UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Delicious Brands, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
246890 10 7
(CUSIP Number)
Jonathan Klein, Esq.
Gordon Altman Weitzen Shalov & Wein LLP
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
September 7, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13(d)-1(g), check
the following box / /.
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule including all exhibits.
See ss.240.13d-7(b) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of Pages
List of Exhibits is on Page
<PAGE>
SCHEDULE 13D
(Amendment No. 1)
Item 1. Security and Issuer
The Schedule 13D filed with the U.S. Securities and Exchange
Commission on April 21, 1999, by Little Meadow Corp., a Delaware corporation
(the "Corporation"), and Carl C. Icahn, a citizen of the United States of
America ("Icahn" and together with the Corporation, the "Reporting Persons")
relating to the common stock, $0.01 par value per share ("Common Stock"), of
Delicious Brands, Inc., a Delaware corporation (the "Issuer"), is hereby amended
to furnish the additional information set forth herein. All capitalized terms
contained herein but not otherwise defined shall have the meaning ascribed to
such terms in the previously filed statement on Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer
Pursuant to an agreement (the "Little Meadow Agreement") between Little
Meadow and the Issuer entered into on September 7, 1999, Little Meadow and the
Issuer agreed, among other things, (i) to an amendment to the Certificate of
Designations, Powers, Preferences and Rights (the "Certificate of Designation")
of the Series B Convertible Preferred Stock ("Series B Stock") of the Issuer
which, among other things, would reduce the number of directors of the Issuer
which the holders of the Series B Stock, voting separately as a class, could
elect from two of seven to one of nine, (ii) to create a nominating committee of
the Board of Directors of the Issuer (the "Board") consisting of a designee of
Little Meadow and two other members of the Board to nominate persons to stand
for elections as directors of the Issuer, and (iii) that, at any time on or
before November 30, 1999, at the Issuer's request, Little Meadow would exercise
its warrant dated April 12, 1999 to purchase 700,000 shares of Common Stock into
up to 700,000 shares of Common Stock, which shares will continue to receive
equitable adjustment and other anti-dilution protection under the terms of the
Certificate of Designation.
Separately, pursuant to an agreement (the "IAC Agreement") entered into
on September 7, 1999, between Icahn Associates Corp.("IAC"), a Delaware
corporation wholly-owned by Starfire Holding Corporation, a Delaware corporation
which is wholly-owned by Mr. Icahn, and the Issuer, IAC agreed, for a period of
two years, to provide certain financial advisory services to the Issuer for
which IAC will receive certain agreed upon fees.
<PAGE>
The Little Meadow Agreement and the IAC Agreement described in this
Item 6 are incorporated herein in their entirety by reference and the above
descriptions of these documents are qualified by such documents themselves. The
Little Meadow Agreement and the IAC Agreement are attached hereto as Exhibits
10.3 and 10.4, respectively.
Item 7. Material to be Filed as Exhibits
Exhibit 10.3. Letter Agreement dated September 7, 1999 by
and between Delicious Brands, Inc. and Little Meadow Corp.
Exhibit 10.4. Letter Agreement, dated September 7, 1999,
by and between Delicious Brands, Inc. and Icahn Associates Corp.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: September 9, 1999
LITTLE MEADOW CORP.
By: /s/ Edward Mattner
Edward E. Mattner
President
/s/ Carl C. Icahn
CARL C. ICAHN
[signature page to Amendment No. 1 to Schedule 13D re: Delicious Brands, Inc.]
<PAGE>
EXHIBIT INDEX
Exhibit 10.3. Letter Agreement dated September 7, 1999 by and
between Delicious Brands, Inc. and Little Meadow Corp.
Exhibit 10.4. Letter Agreement, dated September 7, 1999, by and
between Delicious Brands, Inc. and Icahn Associates
Corp.
LITTLE MEADOW CORP.
767 Fifth Avenue
New York, NY 10153
September 7, 1999
Delicious Brands, Inc.
