Document:

<PAGE>

                               THIRD AMENDMENT TO
                             SHAREHOLDERS AGREEMENT

          This Third Amendment (this "Amendment") is entered into as of June 28,
2001 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, the Company and Sweet Factory, Inc., an indirect,
wholly-owned subsidiary of the Company, desire to enter into a Financing
Agreement with The CIT Group/Business Credit, Inc. and/or other lenders (as may
be amended, modified, or supplemented from time to time, the "Credit Facility");
and

          WHEREAS, it is a condition to the closing of the Credit Facility that
the parties hereto enter into this Amendment.

          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 to
read "until October 30, 2011" rather than "from and after the Closing Date and
for a period of ten years thereafter".

          2.   Section 3(b) of the Shareholders Agreement is hereby amended by:

               (a)  deleting the word "or" from clause (ii) thereof; and

               (b)  adding the following after clause (iii) thereof:

                    "(iv) (A)  enter into any transaction of merger,
          consolidation or amalgamation, or liquidate, wind up or dissolve
          itself, (B) convey, sell, lease, transfer or otherwise dispose of in a
          transaction or related series of transactions 10% (determined on the
          basis of fair market value) or more of the property, business or
          assets of Holdings and its Subsidiaries or (C) acquire by purchase or
          otherwise the business or any assets of, or stock or other evidences
          of beneficial ownership of, any Person with a purchase price in excess
          of 10% (determined on the basis of fair market value) of the aggregate
          value of the property, business and assets of Holdings and its
          Subsidiaries; PROVIDED, that the foregoing affirmative

<PAGE>

          vote or consent shall not be required for any of the following
          transactions: (x) the merger or consolidation of any Subsidiary of
          Holdings with or into Holdings or with or into any one or more wholly
          owned Subsidiaries of Holdings; or (y) the sale, lease, transfer or
          other disposition by any Subsidiary of Holdings of any or all of its
          respective assets (upon voluntary liquidation or otherwise) to any one
          or more wholly-owned Subsidiaries of Holdings or to Holdings;

                    (v)  create, incur, assume, guarantee or otherwise become or
          remain liable with respect to any indebtedness in excess of $5,000,000
          or enter into any other transaction having a similar effect, other
          than indebtedness of a Subsidiary of Holdings owing to Holdings or to
          another Subsidiary of Holdings and indebtedness of the Company or a
          Subsidiary of the Company existing as of the date hereof; or

                    (vi) elect or remove the President or Chief Financial
          Officer of Holdings or the Company;"

          3.   Section 9(g) of the Shareholders Agreement is hereby amended to
read "October 30, 2011" rather than "the tenth anniversary hereof".

          4.   To induce the TCW Entities to enter into this Amendment, the
Jordan Group has set forth on ANNEX A a list of members of the Jordan Group and
their affiliates (the "Jordan Holders") that beneficially own notes issued
pursuant to the Indenture, together with the aggregate principal amount of such
notes. The Jordan Group agrees that it will promptly notify the TCW Entities
upon each acquisition by the Jordan Holders of notes issued pursuant to the
Indenture in an aggregate principal amount in excess of $5,000,000.

          5.   To induce the Jordan Group to enter into this Amendment, the TCW
Entities that are a party to this Amendment acknowledge that no such TCW Entity
beneficially owns any notes issued pursuant to the Indenture. Such TCW Entities
agree that they will promptly notify the Jordan Group upon each acquisition by
such TCW Entities of notes issued pursuant to the Indenture in an aggregate
principal amount in excess of $5,000,000.

          6.   The notice address set forth in Section 9(m) of the Shareholders
Agreement is hereby amended to read as follows:

          Fannie May Holdings, Inc.
          c/o The Jordan Company
          767 Fifth Avenue
          New York, New York 10153
          Attention:  Adam E. Max, Managing Director

          with a copy to:

          Winston & Strawn
          35 West Wacker Drive
          Chicago, Illinois 60601

                                      -2-
<PAGE>

          Attention:  Patrick O. Doyle

          7.   This Amendment is effective as of the date hereof.

          8.   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.

          9.   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.

          10.  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]

                                      -3-
<PAGE>

          IN WITNESS WHEREOF, each of the parties hereto has caused this Third
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:    President

                              ARCHIBALD CANDY CORPORATION

                              By: /s/ Ted A. Shepherd
                                  ------------------------------
                              Its:    President

                              TCW SPECIAL PLACEMENTS FUND III
                              By:  TCW Capital
                              Its:  General Partner

                                   By: TCW Asset Management Company
                                   Its:  Managing General Partner

                                        By: /s/ Raymond F. Henze
                                            -------------------------
                                        Its:    Group Managing Director

                              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/ Raymond F. Henze
                                       -------------------------
                                   Its:    Group Managing Director

          [signature page to Third Amendment to Shareholders Agreement]

<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/ Raymond F. Henze
                                       -------------------------
                                   Its:    Group Managing Director

                              MEZZANINE CAPITAL

                              By:  TCW Asset Management Company
                              Its:  Managing General Partner

                                   By: /s/ Raymond F. Henze
                                       -------------------------
                                   Its:    Group Managing Director

                              WCT INVESTMENT PTE. LTD.

