Prepared by MERRILL CORPORATION




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CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATION    
    
    OF    
    
    JUNIOR CLASS A PIK PREFERRED STOCK    
    
    OF    
    
    FANNIE MAY HOLDINGS, INC.    




Pursuant
to Section 242 of the Delaware

General Corporation Law 


    The
undersigned, President and Secretary, respectively, of FANNIE MAY HOLDINGS, INC., a Delaware corporation (the "Company"), certify that pursuant to authority granted to and
vested in the Board of Directors of the Company by the provisions of the Certificate of Incorporation of the Company, the Board of Directors has adopted the following resolution amending and restating
the Certificate of Designation of Junior Class A PIK Preferred Stock of the Company: 


    WHEREAS,
pursuant to the authority granted to and vested in the Board of Directors of the Company (hereinafter the "Board of Directors") in accordance with the provisions of the
Certificate of Incorporation of the Company, the Board of Directors created a series of Preferred Stock designated as the Junior Class A PIK Preferred Stock, without par value, of the Company
(such series being hereinafter sometimes called the Junior Class A PIK Preferred Stock) and fixed the designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof as set forth in that certain Certificate of Designation dated
October 28, 1991 (the "Original Certificate of
Designation"), and filed in the office of the Secretary of State of the State of Delaware on October 29, 1991, which Certificate of Designation became a part of the Company's Certificate of
Incorporation pursuant to the General Corporation Law of the State of Delaware; 


    WHEREAS,
on June 28, 2001, the Company filed an amendment to Section 1.5(b) of the Original Certificate of Designation, pursuant to which the mandatory redemption
date of the Junior Class A PIK Preferred Stock was extended from November 1, 2001 until March 15, 2006; 


    WHEREAS,
the Company desires to further amend certain other provisions of the Original Certificate of Designation to modify the accrual of dividends on the Junior Class A PIK
Preferred Stock; 


    WHEREAS,
pursuant to the General Corporation Law of the State of Delaware, such changes require that the Company further amend its Certificate of Incorporation; and 


    WHEREAS,
the holders of the Junior Class A PIK Preferred Stock have unanimously approved the amendment and restatement of the Certificate of Designation set forth below. 


    NOW,
THEREFORE, BE IT RESOLVED, that the Company hereby amends its Certificate of Incorporation by amending and restating, in its entirety, the Certificate of Designation, and hereby
fixes the relative rights, preferences, and limitations of the Junior Class A PIK Preferred Stock as follows: 



1.1 Designation and Amount  


    The shares of such series shall be designated Junior Class A PIK Preferred Stock and the number of shares constituting such series shall initially be
625. 


1.2 Dividends  


    The holders of shares of Junior Class A PIK Preferred Stock shall be entitled to receive, out of the assets of the Company legally available therefor
and as and when declared by the Board of Directors, dividends at the rate of $2,000 per share per annum, payable annually on the first business day of the month of November in each year (each a
"Dividend Payment Date"), 






 


commencing November 1, 1992 to Stockholders of record as of each such date until the Junior Class A PIK Preferred Stock is redeemed as hereinafter provided; provided, that after the
Dividend Payment Date occurring on November 1, 2000 (the "2000 Payment Date"), dividends shall no longer be payable annually but rather shall accrue and cumulate, on an annual compounding
basis, from the 2000 Payment Date and be payable either upon liquidation in accordance with Section 1.3 or upon redemption in accordance with Section 1.5. 



    At
the option of the Company and except as provided below, on any or all Dividend Payment Dates prior to and including the 2000 Payment Date, all of such dividends may be paid,
instead of in cash, in whole or in part, on declaration of the Board of Directors, in additional shares of Junior Class A PIK Preferred Stock (the "Additional Shares"). To the extent dividends
are paid in Additional Shares, such Additional Shares shall be valued at $25,000 per share with a liquidation value of $25,000 per share and shall have dividends payable annually at the rate specified
in the next preceding paragraph, subject to the option of the Company to pay such dividends in Additional Shares in lieu of cash on any or all Dividend Payment Dates prior to and including the 2000
Payment Date. 