2070 Maple Street
Des Plaines, IL 60018
Attention: Michael J. Kirby
Re: Terms of Transaction
Gentlemen:
The purpose of this letter is to outline the basic terms pursuant to
which Little Meadow Corp. ("Little Meadow") would amend certain of the terms of
the Securities Purchase Agreement (the "Agreement") dated April 12, 1999 by and
between Delicious Brands, Inc. (the "Company") and Little Meadow and the related
documents entered into in connection with the Agreement. The terms, which shall
be effective as of the date hereof, are as follows:
1. Little Meadow agrees to cause George W. Hebard to resign from the board
of directors of the Company.
2. The number of directors that shall comprise the Board of Directors
shall be increased from seven (7) to nine (9), and the two (2)
vacancies created thereby and the vacancy created by the resignation of
George W. Hebard pursuant to paragraph 1 above, shall be filled by a
vote of the holders of voting stock of the Company, voting together as
a single class at the Company's next annual meeting of stockholders
which shall be held by no later than November 30, 1999. If the annual
meeting of stockholders is not held by such date, the Company will have
a special meeting of stockholders on such date, to elect the three (3)
directors who will fill the vacancies created pursuant to the terms of
paragraphs 1 and 2, and the Board of Directors shall recommend for
election two (2) director- nominees approved by the nominating
committee of the Board of Directors (see Paragraph 4 below) and who
shall have been approved by the director (who shall be a member of the
nominating committee) elected by the holders of the Series B
Convertible Preferred Stock, $.01 par value per share ("Series B
Preferred Stock").
3. The Certificate of Designations, Powers, Preferences and Rights
("Certificate of Designation") of the Series B Convertible Preferred
Stock will be amended so that the holders of a majority of the shares
of the Series B Preferred Stock will have the exclusive right, voting
separately as a class, (i) to elect one (1) rather than two (2)
directors (the "Series B Director"), and (ii) if the Series B Director
resigns or otherwise must be replaced, to elect the replacement for the
Series B Director. Notwithstanding the foregoing, the holders of Series
B Preferred Stock would only retain their right to elect one director,
voting separately as a class, so long as Little Meadow and its
affiliates maintained beneficial ownership (pursuant to rule 13D-3 of
the Securities Exchange Act)
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 2
of at least 11% of the Company's common stock, which percentage is the
same percentage of board representation that the Series B Preferred
Stock has the right to elect.
4. The Certificate of Designation and By-laws, as appropriate, shall be
and hereby are amended mutatis mutandis so as to (i) create a
nominating committee of the board of directors, consisting of three
directors, who shall select the eight persons (i.e. the eight of nine
positions on the board of directors other than that held by the Series
B Director whose selection shall be made in accordance with the
following clause (ii)) as nominees to stand for election as directors
of the Company, at least one member of which nominating committee must
be the Series B Director; (ii) provide that the nominee to be selected
to stand for election as the Series B Director shall be nominated by
the current Series B Director; and (iii) provide that under all
circumstances, at least two (the "Approved Directors") of the eight
persons nominated by the nominating committee to stand for election to
the board of directors, shall be approved by the Series B Director or
if there is no Series B Director by one of the other directors approved
by the Series B Director or by an Approved Director. Moreover, if
either or both of the two persons approved by the Series B Director or
an Approved Director, as the case may be, as provided in clause (iii)
above resigns or must otherwise be replaced on the board of directors,
the person or persons selected to replace such person or persons must
be approved by the Series B Director or by an Approved Director.
Approval to fill all vacancies created on the Board of Directors shall
be made by the nominating committee in a manner consistent with the
manner nominees are selected above.
5. Little Meadow agrees that at any time prior to November 30, 1999,
the Company may, at its election, upon not less than five business days
prior written notice to Little Meadow, require Little Meadow to
exercise all or such portion as is identified in such notice, of its
warrant ("Warrant") to purchase 700,000 shares of the Company's common
stock dated April 12, 1999 (the "Mandatory Exercise" and the number of
shares of the Company's common stock received by Little Meadow upon the
Mandatory Exercise being referred to herein as the "Exercise Shares").
