Common Stock Purchase Warrant (ucc)

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OR UNDER STATE SECURITIES LAWS. THIS
WARRANT MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO THE EXPRESS PROVISIONS OF THIS WARRANT, AND NO SALE,
ASSIGNMENT, TRANSFER, OR OTHER DISPOSITION OF THIS WARRANT SHALL BE
VALID OR EFFECTIVE UNLESS AND UNTIL SUCH PROVISIONS SHALL HAVE BEEN
COMPLIED WITH.


Date of Issuance: June 7, 2005


CANDIES, INC.
Stock Purchase Warrant
(Void after June 8, 2015)


Candies, Inc., a Delaware corporation (the "Company"), for value received, hereby certifies and agrees that UCC Consulting Corporation or its registered assigns (the "Registered Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at any time or from time to time on or after the date hereof (the "Date of Issuance") and on or before the tenth (10th) anniversary of the Date of Issuance but not later than 5:00 p.m. New York time (such date and time, the "Expiration Time"), up to One Million (1,000,000) duly authorized, validly issued, fully paid and nonassessable shares of the Company's common stock, $0.001 par value per share (the "Common Stock") at an initial exercise price equal to $5.98 (five dollars and ninety-eight cents) per share, subject to adjustment in certain cases as described herein. The shares purchasable upon exercise of this Warrant, and the purchase price per share, are hereinafter referred to as the "Warrant Shares" and the "Exercise Price," respectively. The term "Warrant" as used herein shall include this Warrant and any other warrants delivered in substitution or exchange therefor, as provided herein. The Warrant Shares shall vest as follows: (a) 333,334 Warrant Shares (the "First Tranche") upon consummation of the first acquisition of a Target (as such term is defined in that certain investment banking agreement dated as of even date herewith between the Company and UCC Consulting Corporation (the "IB Agreement")), (b) 333,333 Warrant Shares (the "Second Tranche") upon consummation of the second acquisition of a Target and (c) 333,333 Warrant Shares (the "Third Tranche") upon consummation of the third acquisition of a Target, provided, however, no such vesting shall occur with respect to a Minor Acquisition (as such term is defined in IB Agreement).


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1. Exercise.


1.1 Method of Exercise.


(a) This Warrant may be exercised by the Registered Holder, in whole or in
part, by surrendering this Warrant, with a Notice of Exercise in the
form of Annex A hereto (the "Notice of Exercise") duly executed by such
Registered Holder or by such Registered Holder's duly authorized
attorney, at the principal office of the Company set forth on the
signature page hereto, or at such other office or agency as the Company
may designate in writing (the "Company's Office"), accompanied by
payment in full, in lawful money of the United States, of the Exercise
Price payable in respect of the number of shares of Warrant Shares
purchased upon such exercise.


(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which the
Company receives at the Company's Office the Warrant together with the
appropriate completed Notice of Exercise. At such time, the person or
persons in whose name or names any certificates for Warrant Shares
shall be issuable upon such exercise as provided in Section 1.1(c)
hereof shall be deemed to have become the holder or holders of record
of the Warrant Shares represented by such certificates.


(c) As soon as practicable after the exercise of this Warrant, in full or
in part, and in any event within ten (10) days thereafter, the Company,
at its expense, will cause to be issued in the name of, and delivered
to, the Registered Holder, or as such Registered Holder (upon payment
by such Registered Holder of any applicable transfer taxes) may direct:


(i) a certificate or certificates for the number of full Warrant Shares to
which such Registered Holder shall be entitled upon such exercise plus,
in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section
3 hereof; and


(ii) in case such exercise is in part only, a new Warrant or Warrants (dated
the date hereof) of like tenor, representing in the aggregate the
balance of the Warrant Shares that may be purchased thereunder.


1.2 Exercise by Surrender of Warrant. In addition to the method of payment
set forth in Section 1.1 and in lieu of any cash payment required
thereunder, the Warrant may be exercised by surrendering the Warrant in
the manner specified in this Section 1.2, together with irrevocable
instructions to the Company to issue in exchange for the Warrant the
number of shares of Common Stock equal to the product of (x) the number
of shares of Common Stock underlying the Warrants multiplied by (y) a
fraction, the numerator of which is the Market Value (as defined below)
of the Common Stock less the Exercise Price and the denominator of
which is such Market Value. As used herein, the phrase "Market Value"
at any date shall be deemed to be (i) the last reported sale price on
the day prior to such date, or (ii) in case no such reported sale takes
place on such day, the average of the last reported sale prices for the
last three (3) trading days, in either case as (a) officially reported


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by the principal securities exchange on which the Common Stock is
listed or admitted to trading or as reported in the Nasdaq National
Market System, or, (b) if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the Nasdaq
National Market System, the closing sale price as furnished by (i) the
National Association of Securities Dealers, Inc. through Nasdaq or (ii)
similar organization if Nasdaq is no longer reporting such information,
or (c) if such information is no longer reported by NASDAQ or similar
organization, the fair market value of the Common Stock as determined
in good faith by resolution of the Board of Directors of the Company,
based on the best information available to it, but in the case of any
such determination made under this clause (c), in no event less than
the greater of (x) the per share Common Stock price of the last sale or
issuance by the Company or (y) the last closing sale price as available
under clause (a) or (b) above prior to such date.


