Document:

AGREEMENT AND PLAN OF REORGANIZATION

     AGREEMENT AND PLAN OF REORGANIZATION, dated as of May 1, 2002, between
STANLEY BLACKER, INC., a Pennsylvania corporation ("Seller"), and SYMS CORP, a
New Jersey corporation ("Buyer").

                                    RECITALS:

     WHEREAS, Seller is an apparel and accessories designer company whose
business is the licensing of its copyrights and trademarks to manufacturers for
receipt of royalty payments in exchange therefor (the "Seller Business");

     WHEREAS, Seller desires to transfer all of its assets to Buyer, and Buyer
desires to purchase such assets;

     WHEREAS, to effect such transfer, the parties desire that Seller will
transfer and assign all of its assets and certain of its liabilities comprising
the Seller Business, including certain license agreements, to Buyer in exchange
for consideration specified herein; and

     WHEREAS, the parties to this Agreement intend that the transactions
hereunder will qualify as a reorganization within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").

     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth, Seller and Buyer hereby agree as
follows:

                                   ARTICLE I.
                                  DEFINITIONS

     Section 1.1. Certain Defined Terms. As used in this Agreement, the
following terms have the following meanings:

     "Accounts Receivable" means all accounts and notes receivable of Seller
existing on the Closing Date.

     "Action" means any claim, action, suit, arbitration or proceeding by or
before any Governmental Authority or arbitrator.

     "Affiliate" means, when used with respect to a specified Person, another
Person that, either directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the Person
specified.

     "Assumed Contracts" has the meaning specified in Section 2.1(a).

     "Assumed Liabilities" has the meaning specified in Section 2.3.

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     "Balance Sheet Date" has the meaning specified in Section 3.6.

     "Blumenkranz Infringement" has the meaning specified in Section 2.1(e).

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which banks are required or authorized by law to be closed in the State of New
York.

     "Closing" has the meaning specified in Section 2.6.

     "Closing Date" has the meaning specified in Section 2.6.

     "Code" has the meaning specified in the preamble of this Agreement.

     "Disclosure Schedules" means the Disclosure Schedules delivered to Buyer by
Seller pursuant to this Agreement.

     "Employee Benefit Plan" means any "plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended.

     "Encumbrance" means any security interest, pledge, mortgage, lien, charge,
adverse claim of ownership or use or other encumbrance of any kind.

     "Environmental Law" means any Law relating to pollution, natural resources
or protection of the environment.

     "Excluded Assets" has the meaning specified in Section 2.2.

     "Excluded Liabilities" has the meaning specified in Section 2.4.

     "Fleet Debt" has the meaning specified in Section 2.5.

     "Governmental Authority" means any United States federal, state or local
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or judicial or arbitral body.

     "Hazardous Materials" means any chemical, substance or waste regulated or
identified as toxic or hazardous under any Environmental Law or petroleum,
including crude oil or any fraction, or natural gas, including liquids and
synthetic gas usable for fuel.

     "Intellectual Property" means all of the following that are owned or used
in the operations of the Seller Business or relate to the Seller Assets: (i)
trademarks and service marks (registered or unregistered), trade dress, trade
names and other names and slogans embodying the Seller Business or product
goodwill or indications of origin, all applications or registrations in any
jurisdiction pertaining to the foregoing and all goodwill associated therewith,
including without limitation, the trade name "Stanley Blacker"; (ii) patents,
patentable inventions, discoveries, improvements, ideas, know-how, formula
methodology, processes, technology and computer programs, software and databases
(including source code, object code, development

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documentation, programming tools, drawings, specifications and data) and all
applications or registrations in any jurisdiction pertaining to the foregoing,
including all reissues, continuations, divisions, continuations-in-art, renewals
or extensions thereof; (iii) trade secrets, including confidential and other
non-public information, and the right in any jurisdiction to limit the use or
disclosure thereof; (iv) copyrights (registered or unregistered) in writings,
designs, mask works or other works, and registrations or applications for
registration of copyrights in any jurisdiction; (v) Internet web sites, domain
names and registrations or applications for registration thereof; (vi) licenses,
immunities, covenants not to sue and the like relating to any of the foregoing;
(vii) books and records describing or used in connection with any of the
foregoing; and (viii) claims or causes of action arising out of or related to
infringement or misappropriation of any of the foregoing.

     "Law" means any United States federal, state, local statute, law,
ordinance, regulation, rule, code, order or rule of common law.

     "Licenses" has the meaning set forth in Section 3.11 and shall include
those Licenses set forth on Schedule 3.11.

     "Material Adverse Effect" means any change, circumstance, or effect that is
materially adverse to the business, assets, condition (financial or otherwise)
or results of operations of Seller or the Seller Business as it is currently
being conducted; provided, however, that any adverse change, circumstance or
effect that is primarily caused by conditions affecting the United States
economy as a whole shall not be taken into account when determining if such
change, circumstance, or effect is a Material Adverse Effect.

     "Note" has the meaning specified in Section 2.5.

     "Permitted Encumbrances" means such of the following as to which no notice
has been received or enforcement, collection, execution, levy or foreclosure
proceeding shall have been commenced: (i) liens for taxes, assessments and
governmental charges or levies not yet due and payable or the validity of which
is being contested in good faith; (ii) Encumbrances that arise by operation of
law, such as materialmen's, mechanics', workmen's, repairmen's, warehousemen's
and carrier's liens and other similar liens arising in the ordinary course of
the Seller Business; (iii) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations; (iv) the Encumbrances listed on Schedule 1.1; (v) with
respect to the Assumed Contracts, restrictions imposed under the terms thereof;
and (vi) Encumbrances which, individually or in the aggregate, do not detract
from the value of the property subject thereto in any material respect and do
not impair the operations of the Seller Business or materially adversely affect
the Seller Assets.

     "Person" means any individual, partnership, firm, corporation, association,
trust, limited liability company, unincorporated organization, Governmental
Authority or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.

     "Securities Act" means the Securities Act of 1933, as amended.

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     "Seller Assets" has the meaning specified in Section 2.1.

     "Seller Business" has the meaning specified in the preamble of this
Agreement.

     "Seller Software" means all software currently used in connection with the
Seller Business, including: (i) the object code, or machine-readable form, of
such software; (ii) the password unprotected interpretive code or source code,
or human readable form, of such software, including, but not limited to, all
source files, uncompiled code, graphics, audio source files, instructions,
control logic, flow charts, internal documentation, designs, drawings, prints,
technical data and such other documentation as is necessary to recreate, modify
or enhance the software or any portion thereof; (iii) all materials provided in
connection with such software, including but not limited to, all diskettes,
tapes and print informational or instructional materials relating to such
software; and (iv) all copies of any of the foregoing in the possession or
control of Seller.

     "Shares" has the meaning specified in Section 2.5.

     "Tax" or "Taxes" means all federal, state, local and foreign income,
profits, franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions.

     "Tax Return" means all federal, state, local and foreign returns and
reports (including elections, declarations, disclosures, schedules, estimates
and information returns) required to be supplied to a Tax authority relating to
Taxes, including any amendments thereto.

     Section 1.2. Other Definitional Provisions. Unless the context requires
otherwise, references to "Articles" and "Sections" are to the Articles or
Sections of this Agreement, and references to "Exhibits" and "Schedules" are to
the Exhibits and Schedules annexed hereto. Any of the terms defined in this
Article I may, unless the context requires otherwise, be used in the singular or
the plural depending on the reference. Wherever used herein, the masculine
pronoun shall include the feminine and the neuter, as appropriate in the
context. With respect to any matter or thing, "including" or "includes" means
including but not limited to such matter or thing.

                                  ARTICLE II.
                           PURCHASE AND SALE OF ASSETS

     Section 2.1. Transfer of Assets to Buyer. Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall transfer, convey,
assign and deliver to Buyer, and Buyer shall accept from Seller, free and clear
of any Encumbrances, other than Permitted Encumbrances, all of Seller's right,
title and interest in and to all of the assets of Seller, tangible or
intangible, related to and used in the Seller Business, as they exist as of the
Closing Date,

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together with all accrued benefits and rights pertaining thereto, including all
of the following assets (collectively, the "Seller Assets"):

          (a) all furniture, office and computer equipment and other tangible
personal property in each case used in the operation of the Seller Business
(other than those items disposed of in the ordinary course of business since the
Balance Sheet Date);

          (b) all of Seller's interest in and to all of the contracts related to
the Seller Business (the "Assumed Contracts"), a complete list of such Assumed
Contracts being set forth on Schedule 2.1(b);

          (c) all Accounts Receivable, deposits made under the Assumed
Contracts, prepaid expenses and other receivables arising out of the Seller
Business and outstanding as of the Closing Date;

          (d) all Intellectual Property of the Seller;

          (e) all claims, demands, causes of action, judgments and decrees in
favor of Seller, including any and all claims and causes of action with respect
to the domain name (stanleyblacker.com) registered in the name of Adam
Blumenkranz with register.com (the "Blumenkranz Infringement");

          (f) all books of account, financial, business and operational records
relating to the Seller Business, including customer and supplier lists, accounts
and records, forms and office supplies, advertising and promotional literature,
price lists, records of employees of Seller, and manuals in each case relating
to the Seller Business;

          (g) the right to receive and retain mail, accounts receivable payments
and other communications relating to the Seller Business;

          (h) the right to bill and receive payment for services performed by
the Seller but unbilled or unpaid as of the Closing;

          (i) to the extent transferable, all telephone numbers (e.g., toll free
numbers), fax numbers, Internet addresses and similar numbers or addresses
related to the Seller Business; and

          (j) all other assets, properties, and rights of every kind used in the
Seller Business, on the Closing Date, known or unknown, fixed or unfixed,
accrued, absolute, contingent or otherwise, whether or not specifically referred
to in this Agreement.