The Certificate of Designation shall be and hereby is amended mutatis
mutandis to provide that in the event that the Company requires Little
Meadow to exercise its Warrant, then, for a period of ten years from
the date of such Mandatory Exercise, the holder(s) of the Series B
Preferred Stock, in addition to the equitable adjustment and other
anti-dilution protection currently contained in the Certificate of
Designation, shall receive equitable adjustment and other anti-dilution
protection with respect to the Exercise Shares in accordance with the
terms of the Certificate of Designation as if, as of the date hereof
and hereafter, the Exercise Shares are and continue to be additional
shares of the Company's common stock into which the Series B Preferred
Stock is convertible. The Company agrees to accept services Little
Meadow has already performed on behalf of the Company in lieu of
consideration required to exercise the Warrant.
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 3
6. All provisions of the documents entered into in connection with this
Agreement will be amended, in form which is reasonably acceptable to
Little Meadow, to reflect the above changes including, without
limitation, amending Section 4(d) of the Certificate of Designation to
provide that the Company may not, without the vote or consent of the
Series B Director or if there is no Series B Director, an Approved
Director, file a voluntary petition or consent to filing of a petition
under any federal or state bankruptcy laws. All such documentation,
including, without limitation, any amendment to the Certificate of
Designation or By-laws, shall be in form and substance reasonably
satisfactory to Little Meadow.
7. The Company agrees to pay up to $20,000 in fees and disbursements of
counsel, upon presentation by counsel of hourly billing records
documenting such expenses, to Little Meadow or its affiliates incurred
in connection with the negotiation, drafting and completion of this
Agreement and all related matters.
Please acknowledge your agreement with the terms set forth above by
executing the space provided for your signature below.
Very truly yours,
LITTLE MEADOW CORP.
By: /s/ Edward Mattner
---------------------------
ACKNOWLEDGED AND AGREED TO:
DELICIOUS BRANDS, INC.
By: Michael J. Kirby
---------------------------
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 1
ICAHN ASSOCIATES CORP.
767 Fifth Avenue
New York, NY 10153
September 7, 1999
Delicious Brands, Inc.
Attention: Michael J. Kirby
2070 Maple Street
Des Plaines, IL 60018
Re: Investment Banking Services
Gentlemen:
The purpose of this letter is to outline the basic terms pursuant to which Icahn
Associates Corp. or its designee ("IAC") will provide financial advisory
services to Delicious Brands, Inc. (the "Company"). The terms are as follows:
IAC hereby agrees to provide certain financial advisory services to the Company
and the Company hereby agrees to seek such services from IAC. The Company agrees
to and hereby does, without the need for any further agreement, engage IAC as
its exclusive agent in connection with any financing or merger or acquisition
transaction for the two year period commencing on the date hereof. During such
two year period, the Company agrees to pay IAC: (i) a fee of 10% of the
aggregate gross transaction proceeds in connection with each financing
transaction (whether debt or equity), other than a registered public offering of
securities, in which the Company engages and for which IAC provides advisory
services; provided, however, that this 10% fee shall only be paid on those
financing transactions in which IAC (or one of its affiliates or wholly owned
subsidiaries) either directly invests its own capital as a principal investor or
if the underwriter, broker-dealer, investment banker, placement agent, or
investor who consummates any such financing transaction was introduced to the
Company by IAC; (ii) for any transaction not covered by clause (i) above, a fee
of 5% of the aggregate gross transaction proceeds in connection with each
financing transaction (whether debt or equity), other than a registered public
offering of securities, in which the Company engages and for which IAC provides
advisory services until the aggregate of the proceeds from all such financing
transactions exceeds $5,000,000; (iii) for any transaction not covered by clause
(i) above, after an aggregate of the proceeds from all such transactions exceeds
$5,000,000, a fee of 3% of the aggregate gross transaction proceeds received, as
calculated only on those amounts above $5,000,000 in aggregate gross transaction
proceeds received, in each financing transaction (whether debt or equity), other
than a registered public offering; (iv) a fee equal to the greater of the
