalidity,  illegality or unenforceability  will not affect
any other provision or portion of any provision in such  jurisdiction,  and this
Agreement  and the  Proxy  will be  reformed,  construed  and  enforced  in such
jurisdiction as if such invalid,  illegal or unenforceable  provision or portion
of any provision had never been contained herein.

                  9.7  Specific  Performance.  The  parties  hereto  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  was not  performed  in  accordance  with its  specified  terms or was
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or  injunctions  to prevent  breaches of this  Agreement and to

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enforce  specifically the terms and provisions  hereof in any court of competent
jurisdiction,  this  being in  addition  to any other  remedy to which  they are
entitled at law or in equity.

                  9.8  Remedies  Cumulative.  All  rights,  powers and  remedies
provided  under this  Agreement or the Proxy or  otherwise  available in respect
hereof at law or in equity  shall be  cumulative  and not  alternative,  and the
exercise of any  thereof by any party shall not  preclude  the  simultaneous  or
later exercise of any other such right, power or remedy by such party.

                  9.9  No Waiver.  The failure  of any party  hereto to exercise
any  right,  power or  remedy  provided  under  this  Agreement  or the Proxy or
otherwise  available  in respect  hereof at law or in equity,  or to insist upon
compliance  by  any  other  party  hereto  with  its  obligations  hereunder  or
thereunder, and any custom or practice of the parties at variance with the terms
hereof or thereof,  shall not  constitute a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand such compliance.

                  9.10  No Third  Party  Beneficiaries.  This  Agreement is  not
intended to be for the benefit  of, and shall  not be enforceable by, any person
or entity who or which is not a party hereto.

                  9.11  Governing  Law.  This  Agreement and  the Proxy shall be
governed by and construed in  accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof.

                  9.12  Consent to Jurisdiction.  Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection  with,  this  Agreement  or the  transactions  contemplated  by  this
Agreement may be brought against any of the parties in any federal court located
in the State of Delaware or any Delaware  state  court,  and each of the parties
hereto hereby consents to the exclusive  jurisdiction of such courts (and of the
appropriate  appellate courts  therefrom) in any such suit, action or proceeding
and waives any objection to venue laid therein. Process in any such suit, action
or proceeding may be served on any party  anywhere in the world,  whether within
or  without  the State of  Delaware.  Without  limiting  the  generality  of the
foregoing,  each party hereto  agrees that service of process upon such party at
the address  referred to in Section 9.5,  together  with written  notice of such
service to such party,  shall be deemed  effective  service of process upon such
party.

                  9.13  Descriptive  Headings.  The  descriptive  headings  used
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.

                  9.14  Counterparts;   Effectiveness.  This  Agreement  may  be
executed in counterparts,  each of which shall be deemed to be an original,  but
all of which,  taken  together,  shall  constitute  one and the same  Agreement.
Notwithstanding  the foregoing,  this Agreement shall not be effective as to any
Stockholder until executed by all Stockholders.

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                  IN WITNESS  WHEREOF,  this  Agreement  has been signed by each
party hereto as of the date first above written.

                                    COSMAIR, INC.

                                    By:  /s/Roger Dolden
                                         Name:   Roger Dolden
                                         Title:  Executive Vice President,
                                                  Chief Administrative Officer

                                    CRAYON ACQUISITION CORP.

                                    By:  /s/Roger Dolden

                                         Name:  Roger Dolden
                                         Title: Executive Vice President,
                                                  Chief Administrative Officer

                                    CARSON, INC.

                                    By:  /s/Malcolm R. Yesner
                                         Name:  Malcolm R. Yesner
v                                        Title:  Chief Executive Officer

                                    DNL PARTNERS LIMITED PARTNERSHIP
                                    By:  DNL Group, L.L.C.
                                         General Partner

                                    By:  /s/Vincent A. Wasik
                                         Name:  Vincent A. Wasik
                                         Title:  Manager

                                    /s/Lawrence E. Bathgate, II
                                             Lawrence E. Bathgate, II

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                                    /s/Abbey J. Butler
                                             Abbey J. Butler

                                    /s/Melvyn J. Estrin
                                             Melvyn J. Estrin

                                    /s/James L. Hudson
                                             James L. Hudson

                                    /s/Leroy Keith
                                             Leroy Keith

                                    /s/Jack Kemp
                                             Jack Kemp

                                    /s/Suzanne de Passe
                                             Suzanne de Passe

                                    /s/John L. Sabre
                                             John L. Sabre

                                    /s/Vincent A. Wasik
                                             Vincent A. Wasik

                                    /s/Malcolm R. Yesner
                                             Malcolm R. Yesner

                                    /s/S. Garrett Stonehouse
                                             S. Garrett Stonehouse

                                    /s/Robert W. Pierce
                                             Robert W. Pierce

                                    /s/Arthur Gnann
                                             Arthur Gnann

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                                    /s/Julia E. Hudson
                                             Julia E. Hudson

                                    /s/Joyce Roche
                                             Joyce Roche

                                    NORTHWEST CAPITAL INC.

                                    By:  /s/Bradford N. Creswell
                                         Name:  Bradford N. Creswell
                                         Title: President

                                    MORGAN GUARANTY TRUST
                                    COMPANY OF NEW YORK,
                                    as trustee and in other fiduciary capacities

                                    By:  /s/ Joan L. Huggins-
                                         Name:  Joan L. Huggins
                                         Title: Vice President

                                    M&A INVESTMENTS, INC.