     Section 2.2. Excluded Assets. Notwithstanding any other provision of this
Agreement, the term "Seller Assets" shall not include, and Buyer shall not
acquire hereunder (a) any cash (other than deposits made under the Assumed
Contracts), cash equivalents, prepaid taxes, securities, certificates of deposit
and other investments, (b) any corporate, stock and organizational books or
records of Seller, (c) any claim or cause of action with respect to monies

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owed to Seller by Adam Blumenkranz and (d) any books, records and other
documentation relating to any of the Excluded Liabilities (collectively, the
"Excluded Assets").

     Section 2.3. Liabilities and Contracts Assumed by Buyer. Subject to the
terms and conditions of this Agreement, at the Closing, Buyer shall assume and
become responsible to pay, perform and discharge as if the Seller Business had
been operated by Buyer from the commencement thereof and had never been owned by
Seller, all of the debts, obligations and liabilities arising out of or relating
to the Assumed Contracts, whether known or unknown, fixed or unfixed, accrued,
absolute, contingent or otherwise whether existing on the Closing Date or
arising at any time or arising theretofore or thereafter, and (except for
pending or, to the knowledge of Seller, threatened Actions, all of which are
disclosed on Schedule 3.13) whether or not such debts, obligations and
liabilities shall have been disclosed herein or reflected on the books and
records of the Seller, including the following debts, obligations, and
liabilities of Seller (collectively, the "Assumed Liabilities"):

          (a) all debts, obligations and liabilities with respect to any Assumed
Contract; and

          (b) all accounts payable under the Assumed Contracts.

     Upon assumption by Buyer of the Assumed Liabilities, Buyer shall be
entitled to all of Seller's rights and benefits thereunder, and Buyer shall
relieve Seller of its obligations to perform the same.

     Section 2.4. Retained Liabilities and Obligations. Anything in this
Agreement to the contrary notwithstanding, Seller shall be responsible for all
of the liabilities and obligations not hereby expressly assumed by Buyer and
Buyer shall not assume, or in any way be liable or responsible for, any
liabilities or obligations of Seller that are not expressly assumed by Buyer
under Section 2.3 hereof (the "Excluded Liabilities"). Without limiting the
generality of the foregoing, the Excluded Liabilities shall include: (A) any
liability or obligation under contracts or other agreements to which Seller is a
party or by or to which it or any of its assets, properties or rights are bound
or subject but which are not Assumed Contracts; (B) any liability or obligation
arising out of the employment by Seller or any of its Affiliates of any
employees, whether before or after the Closing Date, other than any such
employment liability or obligation which relates to the employees of the Seller
Business (excluding any such liability relating to the employee benefit plans
described in clause (F) below, or any severance obligation in respect of any
employee of Seller terminated in connection with the transactions contemplated
by this Agreement); (C) any liability or obligation of Seller owing to any
stockholder, subsidiary or Affiliate thereof; (D) any liabilities related to (i)
Taxes of the Seller, (ii) Taxes attributable to the transfer of the Seller
Assets pursuant to this Agreement, (iii) Taxes of any person other than Buyer
pursuant to an agreement or otherwise and (iv) any Taxes for which Buyer may be
liable under Treas. Reg. ss. 1.1502-6 or similar provisions of state or foreign
law; (E) any liability or obligation arising under any Environmental Law
attributable to or incurred as a result of any acts, omissions, or conditions
first occurring or in existence as of or prior to the Closing Date, including,
but not limited to, any liability or obligation with respect to the generation,
release, handling, discharge, treatment, storage, disposal, or presence of
Hazardous Materials; (F) except

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with respect to any contribution obligations directly related to any Transferred
Employee's period of coverage under or participation in any 401(k) plan, any
liability or obligation of Seller or any of its Affiliates under any and all
employee benefit arrangements or practices providing retirement benefits, stock
options, stock purchase rights or, in connection with the transactions
contemplated by this Agreement, severance; (G) any obligations or liabilities in
respect of written employment agreements relating to the employment of any
employee of Seller (with the exception of contracts for the engagement of
independent contractors); (H) any liability, obligation or debt of Seller with
respect to any Action (i) listed on Schedule 3.13 or (ii)(a) pending or
threatened against the Seller, or any of its Affiliates as of the Closing Date
and (b) not listed on Schedule 3.13; and (I) liabilities exclusively arising out
of or related to any of the Excluded Assets.

     Section 2.5. Consideration for Seller Assets. In exchange for the transfer
by Seller to Buyer of the Seller Assets, Buyer shall pay to Seller consideration
consisting of (i) $250,000 in cash (the "Cash Portion"), (ii) 44,138 shares of
common stock, par value $.05 per share, of Buyer (the "Shares") and (iii) the
taking by Buyer of the Seller Assets subject to a master advance note, dated May
2000, issued by Seller to Summit Bank, predecessor in interest to Fleet National
Bank, in the original principal amount of $1,675,000.05 (the "Note" and together
with the Cash Portion and the Shares, the "Purchase Price"). The Purchase Price
shall be paid at the Closing as follows:

          (a) Buyer shall pay the Cash Portion by wire transfer of immediately
available funds to an account designated by Seller;

          (b) Subject to Article IX, Buyer shall deliver to Seller a certificate
or certificates representing the Shares issued to Seller; and

          (c) Buyer shall pay the outstanding principal, together with accrued
and unpaid interest thereon as of the Closing Date, of the Note (the "Fleet
Debt") by wire transfer of immediately available funds to an account designated
by the holder thereof.

     Section 2.6. Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at 10:00 a.m., New York time, on the date hereof
(the "Closing Date") at the offices of Robinson Silverman Pearce Aronsohn &
Berman LLP, 1290 Avenue of the Americas, New York, New York 10104.

     Section 2.7. Subsequent Documentation. 1. Seller shall, at any time and
from time to time after the Closing Date, upon the reasonable request of Buyer
and at the expense of Seller, do, execute, acknowledge and deliver, or cause to
be done, executed, acknowledged and delivered, all such further deeds,
assignments, transfers and conveyances as may be required for the better
assigning, transferring, granting, conveying and confirming to Buyer or its
successors and assigns, or for aiding and assisting in collecting and reducing
to possession, any or all of the Seller Assets.

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          (b) Buyer shall, at any time and from time to time after the Closing
Date, upon the reasonable request of Seller and at the expense of Buyer, do,
execute, acknowledge and deliver, or cause to be done, executed acknowledged and
delivered, all such further acknowledgements and instruments of assumption as
may be required for the better assumption and confirming to Seller or its
successors and assigns, or for aiding and assisting in the release of Seller of,
any or all of the Assumed Liabilities and the Fleet Debt.

                                  ARTICLE III.
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller hereby represents and warrants to Buyer as follows:

     Section 3.1. Corporate Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of the Commonwealth of Pennsylvania, and has all requisite
corporate power and authority to own its properties and assets and to conduct
the Seller Business as it has been previously conducted. Copies of the
Certificate or Articles of Incorporation and By-laws (or equivalent documents)
of Seller, with all amendments thereto to the date hereof, have been furnished
or made available to Buyer or its representatives, and such copies are accurate
and complete as of the date hereof.

     Section 3.2. Qualification to Do Business. Seller is duly qualified to do
business as a foreign corporation and is in good standing in every jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualification necessary, except where
the failure to be so qualified would not have a Material Adverse Effect.

     Section 3.3. Authorization and Validity of Agreement. Seller has all
requisite corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the performance of Seller's obligations hereunder have been duly
authorized by all necessary corporate action by the Board of Directors and
stockholder of Seller, and no other corporate proceedings on the part of Seller
are necessary to authorize such execution, delivery and performance. This
Agreement has been duly executed by Seller and constitutes a valid and binding
obligation, enforceable against Seller in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, moratorium or similar laws
of general application relating to or affecting creditors' rights generally and
except for the limitations imposed by general principles of equity.

     Section 3.4. No Conflict or Violation. The execution, delivery and
performance by Seller of this Agreement do not and will not violate or conflict
with any provision of the Certificate or Articles of Incorporation or By-laws
(or equivalent documents) of Seller and do not and will not violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority, nor violate nor will result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which Seller is a party or by which it is
bound or to which any of its respective properties or assets is subject, nor
will result in the creation or imposition of any Lien upon any of the Seller
Assets, nor will

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result in the cancellation, modification, revocation or suspension of any of the
authorizations or approvals of Seller which are included in the Seller Assets.

     Section 3.5. Consents and Approvals. Schedule 3.5 sets forth a true and
complete list of each consent, waiver, authorization or approval of any
governmental or regulatory authority, domestic or foreign, or of any other
Person, and each declaration to or filing or registration with any such
governmental or regulatory authority, that is required in connection with the
execution and delivery of this Agreement by Seller or the performance by Seller
of its obligations hereunder.