    Dividends
shall accrue from the date of original issue of the Junior Class A PIK Preferred Stock, except that dividends on Additional Shares shall accrue from the date such
Additional Shares are issued. For the period prior to and including the 2000 Payment Date, dividends which are not paid in full will cumulate as if dividends had been paid on the relevant Dividend
Payment Date in Additional Shares and such Additional Shares will be deemed to be outstanding on each succeeding Dividend Payment Date until such accumulated annual dividends shall have been declared
and paid in cash or in Additional Shares. Any such declaration may be for a portion, or all, of the then accumulated dividends. To the extent that all or any part of dividends in Additional Shares
would result in the issuance of a fractional Additional Share (which shall be determined with respect to the aggregate number of shares of Junior Class A PIK Preferred Stock held, or deemed to
be held, of record by each holder) then such amount shall be paid in cash or in fractions of Additional Shares based on a value of $25,000 per share. 


    After
the 2000 Payment Date, dividends shall accrue and cumulate, on an annual compounding basis, from the 2000 Payment Date and be payable in cash either upon liquidation in
accordance with Section 1.3 or upon redemption in accordance with Section 1.5. Dividends may not be paid in Additional Shares after the 2000 Payment Date. 


    No
dividend may be paid or declared and set apart for payment on any share of Junior Class A PIK Preferred Stock unless at the same time a ratable dividend in cash or
Additional Shares is paid or set apart for payment on all shares of Junior Class A PIK Preferred Stock then outstanding. 


1.3 Liquidation Rights  


    Preference on Liquidation, etc. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, before any
payment or distribution of the assets of the Company (whether capital or surplus) or proceeds thereof, shall be made to or set apart for the holders of shares of any Junior Securities but after all
the Senior Preferred Stock shall have been redeemed in cash in full, the holders of shares of Junior Class A PIK Preferred Stock not then redeemed shall be entitled to receive payment of
$25,000 per share held by them, plus an amount equal to all accrued and unpaid dividends thereon, whether or not declared, to the date of such payment. If, upon any liquidation, dissolution or
winding-up of the Company, the assets of the Company, or proceeds thereof, distributed among the holders of shares of Junior Class A PIK Preferred Stock shall be insufficient to pay
in full the respective preferential amounts on shares of Junior Class A PIK Preferred Stock, then such assets, or the proceeds thereof, shall be distributed 



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among the holders of Junior Class A PIK Preferred Stock ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full.
After payment of the full amount of the liquidation preference to which the holders of Senior Preferred Stock are entitled and then payment of the full amount of the liquidation preference to which
the holders of the Junior Class A PIK Preferred Stock are entitled, the holders of the Junior Class A PIK Preferred Stock will not be entitled to any further participation in any
distribution of assets of the Company. For the purposes of this paragraph 1.3, the merger or the consolidation of the Company into or with another corporation or the merger or consolidation of
any other corporation (other than a wholly owned subsidiary) into or with the Company or the sale, transfer or other disposition of all or substantially all the assets of the Company, shall be deemed
to be a voluntary or involuntary liquidation, dissolution or winding-up of the Company. 


1.4 Retirement of Shares  


    Shares of Junior Class A PIK Preferred Stock which have been issued and have been redeemed, repurchased or reacquired in any manner by the Company shall
be retired and not reissued and shall resume the status of authorized but unissued and non-designated shares of Preferred Stock of the Company. 


1.5 Redemption  



    (a) Provided
all of the shares of Senior Preferred Stock have been redeemed for cash, with all dividends accrued thereon, and such redemption is not then prohibited by
any agreement to which the Company is then a party, the shares of Junior Class A PIK Preferred Stock (i) may be redeemed at any time at the Company's option, at $25,000 per share, plus in each
case all accrued and unpaid dividends
thereon, whether or not declared, to the date of redemption, and (ii) shall be redeemed in accordance with the provisions of Section 2.7 of the Securities Purchase Agreement by and among the
Company, FMCAN Acquisition Corp., an Illinois corporation, and the purchasers thereunder pursuant to which the Company initially issued its Junior Class A PIK Preferred Stock, as from time to
time amended. If less than all the shares of Junior Class A PIK Preferred Stock are to be redeemed, the shares to be redeemed will be redeemed on a pro rata basis. For purposes of this
Section 1.5(a), dividends shall be deemed to accrue at the rate of $5.50 per share per day prior to their declaration. 


    (b) All
shares of Junior Class A PIK Preferred Stock not theretofore redeemed, shall be redeemed by payment of cash on March 15, 2006 at $25,000 per share
plus all accrued and unpaid dividends thereon, whether or not declared, to the date of redemption, subject to the applicable provisions of law. 



    (c) The
Company shall cause to be mailed to each of the holders of Junior Class A PIK Preferred Stock to be redeemed, at their last addresses as they shall
appear upon the Preferred Stock Register, at least 15 days and not more than 90 days prior to the record date of such redemption, a notice stating the date on which such redemption is
expected to take place (the "Redemption Date"). Except as otherwise required by applicable law, the failure to give any such notice, or any defect therein, shall not affect the validity of such a
redemption. 