                              By: /s/ Ken Fish
                                  ------------------------------
                              Its:    Vice President

                              JORDAN INDUSTRIES, INC.

                              By: /s/ John W. Jordan II
                                  ------------------------------
                              Its:    Chairman

                              JZ EQUITY PARTNERS PLC

                              By: /s/ David W. Zalaznick
                                  ------------------------------
                              Its:    Investment Advisor

          [signature page to Third Amendment to Shareholders Agreement]

<PAGE>

                              LEUCADIA INVESTORS, INC.

                              By: /s/ Joseph A. Orlando
                                  ------------------------------
                              Its:    Vice President

                              THE JOHN W. JORDAN II REVOCABLE TRUST

                              By: /s/ John W. Jordan II
                                  ------------------------------

                              THE JW/JENN TRUST

                              By: /s/ John W. Jordan II
                                  ------------------------------
                                        Trustee

                              /s/ David W. Zalaznick
                              ----------------------------------
                              David W. Zalaznick

                              /s/ Jonathan F. Boucher
                              ----------------------------------
                              Jonathan 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

          [signature page to Third Amendment to Shareholders Agreement]

<PAGE>

                              ----------------------------------
                              James E. Jordan

                              /s/ Paul Rodzevik
                              ----------------------------------
                              Paul Rodzevik

                              /s/ Thomas H. Quinn
                              ----------------------------------
                              Thomas H. Quinn

                              /s/ Ted A. Shepherd
                              ----------------------------------
                              Ted A. Shepherd

          [signature page to Third Amendment to Shareholders Agreement]<PAGE>

                          CERTIFICATE OF INCORPORATION

                                       OF

                            FANNY MAY HOLDINGS, INC.

          The undersigned, for the purpose of organizing a corporation pursuant
to the provisions of the General Corporation Law of the State of Delaware, does
make and file this Certificate of Incorporation and does hereby certify as
follows:

          FIRST: NAME. The name of the corporation is FANNY MAY HOLDINGS, INC.
(hereinafter referred to as the "Corporation").

          SECOND: REGISTERED OFFICE. The registered office of the Corporation is
to be located in the City of Wilmington, County of New Castle, in the State of
Delaware. The name of its registered agent is the Corporation Service Company,
whose address is 1013 Centre Road, Wilmington, Delaware 19805.

          THIRD: PURPOSES. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.

          FOURTH: CAPITAL STOCK. The total number of shares of stock which the
Corporation shall have authority to issue is thirty-five hundred (3,500) shares,
of which one thousand (1,000) shares shall be Common Stock of the par value of
one cent ($.01) per share (hereinafter called "Common Stock") and twenty-five
hundred (2,500) shares shall be Preferred Stock without par value (hereinafter
called "Preferred Stock").

               A.   PROVISIONS RELATING TO PREFERRED STOCK. Shares of Preferred
Stock may be issued from time to time in series, and the Board of Directors of
the Corporation is hereby authorized, subject to the limitations provided by
law, to establish and designate one or more series of the Preferred Stock, to
fix the number of shares constituting each series, and to fix the designations,
powers, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, of each series
and the variations and the relative rights, preferences and limitations as
between series, and to increase and to decrease the

<PAGE>

number of shares constituting each series. The authority of the Board of
Directors of the Corporation with respect to each series shall include, but
shall not be limited to, the authority to determine the following:

                    (i)  The designation of such series.

                    (ii) The number of shares initially constituting such
series.

                    (iii) The increase, and the decrease to a number not less
than the number of the outstanding shares of such series, of the number of
shares constituting such series theretofore fixed.

                    (iv) The rate or rates, and the conditions upon and the
times at which dividends on the shares of such series shall be paid, the
preference or relation which such dividends shall bear to the dividends payable
on any other class or classes or on any other series of stock of the
Corporation, and whether or not such dividends shall be cumulative, and, if such
dividends shall be cumulative, the date or dates from and after which they shall
accumulate.

                    (v)  Whether or not the shares of such series shall be
redeemable, and, if such shares shall be redeemable, the terms and conditions of
such redemption, including, but not limited to, the date or dates upon or after
which such shares shall be redeemable and the amount per share which shall be
payable upon such redemption, which amount may vary under different conditions
and at different redemption dates.

                    (vi) The rights to which the holders of the shares of such
series shall be entitled upon the voluntary or involuntary liquidation,
dissolution or winding up of, or upon any distribution of the assets of, the
Corporation, which rights may be different in the case of a voluntary
liquidation, dissolution or winding up than in the case of such an involuntary
event.