     Section 3.6. Financial Statements. The unaudited balance sheet of Seller
(the "Balance Sheet") as of December 31, 2001 (the "Balance Sheet Date"), fairly
presents the financial position of Seller as of the date thereof, and the
related unaudited statement of income for the period ended on such date fairly
presents the results of operations of Seller for the period indicated
(collectively, the "Financial Statements"). The Financial Statements (a) present
fairly the financial condition of the Seller Business as of such date, (b) are
complete and correct in all material respects and were prepared in accordance
with the books of account and records of Seller, (c) can be legitimately
reconciled with the financial statements and the financial records maintained
and the accounting methods applied by Seller for federal income tax purposes and
(d) reflect accurately in all material respects all accrued costs and expenses
of Seller related to the Seller Business.

     Section 3.7. Absence of Certain Changes or Events. (a) Except as set forth
in Schedule 3.7, since the Balance Sheet Date, there has not been:

               (i) any adverse change in the business, operations, properties,
          assets or condition (financial or other) of the Seller Business, or
          any event that has had or is reasonably likely to have a Material
          Adverse Effect, and no factor or condition exists and no event has
          occurred that would be likely to result in any such change;

               (ii) any material loss, damage, destruction or other casualty to
          the Seller Assets (whether or not insurance awards have been received
          or guaranteed); or

               (iii) any change in any method of accounting or accounting
          practice of Seller.

          (b) Since the Balance Sheet Date, Seller has operated the Seller
Business in the ordinary course of business and consistent with past practice
and, except as set forth in Schedule 3.7 hereto, has not:

               (i) incurred any material obligation or liability (whether
          absolute, accrued, contingent or otherwise) relating to its
          operations, except in the ordinary course of business consistent with
          past practice;

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               (ii) failed to discharge or satisfy any Encumbrance or pay or
          satisfy any obligation or liability (whether absolute, accrued,
          contingent or otherwise) arising from the operation of the Seller
          Business, other than liabilities being contested in good faith and for
          which adequate reserves have been provided and Encumbrances arising in
          the ordinary course of business that do not, individually or in the
          aggregate, interfere materially with the use, operation or enjoyment
          of any of the Seller Assets;

               (iii) mortgaged, pledged or subjected to any Encumbrance any of
          the Seller Assets, except for Permitted Encumbrances;

               (iv) sold or transferred any of the assets of the Seller Business
          material to the Seller Business or canceled any debts or claims or
          waived any rights material to the Seller Business relating to the
          operations of the Seller Business, except in the ordinary course of
          business consistent with past practice;

               (v) except for licenses set forth on Schedule 3.11(c), disposed
          of, abandoned, transferred or encumbered any Intellectual Property;

               (vi) defaulted on any material obligation relating to the
          operations of the Seller Business;

               (vii) entered into any transaction material to the Seller
          Business or relating to the Seller Business, except in the ordinary
          course of business consistent with past practice;

               (viii) written down the value of any inventory or written off as
          uncollectible any Accounts Receivable specifically relating to the
          Seller Business or any portion thereof not reflected in the Balance
          Sheet;

               (ix) made any capital expenditure in excess of $20,000, or
          additions to property, plant and equipment used in the operations of
          the Seller Business other than ordinary repairs and maintenance;

               (x) laid off any employees; or

               (xi) entered into any agreement or made any commitment to do any
          of the foregoing.

     Section 3.8. Tax Matters. Except as set forth in Schedule 3.8, all material
Tax Returns required to be filed (taking into account all validly filed
extensions) on or before the Closing Date in respect of Seller have been filed,
and Seller has paid, accrued or otherwise adequately reserved for the payment of
all Taxes shown as due and payable on such Tax Returns.

     Section 3.9. Real Property. Schedule 3.9 contains a list of all leases,
licenses, permits, subleases, and occupancy agreements, together with any
amendments thereto, with respect to (i) all real property leased by Seller
(whether as lessor or lessee and including those in the names of

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nominees or other entities) and used or occupied in connection with the Seller
Business, and (ii) all real property leased or subleased by Seller, as lessor or
sublessor, to third parties.

     Section 3.10. Title to Assets. Seller has good title to the Seller Assets,
free and clear of all Encumbrances (other than Permitted Encumbrances). The
Seller Assets are sufficient and adequate to carry on the Seller Business as
conducted prior to the date hereof.

     Section 3.11. Intellectual Property. (a) Seller owns all right, title and
interest in the Intellectual Property, which represents all intellectual
property necessary to the conduct of the Seller Business as now conducted. To
the knowledge of Seller, there are no conflicts with or infringements of any
Intellectual Property by any third party other than the Blumenkranz
Infringement. To the knowledge of Seller, the conduct of the Seller Business as
currently conducted does not conflict with or infringe any proprietary right of
any third party. Schedule 3.1l(a) sets forth a complete list of all
applications, registrations and patents for Intellectual Property in the
Seller's name in all jurisdictions ("Scheduled Intellectual Property"). All
Scheduled Intellectual Property is registered or currently pending with the U.S.
Patent and Trademark Office or the appropriate national trademark office and
unexpired and all fees relating to the Scheduled Intellectual Property that are
due on or prior to the effective date of this Agreement have been paid. Except
as set forth in Schedule 3.11(a), no Scheduled Intellectual Property is the
subject of any inter partes proceeding in any jurisdiction or any final office
action or final refusal of registration. The consummation of the transactions
contemplated by this Agreement will not alter or impair any Intellectual
Property.

          (b) Schedule 3.11(b) sets forth a complete list of all agreements
relating to Seller's use of the Intellectual Property or to the right of Seller
to use the proprietary rights of any third party. Except as disclosed in
Schedule 3.11(b), Seller is not under any obligation to pay royalties or other
payments in connection with use of any Intellectual Property or proprietary
rights of any third party, is not restricted from assigning any of its rights in
the Intellectual Property or under any agreement related thereto, and will not
otherwise be, as a result of the execution and delivery of this Agreement or the
performance of Seller's obligations under this Agreement, in breach of any
agreement relating to the Intellectual Property.

          (c) Except as disclosed in Schedule 3.11(c), neither Seller nor any of
its Affiliates has granted any right to any third party to use or exploit any of
the Intellectual Property in any jurisdiction, which right has not expired or
terminated on the date hereof. Except as set forth in Schedule 3.11(c), all
rights in any of the Intellectual Property granted to third parties are or have
been set forth in written and executed contracts that, to the knowledge of
Seller, have not been breached in any material respect by said third parties.
Schedule 3.11(c) sets forth each agreement, contract or license under which the
Seller has licensed any rights in any of the Intellectual Property to another
Person (such agreements, contracts or licenses being referred to collectively as
the "Licenses").

          (d) Except as set forth on Schedule 3.11(d), no claims, suits, actions
or proceedings are pending or, to the knowledge of Seller, threatened, against
or by Seller by or against any Person with respect to the ownership, validity,
enforceability or use of any Intellectual Property or otherwise challenging or
questioning the validity or effectiveness of any

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Intellectual Property, except for any such claims that individually, or in the
aggregate, have not had, and would not be reasonably expected to have, a
Material Adverse Effect. Except as set forth on Schedule 3.11(d), no claims are
pending or, to the knowledge of Seller, threatened, by or against the Seller
against or by any Person in which such Person alleges that any activities or
conduct of the Seller Business infringes upon the intellectual property rights
of any Person or that any product packaging design infringes upon a proprietary
packaging design of any Person, except for any such claims that individually, or
in the aggregate, have not had, and would not be reasonably expected to have, a
Material Adverse Effect.

          (e) No present or former employee, officer or director of Seller or
any subsidiary, or agent or outside contractor of Seller, holds any right, title
or interest, directly or indirectly, in whole or in part, in or to any
Intellectual Property.

          (f) To Seller's knowledge, Seller's transmission, reproduction, use,
display or modification (including framing and linking Web site content) or
other practices infringe or violate any proprietary or other right of any other
Person and, to Seller's knowledge, no claim relating to such infringement or
violation is threatened or pending.

          (g) Except as set forth in Schedule 3.11(g), Seller owns or has the
right to use, disclose and transfer, without the consent of any third party, all
Seller Software, other than immaterial "off-the-shelf software," the failure of
which to transfer would not have a Material Adverse Effect.

     Section 3.12. Compliance with Law. Except as set forth in Schedule 3.12,
the operations of the Seller Business have been conducted in all material
respects in accordance with all applicable laws, regulations, orders and other
requirements of all courts and other governmental or regulatory authorities
having jurisdiction over Seller and its assets, properties and operations.
Except as set forth in Schedule 3.12, Seller has not received notice of any
violation of any such law, regulation, order or other legal requirement, and is
not in default with respect to any order, writ, judgment, award, injunction or
decree of any federal, state or local court or governmental or regulatory
authority or arbitrator, domestic or foreign, applicable to the Seller Business
or any of Seller's assets, properties or operations.

     Section 3.13. Litigation. Except as set forth in Schedule 3.13, there are
no claims, actions, suits, proceedings, labor disputes or investigations pending
or, to the best knowledge of Seller, threatened, before any federal, state or
local court or governmental or regulatory authority, domestic or foreign, or
before any arbitrator of any nature, brought by or against Seller or any of its
officers, directors, and to the best of Seller's knowledge, employees, agents or
Affiliates involving, affecting or relating to the Seller Business, the Seller
Assets, or the transactions contemplated by this Agreement, nor is any basis
known to Seller or its directors or officers for any such action, suit,
proceeding or investigation. Schedule 3.13 sets forth a list and a summary
description of all such pending actions, suits, proceedings, disputes or
investigations. Neither the Seller Business nor the Seller Assets are subject to
any order, writ, judgment, award, injunction or decree of any national, state or
local court or governmental or regulatory authority or arbitrator, domestic or
foreign, that affects or might affect the Seller Business or the Seller Assets,
or that would or might interfere with the transactions contemplated by this
Agreement.