                                    By:  /s/Abbey J. Butler-
                                         Name:  Abbey J. Butler
                                         Title:

                                    NII HEALTH CARE CORPORATION

                                    By:  /s/Abbey J. Butler
                                         Name:  Abbey J. Butler
                                         Title:

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                                    C.B. EQUITIES CAPITAL CORP. LLC

                                    By:  /s/Abbey J. Butler
                                         Name:  Abbey J. Butler
                                         Title: Portfolio Manager

                                    OXFORD CAPITAL MANAGEMENT LLC

                                    By:  /s/Abbey J. Butler
                                         Name:  Abbey J. Butler
                                         Title: Portfolio Manager

                                    C.B. EQUITIES RETIREMENT TRUST

                                    By:  /s/Abbey J. Butler
                                         Name:   Abbey J. Butler
                                         Title:  Portfolio Manager

                                       12

<PAGE>

                                                                      Schedule I

--------------------------------------- ------------------- --------------------
                                         Existing Class A     Existing Class C
                    Name                     Shares (a)            Shares
                    ----                     ------                ------

--------------------------------------- ------------------- --------------------
DNL Partners Limited Partnership                    0                3,015,463
--------------------------------------- ------------------- --------------------
Lawrence E. Bathgate, II                       32,835 (b)                    0
--------------------------------------- ------------------- --------------------
Abbey J. Butler                               143,335 (c)               11,540
--------------------------------------- ------------------- --------------------
Melvyn J. Estrin                               26,335 (d)               11,540
--------------------------------------- ------------------- --------------------
James L. Hudson                                36,135 (e)                    0
--------------------------------------- ------------------- --------------------
Leroy Keith                                    23,500 (f)              341,100
--------------------------------------- ------------------- --------------------
Jack Kemp                                      26,335 (g)               46,139
--------------------------------------- ------------------- --------------------
Suzanne de Passe                               22,835 (h)               11,540
--------------------------------------- ------------------- --------------------
John L. Sabre                                  38,336 (i)               23,069
--------------------------------------- ------------------- --------------------
Vincent A. Wasik                               52,170 (j)                    0
--------------------------------------- ------------------- --------------------
Malcolm R. Yesner                             149,467                        0
--------------------------------------- ------------------- --------------------
S. Garrett Stonehouse                               0                  159,180
--------------------------------------- ------------------- --------------------
Robert W. Pierce                               18,000                        0
--------------------------------------- ------------------- --------------------
Arthur Gnann                                        0                   29,677
--------------------------------------- ------------------- --------------------
Julia E. Hudson                                     0                   11,540
--------------------------------------- ------------------- --------------------
Joyce Roche                                         0                  118,713
--------------------------------------- ------------------- --------------------
Northwest Capital Inc.                              0                  159,180
--------------------------------------- ------------------- --------------------
Morgan Guaranty Trust Company
of New York                                         0                1,187,482
--------------------------------------- ------------------- --------------------
M&A Investments, Inc.                       1,359,690                        0
--------------------------------------- ------------------- --------------------
NII Health Care Corporation                   372,000                        0
--------------------------------------- =================== ====================
C.B. Equities Capital Corp. LLC               262,500                        0
--------------------------------------- =================== ====================
Oxford Capital Management LLC                 212,500                        0
--------------------------------------- =================== ====================
C.B. Equities Retirement Trust                100,000                        0
--------------------------------------- =================== ====================
         TOTAL                              2,875,973                5,126,163
--------------------------------------- ------------------- --------------------

(a)      The Directors have received restricted share grants in each of the last
         three years which vest one-third each year on the  anniversary  date of
         the grant. Vested shares may be voted and transferred;  unvested shares
         may be voted but may not be transferred;  all unvested shares will vest
         when the Director  leaves  office in connection  with the  transactions
         contemplated by this Agreement. The notes below set forth the number of
         vested  Class A  Shares  held  by  each  Director;  the  remainder  are
         unvested.
(b)      6,849 vested.
(c)      109,182 vested.
(d)      5,182 vested.
(e)      29,982 vested.
(f)      5,000 vested.
(g)      5,182 vested.
(h)      5,182 vested.

                                       13

<PAGE>

(i)      9,182 vested.
(j)      22,619 vested.

                  For purposes of Section 9.5, the address for each  Stockholder
is as follows:

                           DNL Partners Limited Partnership
                           c/o MCG Global, LLC
                           One Morningside Drive North
                           Suite 200
                           Westport, CT  06880

                           Lawrence E. Bathgate, II
                           c/o Bathgate, Wegener & Wolf
                           One Airport Road
                           Lakewood, NJ  08701

                           Abbey J. Butler
                           207 Dune Road
                           Box 137
                           Westhampton Beach, NY  11978

                           Melvyn J. Estrin
                           7200 Wisconsin Avenue
                           Suite 600
                           Bethesda, MD  20814

                           James L. Hudson
                           2200 20th Street
                           Washington, DC  20009

                           Leroy Keith
                           64 Ross Road
                           Savannah, GA  31405

                           Jack Kemp
                           Empower America
                           1776 I Street N.W.
                           Washington, DC  20006

                           Suzanne de Passe
                           de Passe Entertainment
                           5750 Wilshire Boulevard
                           Suite 640
                           Los Angeles, CA  90036

                                       14

<PAGE>

                           John L. Sabre
                           1060 First Avenue
                           New York, NY  10128

                           Vincent A. Wasik
                           c/o MCG Global, LLC
                           One Morningside Drive North
                           Suite 200
                           Westport, CT  06880

                           Malcolm R. Yesner
                           64 Ross Road
                           Savannah, GA  31405

                           S. Garrett Stonehouse
                           MCG Global, LLC
                           One Morningside Drive North
                           Suite 200
                           Westport, CT  06880

                           Robert W. Pierce
                           64 Ross Road
                           Savannah, GA  31405

                           Arthur Gnann
                           10 Sherborne Road
                           Savannah, GA   31419

                           Julia E. Hudson
                           622 G Street S.W.
                           Washington, DC  20024

                           Joyce Roche
                           2 Flowing Wells Lane
                           Savannah, GA  31411

                           Northwest Capital Inc.
                           1201 3rd Avenue
                           Suite 2765
                           Seattle, WA  98101

                           Morgan Guaranty Trust Company of New York
                           522 Fifth Avenue
                           New York, NY  10036

                                       15

<PAGE>

                           M&A Investments, Inc.
                           5910 North Central Expressway
                           Suite 1780
                           Dallas, TX  75206

                           NII Health Care Corporation
                           5910 North Central Expressway
                           Suite 1780
                           Dallas, TX  75206

                           C.B. Equities Capital Corp. LLC
                           Oxford Capital Management LLC
                           C.B. Equities Retirement Trust
                           c/o Abbey J. Butler, Portfolio Manager
                           207 Dune Road
                           Box 137
                           Westhampton Beach, NY  11978

                                       16

<PAGE>
                                                                   Schedule 4.10

1.       Subscription  and  Registration  Rights Agreement among the Company and
         each of Joyce  Roche and Arthur P.  Gnann III,  each dated as of August
         15, 1996,  which  relate to the stock  securing  the  Promissory  Notes
         described in Section 4.11(b) of this Company Disclosure Letter.

