<PAGE>
SECOND AMENDMENT TO
SHAREHOLDERS AGREEMENT
This Second Amendment (this "Amendment") is entered into as of
July 31, 2000 by and among Fannie May Holdings, Inc., a Delaware corporation
("Holdings"), Archibald Candy Corporation, an Illinois corporation (the
"Company"), and the shareholders of Holdings named on the signature pages hereof
(the "Shareholders"), and amends the Shareholders Agreement entered into as of
October 30, 1991 among Holdings, the Company and the Shareholders (or the
persons or entities from whom the Shareholders, directly or indirectly, have
obtained shares of Holdings' common stock) (as amended, the "Shareholders
Agreement"). All capitalized terms used herein and not otherwise defined shall
have the respective meanings provided such terms in the Shareholders Agreement.
RECITALS
WHEREAS, each of Holdings and the Company desires to increase
the size of their respective Board of Directors from five to six members and to
appoint Ted A. Shepherd, the President and Chief Operating Officer of Holdings
and the Company, to fill such vacancy;
NOW, THEREFORE, in consideration of the premises and the
agreements contained herein, the undersigned hereby agree as follows:
1. Section 2(a) of the Shareholders Agreement is hereby
amended by amending and restating clauses (i) and (ii) thereof and adding a
clause (iii) thereto as follows:
(i) for so long as TCW or its Permitted Transferees
collectively holds 100.00 or more Common Shares, two designess of TCW;
(ii) for so long as the Jordan Group or its Permitted
Transferees collectively holds any Common Shares, three designees of the Jordan
Group; and
(iii) such other individuals as TCW and the Jordan
Group may from time to time designate by unanimous consent.
2. Each of the Shareholders hereby consents to each of the
following, even though such consent may not be required pursuant to the
Shareholders Agreement or the By-Laws of Holdings or the Company:
(i) the increase in the size of the Board of Directors
of each of Holdings and the Company from five to six
members; and
(ii) the appointment of Ted A. Shepherd to fill the
vacancy on the Board of Directors of each of Holdings
and the Company.
3. This Amendment is effective as of the date hereof.
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4. Except as specifically amended by this Amendment, the
Shareholders Agreement shall remain in full force and effect and is hereby
ratified and confirmed. The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provisions of, or operate as a waiver of any right, power or remedy of the
Shareholders under, the Shareholders Agreement.
5. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which together shall constitute one and the same instrument.
6. This Amendment and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contacts made and performed in such state and without
regard to conflicts of law doctrines except to the extent that certain matters
are preempted by federal law or are governed by the law of the jurisdiction of
organization of the respective parties.
[signature pages follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
First Amendment to Shareholders Agreement to be executed by its duly authorized
officers as of the day and year first above written.
FANNIE MAY HOLDINGS, INC.
By: /s/ Ted A. Shepherd
-----------------------------------------
Its: Chief Executive Officer
ARCHIBALD CANDY CORPORATION
By: /s/ Ted A. Shepherd
-----------------------------------------
Its: Chief Executive Officer
TCW SPECIAL PLACEMENTS FUND III
By: TCW Capital
Its: General Partner
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Brant Binder
-----------------------
Its: Vice President
TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of June 30, 1989
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Brant Binder
-------------------------
Its: Vice President
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<PAGE>
TCW CAPITAL, as Investment Manager
pursuant to an Investment Management
Agreement dated as of April 18, 1990
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Brant Binder
-----------------------------
Its: Vice President
MEZZANINE CAPITAL
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Brant Binder
-----------------------------
Its: Vice President
WCT INVESTMENT PTE. LTD.
By: /s/ Brett K. Fisher
------------------------------------
Its: Director
JORDAN INDUSTRIES, INC.
By: /s/ John W. Jordan II
------------------------------------
Its: Chairman
JZ EQUITY PARTNERS PLC
By: /s/ James E. Jordan
------------------------------------
Its: Director
LEUCADIA INVESTORS, INC.
By: /s/
------------------------------------
Its: Vice President
THE JOHN W. JORDAN II REVOCABLE TRUST
By: /s/ John W. Jordan
------------------------------------
Trustee
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<PAGE>
THE JW/JENN TRUST
By: /s/ John W. Jordan
------------------------------------
Trustee
/s/ David W. Zalaznick
-----------------------------------------
David W. Zalaznick
/s/ Johnathan F. Boucher
-----------------------------------------
Johnathan F. Boucher
/s/ John R. Lowden
-----------------------------------------
John R. Lowden
/s/ Adam E. Max
-----------------------------------------
Adam E. Max
/s/ John M. Camp
-----------------------------------------
John M. Camp
/s/ Richard Caputo
-----------------------------------------
Richard Caputo
/s/ James E. Jordan
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James E. Jordan
/s/ Paul Rodzevik
-----------------------------------------
Paul Rodzevik
Thomas H. Quinn
-----------------------------------------
Thomas H. Quinn
/s/ Ted A. Shepherd
-----------------------------------------
Ted A. Shepherd
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