                                      -12-
<PAGE>

     Section 3.14. Contracts. Each Assumed Contract is valid, binding and
enforceable against the parties thereto in accordance with its terms, and in
full force and effect on the date hereof. Seller has performed all obligations
required to be performed by it to date under, and is not in default or
delinquent in performance, status or any other respect (claimed or actual) in
connection with, any Assumed Contract, and no event has occurred which, with due
notice or lapse of time or both, would constitute such a default. Except as set
forth in Schedule 3.11(c), to the best knowledge of Seller, no other party to
any Assumed Contract is in default in respect thereof, and no event has occurred
which, with due notice or lapse of time or both, would constitute such a
default. Seller has delivered to the Buyer or its representatives true and
complete originals or copies of all the Assumed Contracts.

     Section 3.15. Receivables. Except as set forth in Schedule 3.15, Accounts
Receivable payable to or for the benefit of the Seller Business reflected on the
Balance Sheet, or acquired by Seller after the date thereof and before the
Closing Date have been collected or are (or will be) current and collectible in
amounts not less than the aggregate amount thereof (net of reserves established
in accordance with prior practice) carried (or to be carried) on the books of
the Seller, and are not subject to any counterclaims or set-offs.

     Section 3.16. Employee Plans. Except as set forth on Schedule 3.16, Seller
has no Employee Benefit Plans.

     Section 3.17. Licensees. Except as set forth in Schedule 3.17, none of the
licensees under the Licenses has, or to the best knowledge of Seller, intends to
terminate or change significantly its relationship with the Seller Business.

     Section 3.18. Transactions with Directors, Officers and Affiliates. Except
as set forth on Schedule 3.18, (a) since January 1, 2000, there have been no
transactions between Seller and any director, officer, employee, stockholder or
other Affiliate of Seller, (b) during the past three years none of the officers,
directors or employees of Seller, or any spouse or relative of any of such
persons, has been a director or officer of, or has had any direct or indirect
interest in, any firm, corporation, association or business enterprise which
during such period has been a supplier, customer or sales agent of Seller or has
competed with or been engaged in any business of the kind being conducted by
Seller, and (c) no Affiliate of Seller owns or has any rights in or to any of
the assets, properties or rights used by the Seller Business in the ordinary
course of its business.

     Section 3.19. Fleet Debt. As of the date hereof, the aggregate principal
amount outstanding under the Note is $1,655,000.00 and accrued and unpaid
interest thereon is $11,355.14, and there are no other monies owed under the
Note.

     Section 3.20. Accuracy of Information. None of Seller's representations,
warranties or statements contained in this Agreement, or in the Exhibits hereto,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make any of such representations, warranties or
statements in light of the circumstances under which they were made not
misleading.

                                      -13-
<PAGE>

     Section 3.21. Survival. Each of the representations and warranties set
forth in this Article III shall be deemed represented and made by Seller at the
Closing as if made at such time and shall survive the Closing notwithstanding
any investigation on the part of Buyer for a period terminating 12 months after
the Closing Date, provided, however, that the representations and warranties set
forth in Section 3.8 and Section 3.12 shall survive the applicable statute of
limitations. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXPRESSLY
DISCLAIMED.

                                  ARTICLE IV.
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to Seller as follows:

     Section 4.1. Corporate Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New Jersey,
and has all requisite corporate power and authority to own its properties and
assets and to conduct its businesses as now conducted.

     Section 4.2. Qualification to Do Business. Buyer is duly qualified to do
business as a foreign corporation and is in good standing in every jurisdiction
in which the character of the properties owned or leased by it or the nature of
the business conducted by it makes such qualification necessary, except where
the failure to be so qualified would not have a material adverse affect on the
business, operations, assets, properties, condition (financial or otherwise) or
prospects of Buyer.

     Section 4.3. Authorization and Validity of Agreement. Buyer has all
requisite power and authority to enter into this Agreement and to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the performance of the Buyer's obligations hereunder have been
duly authorized by all necessary corporate action by Buyer, and no other
proceedings on the part of Buyer are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by Buyer and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws of general application relating to or
affecting creditors' rights generally and except for the limitations imposed by
general principles of equity.

     Section 4.4. No Conflict or Violation. The execution, delivery and
performance by Buyer of this Agreement does not and will not violate or conflict
with any provision of the Certificate of Incorporation and the By-laws of the
Buyer and does not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate nor will result in a breach of or constitute (with due notice or
lapse of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
to which Buyer is a party or by which it is bound or to which any of its
properties or assets is subject.

                                      -14-
<PAGE>

     Section 4.5. Approvals and Consents. Except for such consents, approvals
and filings, the failure of which to obtain or make would not, individually or
in the aggregate, have a material adverse effect on the ability of the Buyer to
consummate the transactions contemplated hereby, the execution, delivery and
performance of this Agreement on behalf of the Buyer does not require the
consent or approval of, or filing with, any government, governmental body or
agency or other entity or Person.

     Section 4.6. Status of the Shares. All of the Shares will be duly
authorized at the Closing and when issued at the Closing in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable.

     Other than as specifically set forth in this Agreement, Buyer makes no
representation or warranty.

                                   ARTICLE V.
                              ADDITIONAL AGREEMENTS

     Section 5.1. Taxes. (a) Any sales, use or transfer taxes payable by reason
of the sale and transfer of any of the Seller Assets hereunder ("Transfer
Taxes") shall be borne by Seller.

          (b) Seller agrees to timely file all Returns relating to the Transfer
Taxes referred to in subsection (a) above, after the review and consent of
Buyer, such consent not to be unreasonably withheld, and shall timely remit on
behalf of itself and Buyer all such Taxes.

          (c) Buyer and Seller hereby agree that of the Purchase Price, (i) $500
shall be allocated to the tangible personal property including, without
limitation, furniture, office and computer equipment included in the Seller
Assets and (ii) the balance shall be allocated to the Assumed Contracts,
goodwill and any other intangible assets included in the Seller Assets. Each of
Buyer and Seller further agree to file its federal income tax returns and its
other tax returns reflecting such allocation and neither party shall, for tax or
other purposes, take any position respecting the allocation of the Purchase
Price that is inconsistent with such allocation.

          (d) As soon as practicable following the Closing, Seller shall
extinguish its liabilities and distribute and assign all of its remaining assets
to its stockholder pursuant to this Agreement in accordance with Section
354(b)(1)(B) of the Code.

     Section 5.2. Further Action; Post Closing Matters. Subject to the terms and
conditions herein provided, each of the parties hereto covenants and agrees to
use its reasonable efforts to deliver or cause to be delivered after the Closing
Date such documents and other papers and to take or cause to be taken such
further actions as may be necessary, proper or advisable under applicable Laws
to consummate and make effective the transactions contemplated hereby including,
without limitation, the following:

          (a) Seller shall promptly forward to Buyer, duly endorsed, any checks
received by Seller in connection with the Seller Business and shall deliver to
Buyer, with interest thereon, if any, any funds received by Seller after the
Closing Date as a result of Seller's depositing any such checks into Seller's
own account. Furthermore, Seller shall also deliver to

                                      -15-
<PAGE>

Buyer, with interest thereon, if any, any funds received by Seller after the
Closing Date in connection with the Seller Business by means of electronic wire
transfer or otherwise; and

          (b) Seller shall file all domestic and foreign trademark assignments
required to be filed by it in connection with the transactions contemplated
hereunder but not filed as of the date hereof.

     Section 5.3. Bulk Sales Compliance. Buyer hereby waives compliance by
Seller with any applicable laws relating to bulk transfers in connection with
the transactions contemplated hereby. Seller shall indemnify Buyer with respect
to any failure to comply with such bulk transfer laws.

     Section 5.4. Assignment of Contracts and Warranties. Notwithstanding
anything contained herein to the contrary, to the extent that any of the Assumed
Contracts are non-assignable or non-transferable to Buyer, or non-assignable or
non-transferable without the consent of a third party, or shall be subject to
any option in any third party by virtue of a request for permission to assign or
transfer by reason of or pursuant to this Agreement or the transactions
contemplated hereby, this Agreement shall not constitute a contract to assign or
transfer the same if an attempted assignment or transfer would (i) constitute a
breach thereof or (ii) create rights in others not desired by Buyer, and with
respect to Assumed Contracts that cannot be assigned to Buyer on the Closing
Date, the performance obligations of Seller thereunder shall, unless not
permitted by such Assumed Contract, be deemed to be subleased or subcontracted
to Buyer until such Assumed Contract has been assigned. Seller and Buyer shall
(1) use reasonable efforts to obtain all necessary consents and (2) cooperate
with each other in any arrangement designed to provide to Buyer the benefits
(including the exercise of rights) under any such Assumed Contracts, including
enforcement for the benefit of Buyer (and at Seller's expense) of any and all
rights of Seller against a third party thereto arising out of the breach or
cancellation by such third party or otherwise; provided, however, that Seller
shall not be obligated to pay more than de minimis monies or to commence a legal
action unless at the request and at the expense of Buyer. Seller shall (A) hold
all monies paid thereunder in trust for the account of Buyer and (B) remit all
such money without set-off of any kind whatsoever to Buyer as promptly as
possible. Buyer shall indemnify and hold harmless Seller with respect to any
obligations or liabilities under or respect to any of such Assumed Contracts.