2.       The Promissory Notes of Joyce Roche and Arthur P. Gnann III, payable to
         the Company, each dated as of August 15, 1996.  See  Section 4.11(b) of
         this Company Disclosure Letter.

3.       1996 Non-Employee  Directors  Equity Incentive  Program, as amended and
         restated November 20, 1998.

4.       1996 Long-Term Incentive Plan.

5.       Amended and Restated Employment Agreement by and among the Company  and
         Malcolm Yesner, dated as of November 1, 1999.

6.       Noncompetition Agreement by and between the Company and Malcolm Yesner,
         dated November 1, 1999.

7.       Employment   Agreement  by  and  between  the  Company's   wholly-owned
         subsidiary,  Carson  Products  Company  ("CPC"),  and Robert W. Pierce,
         dated as of May 9, 1997, as amended March 18, 1999.

8.       Settlement  Agreement  by  and between  CPC, AM Cosmetics  Corp. and AM
         Products Company, dated as of February 25, 2000.

9.       Separation  Agreement and General  Release by and among  Joyce M. Roche
         and  CPC, dated as  of September 16, 1998.  The  Company  is  currently
         making severance payments to be completed by March 31, 2000.

10.      CPC Retirement Plan with Diversified  Investment Advisors, effective as
         of October 31, 1955, with amendments.

11.      Diversified Investment Advisors  Pension Services Agreement for Johnson
         Products Co., Inc., Account No.: QK61442, effective  as of September 1,
         1998.

12.      Carson Group Health  Benefit  Plan with USI  Administrators,  effective
         January 1, 2000, includes  Administrative Services Contract with Jones,
         Hill  &  Mercer  and  a  Utilization  Review  Services  Agreement  with
         Intracorp.

13.      Carson Group Health Plan- Eye  Care Plan of  America, Group No.: CARPC,
         effective as of March 11, 1998.

                                       17

<PAGE>

14.      Cigna Healthcare  Group Services Agreements, effective as of October 1
         1999.:

         o     Cigna HealthCare Group of Florida, Inc. Agreement No. J012-01 and
               JX10-01

         o     Cigna HealthCare Group of Georgia, Inc. Agreement No. 1112-01 and
               2070-01

         o     Cigna HealthCare Group  of Illinois, Inc.  Agreement  No. 0903-01
               and H371-01

         o     Cigna HealthCare  Mid-Atlantic,  Inc.  Agreement No. BB10-01  and
               H373-01

         o     Cigna HealthCare Group of New Jersey, Inc.  Agreement No. 1582-20
               and 6449-20

         o     Cigna HealthCare Group of  New York, Inc.  Agreement No.  1582-60
               and 6449-60

         o     Cigna HealthCare Group of  St. Louis, Inc. Agreement  No. 1449-01
               and 6197-01

         o     Cigna HealthCare Group of Tennessee, Inc.  Agreement No. 1730 and
               6083-01

15.      Johnson  Group  Health  Plan- Prudential  Dental Plan  Contract,  Group
         Contract No.: G-77691, effective as of September 1, 1998.

16.      Flexible Benefit Plan, effective as of April 1, 1997.

17.      Stop Loss (Excessive  Loss Coverage) Agreement with  Elite Underwriters
         Agency, effective January 1, 2000.

18.      Savannah Business  Group Membership Agreement, effective  as of January
         1985.

19.      Colonial  Cancer &  Accident  Plans (Supplemental  Benefits), effective
         January 1, 2000.

20.      Supplemental  Cigna Accident Policy, No. OK817053, effective January 1,
         1998.

21.      Cigna  Group Insurance  Group Universal  Life Insurance (Supplemental),
         Employer No. 2403220.

22.      The  Standard Insurance  Company, basic  life  insurance  policies  and
         short/long term disability (for Carson and Johnson).

23.      Atlantic Mutual Workers' Compensation Insurance.

24.      A. Gnann is being  provided post-retirement health  care benefits.  See
         Item 32 of Section 4.13(a) of this Company Disclosure Letter.

25.      Rights of Indemnification and Insurance pursuant to Section 7.06 of the
         Merger Agreement.

26.      Payment  for Company  Common  Stock pursuant to Section  3.01(c) of the
         Merger Agreement.

                                       18

<PAGE>

27.      Payment  for Company Stock  Options pursuant  to Section 3.01(e) of the
         Merger Agreement.

28.      Reimbursement  to Vincent  Wasik  for $25,000 in  legal  fees  paid  to
         Skadden, Arps, Slate, Meagher & Flom LLP.

29.      Management Assistance Agreement between Carson Products Company and MCG
         Global,  LLC,  dated  September 1, 1999. No payments will be made under
         the  Management  Assistance  Agreement  between the date hereof and the
         Control Date,  except for the accrued monthly fees and reimbursement of
         expenses,  which  reimbursement  of expenses is not  expected to exceed
         $50,000.

30.      Letter of Credit  Reimbursement Agreement  from the Company to Lawrence
         E.  Bathgate, II,  Abbey J.  Butler, Melvyn  J. Estrin, John  L. Sabre,
         Vincent  A.  Wasik and Malcolm  R. Yesner, dated  February 25, 2000, as
         agreed and accepted by DNL Partners Partnership Limited.