"Lehman Brothers Formula" (as defined below) or 1% of the purchase price (which
amount shall be calculated including, without limitation, assumed liabilities)
in connection with each
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 2
merger or acquisition transaction (including, without limitation, the
acquisition of assets) for which IAC provides advisory services and the Company
is the surviving entity (i.e. the stockholders of the Company immediately prior
to such transaction hold more than 50% of the combined voting power of the then
outstanding securities of the surviving corporation of such transaction
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the general election of directors); (v) a fee equal to the
greater of the "Lehman Brothers Formula" (as defined below) or 1% of the
purchase price in connection with each merger or acquisition transaction
(including, without limitation, the acquisition of assets) in which the Company
is not the surviving entity; (vi) a fee equal to the greater of the "Lehman
Brothers Formula" or 1% of the purchase price in connection with the sale of all
or substantially all of the assets of the Company or in connection with the sale
of assets, other than in the ordinary course of business, including, without
limitation, the sale of any division, business unit or business line of the
Company; and (vii) IAC's reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable fees and disbursements of counsel) incurred in
conjunction with this Agreement and/or with IAC's provision of financial
advisory services to the Company as provided for hereunder, upon the
presentation by IAC of appropriate documentation of such expenses including,
without limitation, hourly billing records for IAC's counsel, as appropriate,
provided, however, that the total of any such fees and disbursements of counsel,
if any, shall be limited to a maximum of $100,000 per calendar year, unless as
otherwise agreed to in writing by both the Company and IAC; provided, that, such
limitation shall not include any legal fees and disbursements of counsel to IAC
or its affiliates incurred prior the date hereof or in connection with entering
into this Agreement or amending or modifying any existing agreements between the
Company, on the one hand, and IAC or its affiliates (including, without
limitation, Little Meadow Corp.), on the other hand. IAC represents to the
Company that such legal fees incurred in connection with the drafting and
negotiation of this Agreement and related matters, inclusive of all such
expenses incurred with regard to Little Meadow Corp., shall not exceed $20,000.
Without limiting the foregoing, the parties hereto acknowledge and agree that if
any financing is consummated by the Company at any time from and after 5:00 p.m.
on August 20, 1999 and prior to the expiration of this Agreement, regardless of
the date and time this Agreement is executed, the Company shall pay to IAC the
fees payable to IAC in connection with any such transaction pursuant to the
terms hereunder. The "Lehman Brothers Formula" will be calculated as follows: 5%
of the first $1.0 million of the purchase price, 4% of the second $1.0 million
of the purchase price, 3% of the third $1.0 million of the purchase price, 2% of
the fourth $1.0 million of the purchase price, 1% of any amount of purchase
price over $4.0 million. If any of the transactions referred to above in
sections (iv), (v) or (vi) are consummated with IAC or an affiliate of IAC or
with a party introduced to the Company (a) by IAC, or (b) by any finder,
underwriter, broker-dealer, investment banker, placement agent, investor or any
other person or entity introduced to the Company by IAC (excluding Parmalat
Bakery/Mrs. Alison's, Specialty Foods Corp., Hain Foods, Keebler & Co., United
Natural Foods, Inc., Tree of Life (Bols Wessanen USA, Inc.), or Swander Pace
Capital; provided, that, any transactions involving such
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 3
excluded companies remain subject to the fees payable under clauses (ii) through
(vii) above), then the Company will agree to pay IAC a fee equal to the greater
of the "Lehman Brothers Formula" or of 2% of the purchase price as defined
above. The parties hereto further agree that, for the purposes of this
Agreement, any transaction for which the discussions or negotiations regarding
such transaction were initiated prior to the second anniversary of the date
hereof (assuming such transaction(s) and their negotiations were not terminated
at least 90 days prior to the second anniversary of the date hereof), shall be
deemed to have occurred within the two year period provided for in the third
sentence of this paragraph, regardless of when such transaction is actually
consummated.