     Section 5.5. Intellectual Property. Seller will not use, seek to register,
register or authorize others to use, seek to register or register the
Intellectual Property included in the Seller Assets or any other intellectual
property substantially or confusingly similar thereto anywhere in the world and
will not challenge Buyer's right to use, seek to register or register such
Intellectual Property anywhere in the world.

     Section 5.6. Cessation of Use of the Name "Stanley Blacker". From the date
hereof, Seller shall not use the name "Stanley Blacker" or any words or names
confusingly similar to the name "Stanley Blacker" in connection with any
activities or businesses. Within 30 days from the date hereof, Seller shall take
all necessary action, including the filing of any documents required to be filed
with any Governmental Authority to effect a change of its corporate name from

                                      -16-
<PAGE>

"Stanley Blacker" to another name not including either "Stanley" or "Blacker" or
words confusingly similar.

     Section 5.7. Books and Records. For a period of three years from the
Closing Date, and upon reasonable notice, Buyer shall allow Seller and its
agents access to the Seller Assets during normal business hours at Buyer's
principal places of business or at any locations where such records are stored
and Seller shall have the right at its own expense, to make copies of any
records and files included in the Seller Assets; provided that any such access
or copying shall be had or done in such a manner so as not to interfere with the
normal conduct of Buyer's business.

                                   ARTICLE VI.
                                 INDEMNIFICATION

     Section 6.1. Indemnification by Seller. Notwithstanding the Closing or the
delivery of the Seller Assets and regardless of any investigation at any time
made by or on behalf of Buyer or of any knowledge or information that Buyer may
have, Seller shall indemnify and fully defend, save and hold Buyer and its
Affiliates, directors, officers and employees (the "Buyer Indemnitees") harmless
if any Buyer Indemnitee shall at any time or from time to time suffer any
damage, liability, loss, cost, expense (including all reasonable attorneys' fees
incurred by the Buyer Indemnitees in any action or proceeding between Seller and
the Buyer Indemnitees or between the Buyer Indemnitees and any third party or
otherwise), deficiency, interest, penalty, imposition, assessment or fine
(collectively, "Buyer Losses") arising out of or resulting from, or shall pay or
become obliged to pay any sum on account of, any and all the Seller Events of
Breach; provided, however, that (i) Seller shall have no liability to indemnify
Buyer Indemnitees in respect of Buyer Losses unless and until the aggregate
amount of Buyer Losses incurred by Buyer Indemnitees exceeds $12,500 (the
"Deductible"), at which time Seller shall be liable to indemnify Buyer
Indemnitees for the full amount of such Buyer Losses to the extent they exceed
the Deductible and (ii) Seller's maximum aggregate liability in respect to all
Buyer Losses shall not exceed an amount equal to the Purchase Price. As used
herein, "Seller Event of Breach" shall be and mean any one or more of the
following:

          (a) any breach of a representation or warranty made by Seller;

          (b) any failure of Seller duly to perform or observe any term,
provision, covenant or agreement contained herein on the part of Seller to be
performed or observed; or

          (c) any claim or cause of action by any party against any Buyer
Indemnitee, with respect to the Seller Assets, the Excluded Liabilities or the
Excluded Assets or the ownership or use of the Seller Assets by Seller prior to
the Closing Date.

     Section 6.2. Sy Syms Guaranty. Sy Syms ("Syms") hereby represents and
warrants that all of the outstanding capital stock of Seller is owned by The Sy
Syms Revocable Living Trust, of which Syms is the sole trustee. Syms hereby
unconditionally guarantees to Buyer the payment of any amounts which shall
become due pursuant to the provisions of Section 6.1 above. Syms hereby
acknowledges and agrees that this is an unconditional and absolute guaranty of
payment and not a guaranty of collection, and if for any reasons any Buyer
Losses

                                      -17-
<PAGE>

shall not be paid in full when the same become due and payable, Syms undertakes
to perform or cause to be paid forthwith such amounts to Buyer, regardless of
whether Buyer or anyone on its behalf shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to enforce any rights
against Buyer or any other person to compel any such performance or observance
or to collect all or part of any such amount, either pursuant to the provisions
of this Agreement or at law or in equity. Syms hereby unconditionally: (i)
waives any requirement that Buyer, in the event of any default by Buyer, first
make demand upon, or seek to enforce remedies against, Syms or any other person
before demanding payment under or seeking to enforce this guaranty; (ii)
covenants that this guaranty will not be discharged except by payment in full of
any Buyer Losses, subject to the terms and provisions of this Agreement; (iii)
waives diligence, presentment and protest with respect to, and any notice of
default in the payment of any amount at any time payable by Syms under or in
connection with, any Buyer Losses; and (iv) waives all suretyship defenses.

     Section 6.3. Indemnification by Buyer. Notwithstanding the Closing or the
delivery of the Seller Assets and regardless of any knowledge or information
that Seller may have, Buyer shall indemnify and agree to fully defend, save and
hold Seller and its Affiliates, directors, officers, shareholders and employees
(the "Seller Indemnitees"), harmless if any Seller Indemnitee shall at any time
or from time to time suffer any damage, liability, loss, cost, expense
(including all reasonable attorneys' fees incurred by the Seller Indemnitees in
any action or proceeding between Buyer and the Seller Indemnitees or between the
Seller Indemnitees and any third party or otherwise), deficiency, interest,
penalty, imposition, assessment or fine (collectively, "Seller Losses") arising
out of or resulting from, or shall pay or become obligated to pay any sum on
account of, any and all Buyer Events of Breach. As used herein, "Buyer Events of
Breach" shall be construed to be and mean any one or more of the following:

          (a) any breach of a representation or warranty made by Buyer;

          (b) any failure of Buyer duly to perform or observe any term,
provision, covenant or agreement contained herein on the part of Buyer to be
performed or observed after the Closing Date; or

          (c) any claim or cause of action by any party against any Seller
Indemnitee with respect to the Assumed Liabilities, the ownership or use of the
Seller Assets from and after the Closing Date or the payment of the Fleet Debt.

                                  ARTICLE VII.
                    DELIVERIES BY BUYER TO SELLER AT CLOSING

     Concurrently with the execution and delivery of this Agreement on the
Closing Date, the following shall have been satisfied or waived by Seller:

     Section 7.1. Consents and Approvals. All consents, waivers, authorizations
and approvals of any governmental or regulatory authority, domestic or foreign,
and of any other Person required in connection with the execution, delivery and
performance of this Agreement shall have been duly obtained and shall be in full
force and effect on the Closing Date.

                                      -18-
<PAGE>

     Section 7.2. No Violation of Orders. No preliminary or permanent injunction
or other order issued by any court or other governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any government or governmental or
regulatory authority, domestic or foreign, that declares this Agreement invalid
or unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby shall be in effect.

     Section 7.3. Purchase Price. Buyer shall have delivered the Purchase Price
in accordance with Section 2.5.

     Section 7.4. Buyer Closing Documents. Buyer shall have delivered to Seller
an Assignment and Assumption of Contracts, dated as of the date hereof, between
Buyer and Seller (the "Assignment and Assumption"), and such other instruments
of assignment that are necessary to evidence the assumption by Buyer of the
Assumed Liabilities.

     Section 7.5. Legal Matters. All certificates, instruments and other
documents required to be executed or delivered on behalf of Buyer under the
provisions of this Agreement, and all other actions and proceedings required to
be taken by or on behalf of Buyer in furtherance of the transactions
contemplated hereby, shall be reasonably satisfactory in form and substance to
counsel for Seller.

                                 ARTICLE VIII.
                    DELIVERIES BY SELLER TO BUYER AT CLOSING

     Concurrently with the execution and delivery of this Agreement on the
Closing Date, the following shall have been satisfied or waived by Buyer:

     Section 8.1. Consents and Approvals. All consents, waivers, authorizations
and approvals of any governmental or regulatory authority, domestic or foreign,
and of any other person, firm or corporation, required in connection with the
execution, delivery and performance of this Agreement shall have been duly
obtained and shall be in full force and effect on the Closing Date.

     Section 8.2. No Violation of Orders. No preliminary or permanent injunction
or other order issued by any court or other governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any government or governmental or
regulatory authority, domestic or foreign, that declares this Agreement invalid
or unenforceable in any respect or which prevents the consummation of the
transactions contemplated hereby shall be in effect.

     Section 8.3. No Material Adverse Change. During the period from the Balance
Sheet Date to the Closing Date, there shall not have been any material adverse
change in the assets, business, results of operations or financial condition of
the Seller Business.

     Section 8.4. Seller Closing Documents. Seller shall have delivered to Buyer
the following documents:

                                      -19-
<PAGE>

          (a) the files and records forming a part of the Seller Assets;

          (b) a Bill of Sale by Seller to Buyer, the Assignment and Assumption
and such other instruments of conveyance that are necessary to effect the
purchase and sale of the Seller Assets;

          (c) copies of the consents, waivers and approvals specified on
Schedule 3.5;

          (d) such other documents relating to the transactions contemplated by
this Agreement as the Buyer reasonably requests; and

          (e) physical possession and control of the Seller Assets.

     Section 8.5. Legal Matters. All certificates, instruments and other
documents required to be executed or delivered by or on behalf of Seller under
the provisions of this Agreement, and all other actions and proceedings required
to be taken by or on behalf of Seller in furtherance of the transactions
contemplated hereby, shall be reasonably satisfactory in form and substance to
counsel for Buyer.