                                       19

<PAGE>

                                    EXHIBIT A

                            TO STOCKHOLDERS AGREEMENT

                                IRREVOCABLE PROXY

                  The  undersigned  stockholder  of  Carson,  Inc.,  a  Delaware
corporation (the "Company"),  hereby irrevocably (to the fullest extent provided
by law, but subject to automatic  termination  and revocation as provided below)
appoints Crayon Acquisition Corp., a Delaware  corporation ("Sub"), the attorney
and proxy of the  undersigned,  with full  power of  undersigned's  rights  with
respect to the shares of capital stock of the Company owned  beneficially  or of
record by the  undersigned,  which  shares  are listed on the final page of this
Proxy,  and any and all other  shares or  securities  of the  Company  issued or
issuable with respect  thereof or otherwise  acquired by stockholder on or after
the date  hereof,  until the  termination  date  specified  in the  Stockholders
Agreement referred to below (the "Shares"). Upon the execution hereof, all prior
proxies given by the  undersigned  with respect to the Shares are hereby revoked
and no subsequent  proxies will be given as to the matters  covered hereby prior
to the date of  termination  of the  Stockholders  Agreement  (the  "Termination
Date").  This proxy is irrevocable  (to the fullest extent  provided by law, but
subject to automatic termination and revocation as provided below), coupled with
an interest, and is granted in connection with the Stockholders Agreement, dated
as  of  February  __,  2000,  among  the  Company,  Cosmair,  Inc.,  a  Delaware
corporation  ("Parent"),  Sub and the Stockholders party thereto,  including the
undersigned  stockholder (the  "Stockholders  Agreement";  capitalized terms not
otherwise defined herein being used herein as therein  defined),  and is granted
in consideration  of Parent and Sub entering into the Merger Agreement  referred
to therein.

                  The  attorney  and proxy named above will be  empowered at any
time prior to the Termination  Date to exercise all voting and other rights with
respect to the Shares (including,  without limitation,  the power to execute and
deliver written consents with respect to the Shares) of the undersigned at every
annual, special or adjourned meeting of stockholders of the Company and in every
written  consent in lieu of such a meeting,  or  otherwise:  (i) in favor of the
Merger,  the execution  and delivery by the Company of the Merger  Agreement and
the approval of the terms thereof and each of the other actions  contemplated by
the Merger Agreement and the Stockholders  Agreement and any actions required in
furtherance  thereof;  (ii) against any action, any failure to act, or agreement
that would result in a breach in any respect of any covenant,  representation or
warranty or any other  obligation  or agreement of the Company  under the Merger
Agreement or the Stockholders Agreement; and (iii) except as otherwise agreed to
in writing in advance by Parent,  against the following  actions (other than the
Merger  and the  transactions  contemplated  by the Merger  Agreement):  (A) any
extraordinary  corporate transaction,  such as a merger,  consolidation or other
business  combination  involving  the Company or its  Subsidiaries;  (B) a sale,
lease  or  transfer  of a  material  amount  of  assets  of the  Company  or its
Subsidiaries, or a reorganization,  recapitalization, dissolution or liquidation
of the  Company or its  Subsidiaries;  (C) (1) any  change in a majority  of the
persons who constitute the board of directors of the Company;  (2) any change in
the  present  capitalization  of the Company or any of its  Subsidiaries  or any

                                       20

<PAGE>

amendment of the Company's or any  Subsidiary's  Certificate of Incorporation or
Bylaws (or comparable organizational  documents);  (3) any other material change
in the Company's or any Subsidiary's corporate structure or business; or (4) any
other action  involving the Company or its  Subsidiaries  which is intended,  or
could reasonably be expected,  to impede,  interfere with, delay,  postpone,  or
adversely affect the Merger and the transactions  contemplated by this Agreement
and the Merger Agreement.

                  The  attorney  and proxy  named above may only  exercise  this
proxy to vote  the  Shares  subject  hereto  in  accordance  with the  preceding
paragraph,  and may not exercise this proxy in respect of any other matter.  The
undersigned  stockholder  may vote the Shares  (or grant one or more  proxies to
vote the Shares) on all other matters.

                  Any obligation of the  undersigned  hereunder shall be binding
upon the successors and assigns of the undersigned.

                  This proxy is irrevocable,  but shall automatically  terminate
and be  revoked  and  be of no  further  force  and  effect  on  and  after  the
Termination Date.

Dated:  February __, 2000                   [STOCKHOLDER]

                                                     By: _____________________
                                                         Name:
                                                         Title:

Shares Owned: __________________

                                       21SETTLEMENT AGREEMENT

         SETTLEMENT AGREEMENT (the "Settlement Agreement"), dated as of February
25, 2000,  between AM Products  Company,  formerly  known as AM Cosmetics,  Inc.
("AM"),  a corporation  duly organized and existing  pursuant to the laws of the
State  of  Delaware  with  its  principal  place of  business  located  in North
Arlington,  New Jersey,  AM Cosmetics  Corp.,  formerly known as PAM Acquisition
Corp. ("AM  Cosmetics"),  a corporation duly organized and existing  pursuant to
the laws of the State of Delaware with its principal  place of business in North
Arlington,  New Jersey,  and Carson Products Company  ("Carson"),  a corporation
duly  organized and existing  pursuant to the laws of the State of Delaware with
its principal place of business located in Savannah, Georgia.