The parties hereto agree that all fees payable by the Company to IAC hereunder
shall be paid: (i) concurrently with the closing ("Closing") of any transaction
for which IAC is entitled to a fee; (ii) with respect to any financing
transaction: (a) in cash, if the Company's common stock, at the time of the
Closing of such transaction, is listed on the NASDAQ Small Cap Market, the
NASDAQ Stock Market or any other nationally recognized stock exchange
(collectively, an "Exchange"), or (b) in the form of a Fee Note (as defined
below) issued by the Company to IAC, if the Company's common stock has been
delisted from the NASDAQ Small Cap Market prior to the Closing in question
(other than as a result of any action taken voluntarily by the Company to cause
a delisting of the Company's common stock) and at the time of such Closing is
not then listed on an Exchange; and (iii) in cash with respect to any merger or
acquisition transaction, including, without limitation, the sale or purchase of
assets. As used herein, a "Fee Note" shall mean a promissory note in the
aggregate principal amount of any fee payable by the Company to IAC hereunder in
the form of a Fee Note, issued by the Company to IAC and having the following
terms: (a) principal and accrued interest thereon payable on the first
anniversary of the date of such note, (b) bearing compound interest at the rate
of 10% per annum, (c) with mandatory prepayment upon the first to occur of
(each, a "Prepayment Event"): (i) the sale of all or substantially all of the
assets of the Company; (ii) the sale of 50% or more of the Company's common
stock; (iii) a merger or consolidation in which the shareholders of the Company
prior to such merger own less than 50% of the voting stock of the entity which
survives such merger; or (iv) upon the listing, after an initial delisting from
the NASDAQ Small Cap Market, of the Company on the NASDAQ Small Cap Market or on
any other Exchange, and (d) with provisions regarding events of default
equivalent to those contained in the proposed notes to be issued to investors in
connection with the Financing. Notwithstanding the foregoing, upon the closing
of the Company's proposed $5.25 million financing (the "Financing") provided by
or through Network 1 Financial Securities, Inc., the Company shall issue to IAC
a promissory note (the "Financing Note") in the aggregate principal amount of
$257,500 (the "Financing Fee Amount"), which note shall: (i) bear interest at a
compounded rate of 10% per annum; (ii) contain provisions regarding events of
default equivalent to those contained in the proposed notes to be issued to
investors in connection with the Financing; and (ii) be due and payable: (x) in
the event that the Company's common stock has not been delisted from the NASDAQ
Small Cap Market (a
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 4
"Delisting") on or before October 31, 1999, on November 1, 1999; or (y) in the
event a Delisting has occurred on or before October 31, 1999, on the first to
occur of (A) the first anniversary of the date hereof; and (B) the first date on
which a Prepayment Event occurs. The parties hereto agree that they will enter
into an escrow agreement, with mutually agreed upon terms and provisions, with
respect to the Financing Fee Amount, pursuant to which: (i) on the date of the
closing of the Financing, the Company will deposit the Financing Fee Amount in
an escrow account; and (ii) the escrow agreement will provide, among other
things, that: (a) in the event the Company is listed on an Exchange on October
31, 1999, the escrow agent shall distribute the Financing Fee Amount to IAC on
November 1, 1999; and (b) in the event a Delisting does occur on or before
October 31, 1999 and the Company is not listed on an Exchange on October 31,
1999, the Financing Fee Amount shall be distributed to the Company on November
1, 1999; provided, however, that, notwithstanding the foregoing clause (b), such
Financing Fee Amount shall remain due and payable by the Company to IAC in
accordance with the provisions of the Financing Note. All cash fees payable to
IAC by the Company as provided above and any amounts payable by the Company to
IAC under any Fee Note or the Financing Note, may, at IAC's sole discretion, be
paid in cash or in the common stock or warrants of the Company, provided that
the payment in common stock or warrants of the Company does not cause the common
stock of the Company to be delisted from the NASDAQ Small Cap Market or
otherwise violate any federal or state securities law, rule or regulation. The
parties hereto agree that in the event such amount is payable in: (i) the common
stock of the Company, such common stock shall be valued at the purchase price
paid for the Company's common stock (or, in the case of a transaction pursuant
to which preferred stock of the Company, warrants or other instruments
convertible into common stock were issued, the value of the Company's common
stock in the transaction on an as-converted basis) in the transaction pursuant
to which such fee became due and payable; and (ii) in warrants to purchase
common stock such warrants shall be valued using a standard Black-Scholes
valuation for such security.