                                  ARTICLE IX.
                                   THE SHARES

     Section 9.1. Legend. Seller represents that it understands and agrees that,
unless and until registered under the Securities Act or transferred pursuant to
the provisions of Rule 144 promulgated under the Securities Act, each
certificate or other document evidencing any of the Shares shall be endorsed
with a legend substantially in the form set forth below:

     "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION
OR RESALE, AND MAY NOT BE MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL (WITH SUCH COUNSEL AND OPINION TO BE REASONABLY SATISFACTORY
TO THE COMPANY) THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933."

     Section 9.2. Removal of Legend. At the request of Seller, Buyer shall
remove the foregoing legend if Seller shall have obtained an opinion of counsel
(which counsel may be counsel to Buyer) reasonably satisfactory to Buyer to the
effect that the Shares proposed to be transferred may lawfully be disposed
without registration, qualification or legend.

                                      -20-
<PAGE>

                                   ARTICLE X.
                               GENERAL PROVISIONS

     Section 10.1. Expenses. Except as otherwise provided herein, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.

     Section 10.2. Notices. All notices, requests, claims, demands and other.
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.2):

          (a) if to Seller:

              Stanley Blacker, Inc.
              One Syms Way
              Secaucus, NJ 07094
              Attention: Mr. Sy Syms
              Telecopier: (201) 902-9874
              Telephone: (201) 902-9600

          (b) if to Buyer:

              SYMS Corp
              One Syms Way
              Secaucus, NJ 07094
              Attention: Chief Executive Officer
              Telecopier: (201) 902-9874
              Telephone: (201) 902-9600

     Section 10.3. Public Announcements. Buyer and Seller shall use reasonable
efforts to consult with each other before issuing any press release or otherwise
making any public statement with respect to this Agreement or the transactions
contemplated hereby, unless otherwise required by applicable law or by
obligation pursuant to any listing agreement with or rules of any securities
exchange. Except as otherwise provided in this Section 10.3 or required by Law,
no party to this Agreement shall make any public announcements in respect of
this Agreement or the transactions contemplated hereby, or use the name of any
other party hereto in any public announcement, without the prior written consent
of the other parties hereto, which consent shall not be unreasonably withheld or
delayed.

     Section 10.4. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

                                      -21-
<PAGE>

     Section 10.5. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the greatest extent possible.

     Section 10.6. Entire Agreement. This Agreement (including the Disclosure
Schedules and Exhibits) constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral between Buyer and Seller with respect to
the subject matter hereof and except as otherwise expressly provided herein.

     Section 10.7. Assignment. Neither this Agreement nor any of the rights and
obligations of the parties hereunder may be assigned by any of the parties
hereto without the prior consent of each other parties hereto. Notwithstanding
the foregoing, any party assigning its rights or obligations hereunder shall
remain liable for all of its respective obligations under this Agreement.
Subject to the preceding, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns and no other Person shall have any right, obligation or benefit
hereunder.

     Section 10.8. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other Person or
entity any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.

     Section 10.9. Waivers and Amendments. This Agreement may be amended or
modified, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties hereto or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege hereunder,
nor any single or partial exercise of any other right, power or privilege
hereunder, preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies which
any party may otherwise have at law or in equity.

     Section 10.10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
required to be performed prior to the Closing was not performed in accordance
with the terms hereof and that, prior to the Closing, the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.

                                      -22-
<PAGE>

     Section 10.11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State.

     Section 10.12. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      -23-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed as of the date first written above by their respective
officers.

                                    SELLER

                                    STANLEY BLACKER, INC.

                                    By:     s/ SY SYMS
                                       --------------------------------
                                       Name:  Sy Syms
                                       Title: Chairman

                                    BUYER

                                    SYMS CORP

                                    By:    s/ MARCY SYMS
                                       --------------------------------
                                       Name:  Marcy Syms
                                       Title: Chief Executive Officer

Acknowledged and Agreed
as of the date first above written
solely with respect to Section 6.2:

    s/ SY SYMS
-------------------------------------
Sy Syms

                                      -24-<PAGE>
                                                                     Exhibit 4.2

                    BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                       AND

                    KASHNER DAVIDSON SECURITIES CORPORATION

                                     FORM OF

                    UNDERWRITER'S OPTION AGREEMENT FOR UNITS

                          DATED AS OF ___________, 2002

<PAGE>

        UNDERWRITER'S OPTION AGREEMENT FOR UNITS dated as of __, 2001 among
BIODELIVERY SCIENCES INTERNATIONAL, INC., a Delaware corporation (the "Company")
and Kashner, Davidson Securities Corporation, the representative of the
underwriters, a Delaware corporation (hereinafter referred to variously as
the "Holder" or the "Underwriter").

                              W I T N E S S E T H :

        WHEREAS, the Underwriter has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof between the
Underwriter and the Company, to underwrite, on a firm commitment basis, the
Company's proposed public offering ("Public Offering") of up to [2,000,000]
units (inclusive of 300,000 over allotment units) ("Units") at a public offering
price of $[___] per Unit, each Unit consisting of one (1) share of the Company's
common stock par value $___ per share ("Common Stock") and one (1) Class A
Redeemable Common Stock Purchase Warrant ("Class A Warrant"); and

        WHEREAS, the Company proposes to issue to the Underwriter warrants
("Underwriter's Unit Option Warrant") to purchase up to an aggregate of
[200,000] Units (the "UW Units") of the Company at a purchase price of $.001 per
Unit Option Warrant, (exercisable at 165% of the public offering price of the
Units); and

        WHEREAS, the UW Units shall be the same as the Public Units and shall
entitle the Underwriter to purchase (i) one share of Common Stock ("Unit Share")
and (ii) one Class A Warrant ("Unit Warrants"); and

        WHEREAS, the Underwriter's Unit Option Warrant to be issued pursuant to
this Agreement will be issued on the Closing Date (as such term is defined in
the Underwriting Agreement) by the Company to the Underwriter in consideration
for, and as part of the compensation in connection with the Public Offering;

        NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriter to the Company of an aggregate of Two Hundred Dollars

<PAGE>

($200.00), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

        l. Grant. The Holder is hereby granted the right to purchase, at any
time from 2003 [one year from the Effective Date] until 5:30 P.M., New York
time, on , 2007, up to an aggregate of ______ UW Units at an initial exercise
price (subject to adjustment as provided in Section 8 hereof) of 165% of the
Public Offering Price (the "Exercise Price").

        2. Underwriter's Unit Option Warrant Certificates. The Underwriter's
warrant certificates (the "Underwriter's Unit Option Warrant Certificates")
delivered and to be delivered pursuant to this Agreement shall be in the form
set forth in Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.

        3. Exercise of Underwriter's Unit Option Warrants. The Underwriter's
Unit Option Warrants initially are exercisable at an aggregate initial exercise
price (subject to adjustment as provided in Section 8 hereof) per Unit, as set
forth in Section 6 hereof payable by certified or official bank check in New
York Clearing House funds, subject to adjustment as provided in Section 8
hereof. Upon surrender at the Company's principal offices in New Jersey
(presently located at ____________ _________________), of an Underwriter's Unit
Option Warrant with the annexed Form of Election to Purchase duly executed,
together with payment of the Purchase Price (as hereinafter defined) for the UW
Units purchased, the registered holder of an Underwriter's Unit Option Warrant
("Holder" or "Holders") shall be entitled to receive a certificate or
certificates for the UW Units so purchased. The UW Units shall be comprised of
the same share of Common Stock and Class A warrant as being sold to the public
on the Public Offering. The purchase rights represented by each Underwriter's
Unit Option Warrant are exercisable at the option of the Holder thereof, in
whole or in part (but not as to fractional shares of Common Stock underlying the
Underwriter's UW Units). In the case of the purchase of less than all the UW
Units purchasable under

<PAGE>

any Underwriter's Unit Option Warrant, the Company shall cancel the
Underwriter's Unit Option Warrant upon the surrender thereof and shall execute
and deliver a new Underwriter's Unit Option Warrant of like tenor for the
balance of the UW Units purchasable thereunder.

        4.      Issuance of Certificates. Upon the exercise of the Underwriter's
Unit Option Warrant, the issuance of certificates for the Unit Warrants and Unit
Shares or other securities, properties or rights underlying such Underwriter's
Unit Option Warrant, shall be made forthwith (and in any event within five (5)
business days thereafter) without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 5
and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Underwriter and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

        The Underwriter's Unit Option Warrants and the certificates representing
the Unit Warrants and Unit Shares issuable upon exercise of the Underwriter's
Unit Option Warrant shall be executed on behalf of the Company by the manual or
facsimile signature of the Chairman or Vice Chairman of the Board of Directors
or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant Secretary of the Company. The Underwriter's Unit
Option Warrants shall be dated the date of the execution by the Company upon
initial issuance, division, exchange, substitution or transfer. The certificates
representing the Unit Warrants and Unit Shares issuable upon exercise of the
Underwriter's Unit Option Warrants shall be identical in form and substance

                                        3

<PAGE>

to those issued and sold to the public in connection with the Public Offering,
including the terms of redemption for the Class A Warrants.

        5.      Restriction On Transfer of Underwriter's Unit Option Warrant.
The Holder of a Underwriter's Unit Option Warrant, by its acceptance thereof,
covenants and agrees that the Underwriter's Unit Option Warrant are being
acquired as an investment and not with a view to the distribution thereof; and
that the Underwriter's Unit Option Warrant may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one year from the effective date of the offering except to officers or
partners (not directors) of the Underwriter and members of the selling group in
the Public Offering and/or their officers or partners as required in compliance
with NASD Rule 2710(c)(7)(A).