         WHEREAS, AM commenced an  arbitration proceeding  against Carson before
the  American  Arbitration Association, entitled  AM  Cosmetics, Inc. v.  Carson
Products Company, Case No. 13-181-01123-98 (the "Arbitration"); and

         WHEREAS, Carson commenced a lawsuit against AM in the Superior Court of
Fulton County, State  of Georgia, entitled  Carson Products  Company, a Delaware
Corporation  v. AM  Cosmetics,  Inc., a  Delaware  Corporation, Civil Action No.
1999CV08276 (the "Lawsuit"); and

         WHEREAS, Carson  filed a  Verified  Complaint  for Declaratory Judgment
against AM  Cosmetics  and AM in the  Superior Court of the State of New Jersey,
Chancery Division, for Bergen  County on or about May 13, 1999, entitled  Carson
Products Company v. AM Cosmetics Corp. and AM Products Company, (the "New Jersey
Action"); and

<PAGE>

         WHEREAS,  AM, AM  Cosmetics  and  Carson  have now agreed to settle and
resolve all disputes,  claims and counterclaims of any kind whatsoever  asserted
by each of them in, or  otherwise  arising out of, the  Lawsuit,  the New Jersey
Action and the Arbitration;

         NOW, THEREFORE, the parties hereby agree as follows:

     1.  Carson  shall pay  to AM, by wire  transfer,  the sum  of  two  million
dollars  ($2,000,000.00) as follows: (a) one million dollars  ($1,000,000.00) on
or before  February 25, 2000, and (b) one million dollars  ($1,000,000.00)  (the
"Second  Payment")  on or before the Second  Payment  Date (as  defined  below).
"Second  Payment  Date" means the earlier of July 31, 2000 or the closing of the
merger (the "Merger") whereby Crayon  Acquisition Corp.  ("Sub"), a wholly-owned
subsidiary of Cosmair, Inc. ("Parent"), will merge with and into Carson's parent
corporation,  Carson, Inc. ("CIC"),  pursuant to an Agreement and Plan of Merger
dated as of February  25,  2000 by and among  Parent,  Sub and CIC (the  "Merger
Agreement").

     2.  Concurrently  with  the  execution  and  delivery  of  this  Settlement
Agreement,  as a condition  to the  performance  by AM and AM Cosmetics of their
obligations  hereunder,  six directors of CIC have caused GrandBank (the "Bank")
to issue an irrevocable  letter of credit for the benefit of AM, a copy of which
is  attached  hereto as Annex A (the  "Letter  of  Credit"),  providing  for the
payment by the Bank of up to $690,000 to AM upon  presentation  of the documents
described  in the Letter of Credit to the Bank no sooner  than March 31, 2000 in
the event that,  as of March 31, 2000 at 5:00 P.M., AM has not received full and
final  payment of the $2 million  settlement  amount  described  in  paragraph 1
hereinabove. In that event, AM shall be entitled to demand payment from the Bank
under the Letter of Credit for any and all portion(s) of such $2 million owed to
AM by Carson  that AM has not  received  as of March 31, 2000 at 5:00 P.M. up to

                                       2

<PAGE>

the maximum amount of $690,000. Nothing contained herein is intended to limit or
affect,  nor should it be construed to limit or affect,  the  provisions  of the
Letter of Credit.

     3.  Carson is  presently the owner of 358.679399 shares of Payment In  Kind
Preferred  Shares (the  "Preferred  Shares") of AM Cosmetics.  Carson  purchased
certain  preferred  shares  pursuant  to  an  agreement  entitled  "Subscription
Agreement  dated as of June 26,  1996 by and among  MORNINGSIDE  AM  ACQUISITION
CORP.  and CARSON  PRODUCTS  COMPANY  with  respect to the shares of the capital
stock of MORNINGSIDE AM ACQUISITION CORP." ("Subscription Agreement"), and on or
about June 27, 1997, exchanged such shares for the Preferred Shares issued by AM
Cosmetics.  Pursuant to this  Settlement  Agreement,  on or before  February 25,
2000,  Carson  shall  deliver and  surrender to AM  Cosmetics  for  cancellation
(without  further payment of any  consideration by AM Cosmetics or AM to Carson)
stock  certificates  evidencing its ownership of certain of the Preferred Shares
together  with a stock  transfer  form duly  executed in blank,  together with a
Certificate and Agreement  Covering Lost Stock  Certificates with respect to the
remainder of its Preferred Shares in form and substance reasonably  satisfactory
to AM with respect to any  certificates for the Preferred Shares which cannot be
located by Carson. Carson agrees to waive and relinquish,  and hereby does waive
and relinquish, any and all of its rights and remedies with respect to and/or in
connection  with the  Preferred  Shares,  whether set forth in the  Subscription
Agreement, under the Certificate of Incorporation of AM Cosmetics or otherwise.

     4. AM  shall  transfer to  Carson all of the "Cutex" brand products in AM's
custody or possession as of the date of this  Settlement  Agreement  that are in
containers that bear "Cutex"  trademarks or trade names (the "Cutex  products").
In exchange, Carson shall pay to AM, on or before March 2, 2000, by certified or

                                       3

<PAGE>

bank check or by wire transfer,  the sum of one dollar ($1.00).  Delivery of all
the Cutex products shall be effective upon Carson or its carrier picking up said
products at AM's warehouse at 4014 First Avenue, Brooklyn, New York 11232 ("AM's
warehouse"), during normal business hours, and the risk of loss of said products
shall be borne by AM until  such  delivery.  Carson  shall bear the risk of loss
upon  delivery of the aforesaid  inventory  and products to the carrier.  Carson
agrees to cause the Cutex products to be picked up by March 2, 2000, after which
AM's  obligation  to transfer  said  products to Carson,  and Carson's  right to
delivery of, possession of and/or title to the Cutex products,  shall terminate.
Carson  acknowledges  and agrees that the Cutex  products  that AM  transfers to
Carson pursuant to this Settlement  Agreement  represents and constitutes all of
the Cutex products in AM's possession.