Notwithstanding the foregoing, IAC agrees that in the event that at any time
prior to the first anniversary of the date of this Agreement, the Company
consummates a Sale Transaction (as hereinafter defined), IAC shall only be
entitled to receive 50% of the fee otherwise payable by the Company to IAC under
the terms of this Agreement in connection with the consummation of such Sale
Transaction, unless IAC and each affiliate of IAC which owns shares of voting
stock of the Company, including, without limitation, Little Meadow Corp., vote
all voting shares then owned by such entities, if any, in favor of such Sale
Transaction. As used herein, a "Sale Transaction" shall mean a transaction in
which: (i) at least 90% of the equity of the Company is sold whether by way of
an acquisition, tender offer, merger or otherwise; (ii) all shareholders of the
Company are entitled to receive a minimum cash payment of $5 for each share of
common stock (or common stock equivalent) held by such shareholder (subject to
appropriate adjustments for stock splits, stock dividends and the like); and
(iii) the percentage of voting stock which tenders its shares in favor of such
transaction, together with the number of such shares then held
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 5
by IAC and its affiliates, is not less than 90% of the total number of voting
shares entitled to vote in connection with such transaction.
The Company also agrees that it shall not engage in any public offering of its
securities without first: (i) seeking IAC's advice with regard to such offering;
and (ii) entering into an agreement with IAC pursuant to which IAC shall receive
a fee in connection with providing the Company with such advice. Without
limiting the foregoing, IAC acknowledges that any such agreement will be subject
to the approval of the Company's Board of Directors, Network 1 Financial
Securities, Inc., and the representative of the several underwriters of such
public offering, if any, and NASD Regulation, Inc. or its successor(s).
The Company hereby agrees to indemnify IAC, its directors, officers, employees,
agents and their respective successors and assigns and each person or
individual, corporation, partnership or other entity, if any, who "controls" IAC
(each an "Indemnified Person"), and hold them harmless from, against and in
respect of any and all costs, losses, claims, liabilities, fines, penalties,
damages and expenses (including, without limitation, court costs and reasonable
fees and disbursements of counsel) resulting from or arising out of IAC's
performance of the duties specified herein; provided, however, that the Company
shall not be liable for any of the foregoing (a) for any amount paid in
settlement of claims without the Company's consent, which consent shall not be
unreasonably withheld, or (b) to the extent that any of the foregoing results
primarily from the willful misconduct, bad faith or gross negligence of the
Indemnified Persons seeking indemnification. The Company further acknowledges
and agrees that IAC, in connection with its performance of the duties specified
herein, shall not be required to engage in any activity that will require it to
register as a broker-dealer pursuant to any federal or state law.
Notwithstanding anything contained herein to the contrary, this Agreement will
terminate upon the occurrence of a Change of Control (as defined below);
provided that, IAC has been paid all applicable fees resulting from the
transaction causing such change of control. "Change of Control" means: (i) the
sale of all or substantially all of the assets of the Company to any person or
entity or group of persons or entities acting in concert as a partnership or
other group and under circumstances where the Company has adopted a plan of
liquidation or similar plan under which the Company shall cease to conduct
business and has fully consummated each such plan; or (ii) the merger or
consolidation of the Company with or into another corporation with the effect
that the then existing stockholders of the Company hold less than 50% of the
combined voting power of the then outstanding securities of the surviving
corporation of such merger or the corporation resulting from such consolidation
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors.
<PAGE>
Delicious Brands, Inc.
Attention: Michael J. Kirby
Page 6
Please acknowledge your agreement with the terms set forth above by executing
the space provided for your signature below.
Very truly yours,
ICAHN ASSOCIATES CORP.
By: /s/ Russell Glass
-----------------------------
ACKNOWLEDGED AND AGREED TO:
DELICIOUS BRANDS, INC.
By: /s/ Michael J. Kirby
----------------------------