        6.     Exercise Price.

        Section 6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each Underwriter's
Warrant shall be $_____ [165% of Unit Offering Price] per Unit. The exercise
price shall be adjusted from time to time in accordance with the provisions of
Section 8 hereof.

        Section 6.2 Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise prices or the adjusted exercise price, depending upon the
context of the Underwriter's Unit Option Warrant.

        7.      Registration Rights.

        Section 7.1 Demand Registration Under the Securities Act of 1933.

                At any time commencing after , 2003 [one (1) year from the
Effective Date] through and including , 2007 (five (5) years from the Effective
Date), the Holders of the Underwriter's Unit Option Warrant, Unit Warrants and
Unit Shares, representing a "Majority" of the shares of Common Stock issuable
upon the exercise of the Underwriter's UW Units (assuming the exercise of all of
the Underwriter's Unit Option Warrant) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof), exercisable by
written notice to the Company, to have the Company prepare and file with the
Commission, on one occasion, a

                                        4

<PAGE>

registration statement and such other documents, including a prospectus, as may
be necessary in the opinion of both counsel for the Company and counsel for the
Underwriter and Holders, in order to comply with the provisions of the Act, so
as to permit a public offering and sale of their respective Unit Warrants and
Unit Shares during a period equal to the longer of: (i) nine (9) months or (ii)
the unexpired term of the Unit Warrants by such Holders and any other Holders of
the Underwriter's Unit Option Warrant, UW Units and the Units who shall notify
the Company within ten (10) days after receiving notice from the Company of such
request.

        Section 7.2 Piggyback Registration. If, at any time commencing after ,
2002, through and including , 2007 (five (5) years from the Effective Date), the
Company proposes to register any of its securities under the Act (other than in
connection with a merger or pursuant to Form S-8 or similar form) it will give
written notice by registered or certified mail, at least thirty (30) days prior
to the filing of each such registration statement, to the Underwriter and to all
other Holders of the Underwriter's Unit Option Warrant, UW Units, Unit Warrants
or Unit Shares underlying the Underwriter's UW Units, of its intention to do so.
If any of the Underwriters or other Holders of the Underwriter's Unit Option
Warrant, Unit Warrants or Unit Shares underlying the Underwriter's Unit Option
Warrant, notify the Company within twenty (20) days after receipt of any such
notice of its or their desire to include any such securities in such proposed
registration statement, the Company shall afford each of the Underwriter and
such Holders of the Underwriter's Unit Option Warrant, UW Units and/or Units
underlying the Underwriter's Unit Option Warrant, the opportunity to have any of
such securities registered under such registration statement.

        Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the Effective Date thereof.

                                        5

<PAGE>

        (b)     The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Underwriter's Unit Option Warrant, UW Units Unit
Shares and Unit Warrants within ten (10) days from the date of the receipt of
any such registration request.

        Section 7.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:

        (a)     The Company shall use its best efforts to file a registration
statement within forty-five (45) days of receipt of any demand therefor in
accordance with Section 7.1, shall use its best efforts to have any registration
statement declared effective at the earliest possible time, and shall furnish
each Holder desiring to sell the Units underlying the Underwriter's Unit Option
Warrant and UW Units such number of prospectuses as shall reasonably be
requested. Notwithstanding the foregoing sentence, the Company shall be entitled
to postpone the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to this Section 7.4(a) if (i) the Company is
under contract or other binding legal obligation for a material acquisition,
reorganization or divestiture, or (ii) the Company is publically committed to a
self-tender or exchange offer and the filing of a registration statement would
cause a violation of Rule 10b-6 under the Securities Exchange Act of 1934. In
the event of such postponement, the Company shall be required to file the
registration statement pursuant to this Section 7.4(a) upon the earlier of (i)
the consummation or termination, as applicable, of the event requiring such
postponement or (ii) 90 days after the receipt of the initial demand for such
registration.

        (b)     The Company shall pay all costs (excluding fees and expenses of
Holder(s) counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses.

                                        6

<PAGE>

The Holder(s) will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c). If the Company shall
fail to comply with the provisions of Section 7.4(a), the Company shall, in
addition to any other equitable or other relief available to the Holder(s), be
liable for any or all incidental, special and consequential damages and damages
due to loss of profit sustained by the Holder(s) requesting registration of
their Underwriter's Unit Option Warrant, UW Units Unit Shares and Unit Warrants
underlying the Underwriter's Unit Option Warrant.

        (c)     The Company will take all necessary action which may be required
in qualifying or registering the Underwriter's Unit Option Warrant, UW Units,
Unit Shares and Unit Warrants and underlying the Underwriter's Unit Option
Warrant included in a registration statement for offering and sale under the
securities or blue sky laws of such states as reasonably are requested by the
Holder(s), provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction.

        (d)     The Company shall indemnify the Holder(s) of the Underwriter's
Unit Option Warrant, UW Units Unit Shares and Unit Warrants to be sold pursuant
to any registration statement and each person, if any, who controls such Holders
within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement but only to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
the Underwriter contained in Section 7 of the Underwriting Agreement.

        (e)     The Holder(s) of the Underwriter's Unit Option Warrant, UW Units
Unit Shares and Unit Warrants underlying the Underwriter's Unit Option Warrant
to be sold pursuant to a registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, its

                                        7

<PAGE>

officers and directors and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against all loss, claim, damage or expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
or their successors or assigns, for specific inclusion in such registration
statement to the same extent and with the same effect as the provisions
contained in Section 7 of the Underwriting Agreement pursuant to which the
Underwriter has agreed to indemnify the Company.

        (f)     Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Underwriter's Unit Option Warrant or
the UW Units prior to the initial filing of any registration statement or the
effectiveness thereof.

        (g)     If the Underwriters' Warrants, UW Units Unit Shares and Unit
Warrants underlying the UW Units are to be sold in an underwritten public
offering, the Company shall use its best efforts to furnish to each Holder
participating in the offering and to each such underwriter, a signed
counterpart, addressed to such underwriter, of (i) an opinion of counsel to the
Company dated the date of the closing under the underwriting agreement, and (ii)
a "cold comfort" letter dated the date of the closing under the underwriting
agreement signed by the independent public accountants who have issued a report
on the Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.

                                        8

<PAGE>

        (h)     The Company shall as soon as practicable after the Effective
Date of the registration statement, and in any event within 15 months
thereafter, have made "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the Effective Date of the
registration statement.

        (i)     The Company shall deliver promptly to each Holder participating
in the offering requesting the correspondence and memoranda described below, and
the managing underwriters, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration
statement and permit each Holder and underwriter to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.

        (j)     The Company shall enter into an underwriting agreement with the
managing underwriter(s) selected for such underwriting, if any, by Holders
holding a Majority of the Underwriter's Unit Option Warrant, UW Units Unit
Shares and Unit Warrants underlying the Underwriter's Unit Option Warrant
requested to be included in such underwriting. Such underwriting agreement shall
be satisfactory in form and substance to the Company, each Holder and such
managing underwriters, and shall contain such representations, warranties and
covenants by the Company and such other terms as are customarily contained in
agreements of that type used by the managing underwriter(s).

                                        9

<PAGE>

        The Holders shall be parties to any underwriting agreement relating to
an underwritten sale of their Underwriter's Unit Option Warrant, UW Units and
the Units underlying the Underwriter's Unit Option Warrant and may, at their
option, require that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriter(s) shall also be made to
and for the benefit of such Holders. Such Holders shall not be required to make
any representations or warranties to or agreements with the Company or the
underwriter(s) except as they may relate to such Holders, their intended methods
of distribution, and except for matters related to disclosures with respect to
such Holders, contained or required to be contained, in such registration
statement under the Act and the rules and regulations thereunder.

        (k)     For purposes of this Agreement, the term "Majority" in reference
to the Holders of Underwriter's Unit Option Warrant, UW Units Unit Shares and
Unit Warrants, shall mean in excess of fifty percent (50%) of the then
outstanding Units, assuming the full exercise of all Underwriter's Unit Option
Warrant and UW Units that (i) are not held by the Company, an affiliate,
officer, creditor, employee or agent thereof or any of their respective
affiliates, members of their families, persons acting as nominees or in
conjunction therewith or (ii) have not been resold to the public pursuant to
Rule 144 under the Act or a registration statement filed with the Commission
under the Act.

        8.      Adjustments to Exercise Price and Number of Securities.

                The Exercise Price and number of securities issuable with
respect to the Unit Warrants shall be adjusted on the same terms and conditions,
and at the same time, as any adjustments in the Exercise Price and number of
shares issuable with respect to the Public Warrants required by the terms of the
Public Warrants.

        9.      Exchange and Replacement of Underwriter's Unit Option Warrants.
Each Underwriter's Unit Option Warrant is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive office of
the Company, for a new Underwriter's Unit Option

                                       10

<PAGE>

Warrant of like tenor and date representing in the aggregate the right to
purchase the same number of Units as provided in the original Underwriter's Unit
Option Warrant in such denominations as shall be designated by the Holder
thereof at the time of such surrender.

        Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Underwriter's Unit Option
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Underwriter's Unit Option Warrant, if mutilated, the Company will make and
deliver a new Underwriter's Unit Option Warrant of like tenor, in lieu thereof.

        10.     Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Underwriter's Unit Option Warrant, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.