     5.  AM  shall transfer to Carson all of the "Dark & Lovely" brand  products
in AM's custody or possession as of the date of this  Settlement  Agreement that
are in containers that bear "Dark & Lovely" trademarks or trade names (the "Dark
& Lovely products").  In exchange, Carson shall pay to AM, on or before March 2,
2000,  by  certified  or bank check or by wire  transfer,  the sum of one dollar
($1.00).  Delivery of all the Dark & Lovely  products  shall be  effective  upon
Carson or its carrier  picking up said products at AM's warehouse  during normal
business hours, and the risk of loss of said products shall be borne by AM until
such delivery. Carson shall bear the risk of loss upon delivery of the aforesaid
inventory and products to the carrier.  Carson agrees to cause the Dark & Lovely
products to be picked up March 2, 2000,  after which AM's obligation to transfer
the Dark & Lovely  products  to  Carson,  and  Carson's  right to  delivery  of,
possession  of  and/or  title to the Dark & Lovely  products,  shall  terminate.
Carson acknowledges and agrees that the Dark & Lovely products that AM transfers
to Carson pursuant to this Settlement  Agreement  represents and constitutes all
of the Dark & Lovely products in AM's possession.

                                       4

<PAGE>

     6.  AM shall bear no responsibility for any costs relating to, arising from
or associated with returns by customers of any of the Cutex products or the Dark
& Lovely products after  February  25,  2000,  including,   without  limitation,
reimbursement  to said customers for returned  Cutex or Dark & Lovely  products.
Although Carson bears  responsibility for all costs relating to, arising from or
associated  with returns by customers of any of the Cutex products or the Dark &
Lovely  products  prior to February 25,  2000,  including,  without  limitation,
reimbursement to said customers for returned Cutex or Dark & Lovely products, AM
shall not seek  reimbursement  from  Carson for any such costs  arising  from or
associated  with returns of the Cutex  products or Dark & Lovely  products  that
occurred prior to February 25, 2000.

     7.  Simultaneously with the exchange between the parties of executed copies
of this Settlement Agreement, the parties shall, in addition, execute,  or cause
their respective counsel to execute, and exchange the following documents: (i) a
Consent Order of Dismissal With Prejudice,  a copy of which is annexed hereto as
Exh. A, terminating the Lawsuit with prejudice;  (ii) a Stipulation of Dismissal
With  Prejudice,  a copy of which is annexed hereto as Exh. B,  terminating  the
Arbitration  with  prejudice;   (iii)  a  Notice  of  Voluntary  Dismissal  With
Prejudice,  a copy of which is annexed  hereto as Exh.  C,  terminating  the New
Jersey Action with  prejudice;  and (iv)  Releases,  copies of which are annexed
collectively hereto as Exh. D (the "Releases").

     8.  Simultaneously  with or  immediately following the exchange between the
parties of executed copies of this Settlement Agreement, AM's attorneys, Baker &
McKenzie,  805 Third Avenue, New York, New York 10022 will cause to be filed the
Consent  Order  of  Dismissal  With  Prejudice,  terminating  the  Lawsuit  with
prejudice;  the  Stipulation  of  Dismissal  With  Prejudice,   terminating  the
Arbitration  with  prejudice;   and  the  Notice  of  Voluntary  Dismissal  With
Prejudice, terminating the New Jersey Action with prejudice, copies of which are

                                       5

<PAGE>

annexed  hereto  as  Exhs.  A,  B  and  C,   respectively   (collectively,   the
"Stipulations of Dismissal"), in the appropriate fora.

     9.  The  following agreements  between AM  and/or AM  Cosmetics, on the one
hand, and Carson,  on the other,  are hereby  cancelled and terminated as of the
date of this  Settlement  Agreement  (to the  extent  that  any of them  has not
already been  terminated  prior thereto):  (i) Management  Agreement dated as of
June 26,  1996,  as amended,  a copy of which is annexed  hereto as Exh. E, (ii)
Manufacturing  Agreement  dated as of April 30, 1997, a copy of which is annexed
hereto as Exh. F, (iii) Broker  Agreement dated as of September 19, 1997, a copy
of which is annexed as Exh. G, (iv) Subscription  Agreement,  a copy of which is
annexed  hereto as Exh. H, and (v)  Commission  Agreement  dated as of August 1,
1996, a copy of which is annexed hereto as Exh. I, and (vi) any and all other or
further  agreements  (excluding this Settlement  Agreement)  between Carson, CIC
and/or any of their parents, subsidiaries,  affiliates, divisions, joint venture
partners, predecessors,  successors, assignees or grantees, on the one hand, and
AM,  AM  Cosmetics  and/or  any  of  their  parents,  subsidiaries,  affiliates,
divisions,  joint  venture  partners,  predecessors,  successors,  assignees  or
grantees, on the other.

     10.  Carson  represents  and warrants to AM and AM Cosmetics  that: (a) (i)
Carson  is a corporation duly  organized, validly  existing and in good standing
under the laws of the State of Delaware and  has all requisite  corporate  power
and  authority  to enter into this  Settlement  Agreement  and the Release to be
issued by Carson to AM (the "Carson  Release") and to carry out its  obligations
hereunder and  thereunder,  (ii) the  execution and delivery of this  Settlement
Agreement and the Carson Release by Carson and the consummation by Carson of the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary  corporate action on the part of Carson and CIC and no other corporate
proceedings  on the  part of  Carson  or CIC are  necessary  to  authorize  this

                                       6

<PAGE>

Settlement   Agreement  or  the  Carson  Release  or  any  of  the  transactions
contemplated  hereby or thereby and (iii) each of this Settlement  Agreement and
the  Carson  Release  has  been  duly  executed  and  delivered  by  Carson  and
constitutes a legal, valid and binding obligation of Carson, enforceable against
Carson in  accordance  with its terms,  except as may be  limited by  applicable
bankruptcy,  insolvency, fraudulent conveyance,  reorganization,  moratorium and
similar laws relating to or affecting  creditors' rights and remedies generally,
and  except as the  enforceability  thereof is  subject  to the  application  of
general principles of equity  (regardless of whether  enforcement is sought in a
proceeding at law or in equity).