    (d) On
or after the Redemption Date, the holders of shares of Junior Class A PIK Preferred Stock which have been redeemed shall surrender their certificates
representing such shares to the Company at its principal place of business or as otherwise notified, and thereupon the redemption price of such shares shall be payable to the order of the person whose
name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be cancelled. From and after the Redemption Date, all rights of the holders of such
redeemed shares of Junior Class A PIK Preferred Stock, except the right 




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to receive the redemption price together with an amount equal to all accrued and unpaid dividends to the date of redemption without interest upon surrender of their certificate or certificates, shall
cease with respect to such shares, and such shares shall not thereafter be transferred on the books of the Company or be deemed to be outstanding for any purpose whatsoever. 




1.6 Voting Rights  


    Except as required by law or herein or any other provision of the Certificate of Incorporation of the Company, the holder of each outstanding share of Junior
Class A PIK Preferred Stock shall not be entitled to vote on any matter submitted to a vote of stockholders. 


1.7 Other Rights And Amendments  


    Without the written consent of or the vote of holders of a majority of the outstanding shares of Junior Class A PIK Preferred Stock (voting as a class)
at a meeting of the holders of Junior Class A PIK Preferred Stock called for such purpose, the Company will not (i) issue any other class or series of stock which is pari passu with, or
entitled to a preference over, the Junior Class A PIK Preferred Stock with respect to any dividend or distribution or any liquidation, distribution of assets, dissolution or
winding-up of the Company, except the 1,500 shares of Senior Preferred Stock described in the Certificate of Designation dated October 25, 1991 adopted pursuant to
Section 151 of the Delaware General Corporation Law by the directors of the Company, as amended and restated by the Amended and Restated Certificate of Designation of the Senior Preferred Stock
which was filed on June 28, 2001 with the Secretary of State of the State of Delaware or (ii) amend, alter, repeal or waive any provision of the Certificate of Incorporation so as to
adversely affect the preferences, rights or powers of the Junior Class A PIK Preferred Stock; provided, however, that any such amendment that reduces the amount of dividend payable on or the
liquidation or redemption price of shares of Junior Class A PIK Preferred Stock shall require the affirmative vote at a meeting called for such purpose, or written consent of, the holder of
each share of Junior Class A PIK Preferred Stock. 


    So
long as at least 100 shares of Junior Class A PIK Preferred Stock are outstanding, the Company will furnish to the holders of such Junior Class A PIK Preferred Stock
quarterly and annual financial reports if the Company is required to file such with the SEC under the Securities Exchange Act of 1934. 


1.8 Issuance  


    The Company will not issue more than 300 shares of Junior Class A PIK Preferred Stock, together with such number of Additional Shares as may be issued
in lieu of cash dividends in accordance with paragraph 1.2. 


1.9 General Provisions  



    (a) The
headings of the paragraphs, subparagraphs, clauses and subclauses of this Certificate of Designation are for convenience of reference only and shall not
define, limit or affect any of the provisions hereof. 


    (b) Each
holder of Junior Class A PIK Preferred Stock, by acceptance thereof, acknowledges and agrees that payments of dividends, and redemption and repurchase
of, such securities by the Company are
subject to restrictions and prohibitions contained in certain credit agreements, indentures and other agreements to which the Company is a party. 




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    (c) The following terms (except as otherwise expressly provided or unless the context clearly requires) for all purposes of this Certificate shall have the meanings
specified below: 



"Junior
Securities" means, collectively, the Common Stock, $.01 par value, and the Junior Class B PIK Preferred Stock, without par value, of the Company or any other series of stock issued by
the Company ranking junior to the Junior Class A PIK Preferred Stock in payment of dividends or upon dissolution, liquidation or winding up of the Company. 


"Person"
as used herein means any corporation, partnership, trust, organization, association, other entity or individual. 





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    IN WITNESS WHEREOF, this Certificate of Amendment has been executed and attested by the undersigned on December 18, 2001. 



	 	 	/s/ TED A. SHEPHERD   
 Ted A. Shepherd, President
	

Attest:	
 	

 
	

/s/ RICHARD J. ANGLIN   
 Richard J. Anglin, Secretary	
 	

 




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CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATION OF JUNIOR CLASS A PIK PREFERRED STOCK OF FANNIE MAY HOLDINGS, INC.