        11.     Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Underwriter's Unit
Option Warrant and the UW Units, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Underwriter's Unit
Option Warrant and/or the UW Units and payment of the Exercise Price therefor,
all UW Units and/or Unit Shares or Unit Warrants and other securities issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. As long as the
Underwriter's Unit Option Warrant and/or UW Units shall be outstanding, the
Company shall use its best efforts to cause all Unit Shares and Unit Warrants
issuable upon the

                                       11

<PAGE>

exercise of the Underwriter's Unit Option Warrant and UW Units to be listed
(subject to official notice of issuance) on all securities exchanges on which
the Common Stock issued to the public in connection herewith may then be listed
and/or quoted on NASDAQ.

        12.     Notices to Underwriter's Warrant Holders. Nothing contained in
this Agreement shall be construed as conferring upon the Holders the right to
vote or to consent or to receive notice as a stockholder in respect of any
meetings of stockholders for the election of directors or any other matter, or
as having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of the Underwriter's Unit Option Warrant or UW
Units and their exercise, any of the following events shall occur:

                (a)     the Company shall take a record of the holders of its
        shares of Common Stock for the purpose of entitling them to receive a
        dividend or distribution payable otherwise than in cash, or a cash
        dividend or distribution payable otherwise than out of current or
        retained earnings, as indicated by the accounting treatment of such
        dividend or distribution on the books of the Company; or

                (b)     the Company shall offer to all the holders of its Common
        Stock any additional shares of capital stock of the Company or
        securities convertible into or exchangeable for shares of capital stock
        of the Company, or any option, right or warrant to subscribe therefor;
        or

                (c)     a dissolution, liquidation or winding up of the Company
        (other than in connection with a consolidation or merger) or a sale of
        all or substantially all of its property assets and business as an
        entirety shall be proposed; then, in any one or more of such events the
        Company shall give written notice of such event at least fifteen (15)
        days prior to the date fixed as a record date or the date of closing the
        transfer books for the determination of the stockholders entitled to
        such dividend, distribution, convertible or exchangeable securities or
        subscription rights, or entitled to vote on such proposed dissolution,

                                       12

<PAGE>

        liquidation, winding up or sale. Such notice shall specify such record
        date or the date of closing the transfer books, as the case may be.
        Failure to give such notice or any defect therein shall not affect the
        validity of any action taken in connection with the declaration or
        payment of any such dividend, or the issuance of any convertible or
        exchangeable securities, or subscription rights, options or warrants, or
        any proposed dissolution, liquidation, winding up or sale.

        13.     Notices

                All notices requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

                (a)     If to the registered Holder of the Underwriter's Unit
        Option Warrant, to the address of such Holder as shown on the books of
        the Company; or

                (b)     If to the Company, to the address set forth in Section 3
        hereof or to such other address as the Company may designate by notice
        to the Holders.

        14.     Supplements and Amendments. The Company and the Underwriter may
from time to time supplement or amend this Agreement without the approval of any
holders of Underwriter's Unit Option Warrants (other than the Underwriter) in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Underwriter may deem necessary or desirable and which
the Company and the Underwriter deem shall not adversely affect the interests of
the Holders of Underwriter's Unit Option Warrants.

        15.     Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.

                                       13

<PAGE>

        16.     Termination. This Agreement shall terminate at the close of
business on ___ _______, 2007. Notwithstanding the foregoing, the
indemnification provisions of Section 7 shall survive such termination until the
close of business on , 2010.

        17.     Governing Law: Submission to Jurisdiction.

                (a)     This Agreement and each Underwriter's Unit Option
Warrant issued hereunder shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be construed in accordance with
the laws of such State without giving effect to the rules of said State
governing the conflicts of laws.

                (b)     The Company, the Underwriter and the Holders hereby
agree that any action, proceeding or claim against it arising out of, or
relating in any way to, this Agreement shall be brought and enforced in the
courts of the State of New York or of the United States of America for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company, the Underwriter and the
Holders hereby irrevocably waive any objection to such exclusive jurisdiction or
inconvenient forum. Any such process or summons to be served upon any of the
Company, the Underwriter and the Holders (at the option of the party bringing
such action, proceeding or claim) may be served by transmitting a copy thereof,
by registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, the Underwriter and
the Holders agree that the prevailing party(ies) in any such action or
proceeding shall be entitled to recover from the other party(ies) all of
its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.

        18.     Entire Agreement: Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with

                                       14

<PAGE>

respect to the subject matter hereof and, except as provided in Section 14
hereof, may not be modified or amended except by a writing duly signed by the
party against whom enforcement of the modification or amendment is sought.

        19.     Severability. If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.

        20.     Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.

        21.     Benefits or this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Underwriter and any other registered Holder(s) of the Underwriter's Unit Option
Warrants or Shares underlying the Underwriter's Unit Option Warrant any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and the Underwriter and any
other Holder(s) of the Underwriter's Unit Option Warrants or Units.

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

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

 [SEAL]                             BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                    By:

                                        Name:
                                        Title:

                                       15

<PAGE>

Attest:

Secretary

                                    Kashner Davidson Securities Corporation

                                    By _____________________________________

                                       Name:
                                       Title:

                                       16

<PAGE>

                                    EXHIBIT A

             [FORM OF UNDERWRITER'S UNIT OPTION WARRANT CERTIFICATE]

THE UNDERWRITER'S UNIT OPTION WARRANT REPRESENTED BY THIS CERTIFICATE AND THE
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY
SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE UNDERWRITER'S UNIT OPTION WARRANT REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE UNDERWRITER'S WARRANT
AGREEMENT FOR UNITS REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                   5:30 P.M., NEW YORK TIME, ___________, 2007

No. W-                       ______ Underwriter's Unit Option Warrant

                        Underwriter's Unit Option Warrant

        This Underwriter's Unit Option Warrant certifies that Kashner Davidson
Securities Corporation, or registered assigns, is the registered holder of _____
[200,000] Underwriter's Unit Option Warrants to purchase initially, at any time
from ___________, 1998 until 5:30 p.m. New York time on ______________, 2003
("Expiration Date"), up to _______ [200,000] Class UW Units (the "Warrants") of
BioDelivery Sciences International, Inc,. a Delaware corporation (the
"Company"), at an initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $____ [165% of the public offering price of
the Units] upon surrender of this Underwriter's Unit Option Warrant and payment
of the Exercise Price at an office or agency of the Company, but subject to the
conditions set forth herein and in the Underwriter's Warrant Agreement for Units
dated as of __________, 2002 between the Company and Kashner Davidson
Securities, Corporation (the "Underwriter's Warrant Agreement"). Payment of the
Exercise Price shall be made by certified or official bank check in New York
Clearing House funds payable to the order of the Company.

<PAGE>

        No Underwriter's Unit Option Warrant may be exercised after 5:30 p.m.,
New York time, on the Expiration Date, at which time all Underwriter's Unit
Option Warrant evidenced hereby, unless exercised prior thereto, shall
thereafter be void.

        The Underwriter's Unit Option Warrant evidenced by this Underwriter's
Unit Option Warrant Certificate are part of a duly authorized issue of Units
pursuant to the Underwriter's Warrant Agreement, which Underwriter's Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Underwriter's Unit Option Warrant.

        The Underwriter's Warrant Agreement provides that upon the occurrence of
certain events the exercise prices and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Underwriter's
Unit Option Warrant Certificate evidencing the adjustment in the exercise price
and the number and/or type of securities issuable upon the exercise of the
Underwriter's Unit Option Warrant; provided, however, that the failure of the
Company to issue such new Underwriter's Unit Option Warrants shall not in any
way change, alter or otherwise impair, the rights of the holder as set forth in
the Underwriter's Warrant Agreement.

        Upon due presentment for registration of transfer of this Underwriter's
Unit Option Warrant at an office or agency of the Company, a new Underwriter's
Unit Option Warrant or Underwriter's Unit Option Warrants of like tenor and
evidencing in the aggregate a like number of Underwriter's Unit Option Warrants
shall be issued to the transferee(s) in exchange for this Underwriter's Unit
Option Warrant, subject to the limitations provided herein and in the
Underwriter's Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.

        Upon the exercise of less than all of the Underwriter's Unit Option
Warrants evidenced by this Certificate, the Company shall forthwith issue to the
holder hereof a new Underwriter's Unit Option Warrant Certificate representing
such number of unexercised Underwriter's Unit Option Warrants.

<PAGE>

        The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Underwriter's Unit Option Warrant (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.

        All terms used in this Underwriter's Unit Option Warrant which are
defined in the Underwriter's Warrant Agreement shall have the meanings assigned
to them in the Underwriter's Warrant Agreement.

                                        3

<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Underwriter's Unit
Option Warrant to be duly executed under its corporate seal.

Dated as of _______________________, 2002

                                    BIODELIVERY SCIENCES INTERNATIONAL, INC.

[SEAL]                              By

                                      Name:
                                      Title:

Attest:

Secretary

                                        4

<PAGE>

                                [FORM OF ELECTION TO PURCHASE]

        The undersigned hereby irrevocably elects to exercise the right,
represented by this Underwriter's Unit Option Warrant, to purchase __________
Units and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
BioDelivery Sciences International, Inc. in the amount of $__________, all in
accordance with the terms hereof. The undersigned requests that a certificate
for such securities be registered in the name of _________________________ whose
address is _____________________________________________ and that such
Certificate be delivered to ___________________________ whose address is
_____________________________________________.

Dated:

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

                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    the Underwriter's Unit Option Warrant.)

                                    Insert Social Security or Other
                                    Identifying Number of Holder)

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