                  (b)  Neither the  execution  and  delivery of this  Settlement
Agreement  or  the  Carson  Release  by  Carson  nor  the  consummation  of  the
transactions  contemplated  hereby or thereby will: (i) conflict with or violate
any provision of the certificate of  incorporation  or bylaws of Carson,  CIC or
any of their respective subsidiaries, (ii) conflict with or violate any statute,
law, rule, regulation, order, writ, injunction, judgment or decree applicable to
Carson,  CIC or any of their respective  subsidiaries or any of their respective
assets  or  (iii)  conflict  with or  result  in any  violation  or  breach  of,
constitute  a default  (or an event  that  with  notice or lapse of time or both
would  become a  default)  under,  result in or give to any  person any right of
payment or reimbursement (other than reimbursement  arrangements entered into in
connection   with  the   issuance  of  the  Letter  of   Credit),   termination,
cancellation,  modification or acceleration of, or result in the creation of any
lien  pursuant to, any note,  bond,  mortgage,  security  agreement,  indenture,
contract,  agreement or other  instrument or obligation to which Carson,  CIC or
any of  their  respective  subsidiaries  is a party  or by  which  any of  their
respective assets is bound.

                                       7

<PAGE>

                  (c)  Except for the  filings  expressly  contemplated  by this
Settlement  Agreement,  no  notice,  declaration,  report  or  other  filing  or
registration  with, and no waiver,  consent,  approval or authorization  of, any
governmental or regulatory  authority or  instrumentality or any other public or
private third party,  including any  stockholder or creditor,  is required to be
given, made or obtained by Carson,  CIC or any of their respective  subsidiaries
in connection  with the execution,  delivery or  performance of this  Settlement
Agreement or the Carson Release.

                  (d)  Pursuant  to the  Merger  Agreement  and  the  applicable
provisions  of the General  Corporation  Law of the State of Delaware,  upon the
consummation of the Merger,  Sub will be merged with and into CIC, the corporate
existence of CIC and Carson will  continue and Carson's  obligations  under this
Settlement  Agreement,  the Carson  Release and the  Confession  of Judgment (as
defined below in paragraph 16) will not be limited or otherwise  affected by the
Merger.

     11.  AM and AM Cosmetics each represents  and warrants to Carson that:  (a)
(i)each of AM and AM Cosmetics is a corporation duly organized, validly existing
and in good  standing  under  the  laws of the  State  of  Delaware  and has all
requisite corporate power and authority to enter into this Settlement  Agreement
and the Release to be issued by AM to Carson (the "AM Release") and to carry out
its  obligations  hereunder and  thereunder,  (ii) the execution and delivery of
this Settlement  Agreement and the AM Release and the  consummation by AM and AM
Cosmetics  of the  transactions  contemplated  hereby and thereby have been duly
authorized by all necessary  corporate action on the part of AM and AM Cosmetics
and no  other  corporate  proceedings  on the  part of AM and AM  Cosmetics  are
necessary to authorize this Settlement Agreement or the AM Release or any of the
transactions  contemplated  hereby or thereby and (iii) each of this  Settlement

                                       8

<PAGE>

Agreement  and the AM Release has been duly executed and delivered by each of AM
and AM Cosmetics and constitutes a legal, valid and binding obligation of AM and
AM Cosmetics,  enforceable  against AM and AM Cosmetics in accordance with their
terms, except as may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating to or affecting
creditors'  rights and  remedies  generally,  and  except as the  enforceability
thereof  is  subject  to  the  application  of  general   principles  of  equity
(regardless  of  whether  enforcement  is  sought in a  proceeding  at law or in
equity).

                  (b)  Neither the  execution  and  delivery of this  Settlement
Agreement or the AM Release by AM or AM Cosmetics  nor the  consummation  of the
transactions  contemplated  hereby or thereby will: (i) conflict with or violate
any provision of the certificate of  incorporation or bylaws of AM, AM Cosmetics
or any of their  respective  subsidiaries,  (ii)  conflict  with or violate  any
statute,  law, rule,  regulation,  order, writ,  injunction,  judgment or decree
applicable to AM, AM Cosmetics or any of their respective subsidiaries or any of
their  respective  assets,  or (iii) conflict with or result in any violation or
breach of,  constitute  a default (or an event that with notice or lapse of time
or both would become a default) under, result in or give to any person any right
of  payment  or  reimbursement,   termination,  cancellation,   modification  or
acceleration  of, or result in the  creation of any lien  pursuant to, any note,
bond,  mortgage,  security agreement,  indenture,  contract,  agreement or other
instrument or  obligation  to which AM, AM Cosmetics or any of their  respective
subsidiaries is a party or by which any of their respective assets is bound.

                  (c)  Except for the  filings  expressly  contemplated  by this
Settlement  Agreement,  no  notice,  declaration,  report  or  other  filing  or
registration  with, and no waiver,  consent,  approval or authorization  of, any

                                       9

<PAGE>

governmental or regulatory  authority or  instrumentality or any other public or
private third party,  including any  stockholder or creditor,  is required to be
given,  made  or  obtained  by AM,  AM  Cosmetics  or any  of  their  respective
subsidiaries in connection  with the execution,  delivery or performance of this
Settlement  Agreement  or the AM  Release,  except for the consent of holders of
shares of common  stock of AM  Cosmetics  representing  a majority of the voting
power of the  outstanding  shares of common stock,  voting  together as a single
class, which has been obtained.

     12.  Concurrently  with  the  execution  and  delivery  of  this Settlement
Agreement,  (a)  Milbank,  Tweed,  Hadley & McCloy LLP,  counsel to Carson,  has
delivered  a  written  opinion  to AM in the  form  attached  as  Annex B hereto
(together with a reliance letter addressed to Parent); and (b) Baker & McKenzie,
counsel to AM and AM Cosmetics,  has  delivered a written  opinion to Carson and
Cosmair, Inc., a Delaware corporation, in the form attached as Annex C hereto.