2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance by the Company, be validly issued, fully paid and nonassessable, and free from preemptive rights and free from all taxes, liens and charges with respect thereto (other than any lien which may be imposed by the Registered Holder(s) of the Warrants). The Company further covenants and agrees that, from and after the Date of Issuance and during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserve, free from preemptive rights, out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant.


3. Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an adjustment therefor in cash on the basis of the Market Value for each fractional share of the Company's Common Stock which would be issuable upon exercise of this Warrant.


4. Requirements for Transfer.


4.1 Warrant Register. The Company will maintain a register (the "Warrant
Register") containing the names and addresses of the Registered Holder
or Registered Holders. Any Registered Holder of this Warrant or any
portion thereof may change its address as shown on the Warrant Register
by written notice to the Company requesting such change, and the
Company shall promptly make such change. Until this Warrant is
transferred on the Warrant Register of the Company, the Company may
treat the Registered Holder as shown on the Warrant Register as the
absolute owner of this Warrant for all purposes, notwithstanding any
notice to the contrary; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may, but shall not
be obligated to, treat the bearer hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.


4.2 Warrant Agent. The Company may, by written notice to the Registered
Holder, appoint an agent for the purpose of maintaining the Warrant
Register referred to in Section 4.1 hereof, issuing the Common Stock
issuable upon the exercise of this Warrant, exchanging this Warrant,
replacing this Warrant or any or all of the foregoing. Thereafter, any
such registration, issuance, exchange, or replacement, as the case may
be, may be made at the office of such agent.


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4.3 Transfer. This Warrant is transferable only with the prior written
consent of the Company; provided, however, the Registered Holder may
transfer the Warrant to any employee or other "affiliated person," as
such term is defined in the Securities Exchange Act of 1934, as
amended, of the Registered Holder without the consent of the Company.
Neither this Warrant nor any rights hereunder may be transferred unless
the Company receives from the Registered Holder such documents and
representations as the Company may request to assure that the proposed
transfer complies with applicable state and federal securities laws and
the regulations of any stock exchange or quotation medium on which the
Common Stock is listed for trading. Subject to the provisions of this
Section 4, this Warrant and all rights hereunder are transferable, in
whole or in part, upon the surrender of this Warrant with a properly
executed Assignment Form in substantially the form attached hereto as
Annex B (the "Assignment") at the principal office of the Company.


4.4 Exchange of Warrant Upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed on the Assignment and subject to the
provisions of this Warrant and with the limitations on assignments and
transfers as contained in this Section 4, the Company at its expense
shall issue to or on the order of the Registered Holder a new warrant
or warrants of like tenor, in the name of the Registered Holder or as
the Registered Holder (on payment by the Registered Holder of any
applicable transfer taxes) may direct, for the number of shares
issuable upon exercise hereof.


5 Investment Representation and Legend. The Registered Holder, by
acceptance of this Warrant, represents and warrants to the Company
that the holder is acquiring the Warrant for its own account for
investment purposes and not with a view toward the distribution
thereof. Unless the offering and sale of the Warrant Shares to be
issued upon the particular exercise of the Warrant shall have been
effectively registered under the 1933 Act, the Company shall be under
no obligation to issue the Warrant Shares covered by such exercise
unless and until the Registered Holder who exercises the Warrant shall
provide the Company with such information that it may reasonably
request to satisfy itself that the issuance of the Warrant Shares upon
exercise of the Warrant complies with an applicable federal and state
securities laws, including, but not limited to, a representation by
such Registered Holder to the Company, at the time of such exercise,
that such person or entity is acquiring such Warrant Shares for his or
her or its own account, for investment and not with a view to, or for
sale in connection with, the distribution of any such Warrant Shares,
in which event the person acquiring such Warrant Shares shall be bound
by the provisions of a legend, substantially as follows, which shall
be endorsed upon the certificate(s) evidencing the Warrant Shares
issued pursuant to such exercise:


"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"). Such shares may not be sold, transferred or
otherwise disposed of unless they have first been registered
under the Act or, unless, in the opinion of counsel
satisfactory to the Company's counsel, such registration is
not required."


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6. Adjustment of Exercise Price.


6.1 Adjustment. If at any time after the date of grant of this Warrant the
Company shall engage in a split-up, subdivision or combination or
exchange of its Common Stock, then the number of shares covered by this
Warrant and the Exercise Price shall be proportionately adjusted for
any such change by the Board of Directors of the Company, whose
determination shall be conclusive.


6.2 Dividend or Distribution. If the Company shall pay a dividend with
respect to the Common Stock or make any other distribution with respect
to the Common Stock, except any distribution specifically provided for
in this Section 6, payable in shares of Co ...