     13.  Neither  AM nor  Carson owes  any past, present  or future obligations
and/or  duties  over to the other  under or  pursuant  to any of the  agreements
described  in  paragraph 9  hereinabove,  copies of which are annexed  hereto as
Exhs. E, F, G, H and I.

     14.  Nothing contained in this Settlement Agreement,  and no act undertaken
in contemplation or pursuant to this Settlement  Agreement,  should be construed
as, nor is  intended  to be, an  admission  of fault or  liability  by any party
hereto.

     15.  This Settlement Agreement and the documents annexed hereto  constitute
the entire agreement between the parties hereto and supersede  any and all prior
agreements or  understandings  between the parties  hereto,  whether  written or
oral.

                                       10

<PAGE>

     16.  As security for Carson's payments  to  AM  described  in  paragraph  1
hereinabove,  Carson,  simultaneously  with  the  execution  of this  Settlement
Agreement,  shall  execute and deliver to AM a  confession  of judgment  with an
accompanying  affidavit,  a copy of  which  is  annexed  hereto  as Exh.  J (the
"Confession of Judgment"), in the amount of $325,500, representing the amount of
the Second  Payment less the  original  face amount of the Letter of Credit (the
"Remainder"),  plus a five percent  addition as the agreed  reasonable  costs of
collection. In the event that AM has not received the Remainder on or before the
Second  Payment  Date,  then,  and in that event,  AM shall be entitled to file,
record and enforce the  Confession of Judgment at any time  following the Second
Payment  Date.  The judgment  shall bear  interest at the rate of 12 percent per
annum  beginning on the date set forth in the  Confession  of Judgment  until AM
receives from Carson full payment of the amount of the judgment,  including said
interest.  In the event  that AM has  received  the  Remainder  on or before the
Second  Payment Date,  then , and in that event,  AM shall  forthwith  return to
Carson the original Confession of Judgment (and all executed copies thereof).

     17.  This  Settlement  Agreement  may not be  modified, altered, amended or
changed, except by written agreement signed by the parties hereto.

     18.  This Settlement  Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective parents,  subsidiaries and
affiliates.

     19.  This  Settlement  Agreement  shall  be  governed  by and  construed in
accordance with the internal laws of the State of New York without  reference to
conflicts of laws principles.

                                       11

<PAGE>

     20.  This  Settlement  Agreement  may be  executed  in  counterparts,  each
executed  counterpart  constituting an  original  but all  counterparts together
constituting only one instrument.

     21.  Each  of  the  parties  hereto agrees to keep confidential  and not to
disclose  (and  to  cause  its  officers,   directors,   employees,  agents  and
representatives  to keep  confidential and not to disclose) the contents of this
Settlement  Agreement and each of the documents executed in connection  herewith
(collectively,  the "Information").  Notwithstanding the foregoing,  each of the
parties  hereto  shall be permitted  to disclose  Information  (i) to the extent
required by applicable  laws and  regulations  (including in connection with any
filings  required under the rules and regulations of the Securities and Exchange
Commission with respect to the tender offer contemplated by the Merger Agreement
or the Merger) or by any subpoena or similar process, provided, however, that it
is agreed and understood  that (x) Carson may deliver the  Information to Parent
and its agents and  representatives and Parent may also disclose the information
as permitted by clause (i) above and (y) each of the parties  hereto may, on ten
(10) business days' prior written notice to the other parties  hereto,  disclose
any Information in any legal or court  proceeding in which it is or may become a
party or  party-in-interest;  (ii) to the extent  such  Information  (A) becomes
publicly  available  other  than as a  result  of a  breach  of this  Settlement
Agreement or (B) was available to such party on a  non-confidential  basis as of
the date hereof,  or (iii) to the extent the parties hereto shall have consented
to such disclosure in writing.

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

                  [remainder of page intentionally left blank]

                                       12

<PAGE>

AM COSMETICS CORP.
  formerly known as PAM ACQUISITION CORP.

By:      /s/Stephen A. Heit
         Stephen A. Heit, Executive Vice
         President and Chief Financial Officer

Dated:   February 25, 2000

AM PRODUCTS COMPANY
  formerly known as AM COSMETICS, INC.

By:      /s/Stephen A. Heit
         Stephen A. Heit, Executive Vice
         President and Chief Financial Officer

Dated:   February 25, 2000

STATE OF NEW YORK )
COUNTY OF NEW YORK         ) ss.:

         On the 25th day of February, 2000, before me personally came Stephen A.
Heit to me  known,  who,  being by me duly  sworn,  did  depose  and say that he
resides  at 57  Drum  Hill  Road,  Wilton,  Connecticut  06897;  that  he is the
Executive  Vice  President and Chief  Financial  Officer of AM COSMETICS  CORP.,
formerly known as PAM ACQUISITION  CORP., and of AM PRODUCTS  COMPANY,  formerly
known as AM COSMETICS,  INC., the  corporations  described in and which executed
the  foregoing  instrument;  and that  deponent  is  authorized  to execute  the
foregoing instrument.

Sworn to before me this
25th day of February, 2000

/s/Robert S. Reder
        Notary Public

                                       13

<PAGE>

CARSON PRODUCTS COMPANY

By:      /s/Malcolm R. Yesner
         Malcolm R. Yesner, Chief Executive Officer

Dated:   February 25, 2000

STATE OF NEW YORK )
COUNTY OF NEW YORK         ) ss.:

         On the 25th day February,  2000,  before me personally  came Malcolm R.
Yesner,  to me known,  who,  being by me duty sworn,  did depose and say that he
resides  at 4 Modena Road,  Savannah, Georgia 31411;  that he is Chief Executive
Officer  of  CARSON  PRODUCTS  COMPANY, the  corporation  described in and which
executed the foregoing  instrument;  and that deponent  is authorized to execute
the foregoing instrument.

Sworn to before me this
25th day of February, 2000

/s/Sue J. Doyle
        Notary Public

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