                    (vii) Whether or not the shares of such series shall have
voting rights, in addition to the voting rights provided by law, and, if such
shares shall have such voting rights, the terms and conditions thereof,
including, but not limited to, the right of the holders of

<PAGE>

such shares to vote as a separate class either alone or with the holders of
shares of one or more other series of Preferred Stock and the right to have more
than one vote per share.

                    (viii) Whether or not a sinking fund or a purchase fund
shall be provided for the redemption or purchase of the shares of such series,
and, if such a sinking fund or purchase fund shall be provided, the terms and
conditions thereof.

                    (ix) Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other class or classes or
any other series of the same or any other class or classes of stock of the
corporation, and, if provision be made for conversion or exchange, the terms and
conditions of conversion or exchange, including, but not limited to, any
provision for the adjustment of the conversion or exchange rate or the
conversion or exchange price.

                    (x)  Any other relative rights, preferences and limitations.

               B.   PROVISIONS RELATING TO COMMON STORK.

                    (i)  Subject to the preferential dividend rights applicable
to shares of the Preferred Stock, as determined by the Board of Directors of the
Corporation pursuant to the provisions of part A of this Article FOURTH, the
holders of shares of the Common Stock shall be entitled to receive such
dividends as may be declared by the Board of Directors of the Corporation.

                    (ii) Subject to the preferential liquidation rights and
except as determined by the Board of Directors of the Corporation pursuant to
the provisions of part A of this Article FOURTH, in the event of any voluntary
or involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, the holders of shares of the Common Stock shall
be entitled to receive all of the assets of the Corporation available for
distribution to its stockholders ratably in proportion to the number of shares
of the Common Stock held by them,

                    (iii) Except as otherwise determined by the Board of
Directors of the Corporation pursuant to the provisions of part A of this
Article FOURTH, the holders of

<PAGE>

shares of the Common Stock shall be entitled to vote on all matters at all
meetings of the stockholders of the Corporation, and shall be entitled to one
vote for each share of the Common Stock entitled to vote at such meeting, voting
together with the holders of the Preferred Stock who are entitled to vote, and
not as a separate class.

          FIFTH: INCORPORATOR. The name and mailing address of the incorporator
is:

<TABLE>
<CAPTION>
               Name                     Mailing Address
               ----                     ---------------
<S>                                     <C>

               Herbert B. Max           c/o Spengler Carlson Gubar
                                            Brodsky & Frischling
                                        520 Madison Avenue
                                        New York, NY 10022
</TABLE>

          SIXTH: COMPROMISE. Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or between
this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner, as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

          SEVENTH: BOARD OF DIRECTORS AND BY-LAWS. All corporate powers shall be
exercised by the Board of Directors, except as otherwise provided by statute or
by this Certificate of Incorporation, or any amendment thereof, or by the
By-Laws. Directors need not be elected

<PAGE>

by written ballot. The By-Laws may be adopted, amended or repealed by the Board
of Directors of the Corporation, except as otherwise provided by law, but any
by-law made by the Board of Directors is subject to amendment or repeal by the
stockholders of the Corporation.

          EIGHTH: LIMITED LIABILITY. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which the
director derived any improper personal benefit. If the Delaware General
Corporation Law is hereafter amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.

          Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.

          NINTH: INDEMNIFICATION. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or complete action, suit or proceeding, whether civil, criminal, administrative
or investigative, or by or in the right of the Corporation to procure judgment
in its favor, by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, in accordance
with and to the full extent permitted by statute. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an

<PAGE>

undertaking by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this section. The
indemnification provided by this section shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under these
Articles or any agreement or vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

          IN WITNESS WHEREOF, I, the undersigned, being the incorporator
hereinbefore named, hereby declare and certify that the facts herein stated are
true, and accordingly have hereunto set my hand this 13th day of August, 1991.

                                        /s/ Herbert B. Max
                                        ----------------------------------------
                                        Herbert B. Max, Incorporator

6743c

<PAGE>

                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                            FANNY MAY HOLDINGS, INC.

                         (PURSUANT TO SECTION 241 OF THE
                      GENERAL CORPORATION LAW OF DELAWARE)

                                     * * * *

          FANNY MAY HOLDINGS, INC., a corporation organized and existing under
any by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

          FIRST: That the Corporation has not received any payment for any of
its stock and that the Sole Incorporator of the Corporation, pursuant to Section
241(b) of the General Corporation Law of the state of Delaware, duly adopted
resolutions setting forth the following amendments to the Certificate of
Incorporation of the Corporation.

               RESOLVED: that the Certificate of Incorporation of the
          Corporation be, and it hereby is, amended by deleting in its entirety
          the present Article First and substituting in lieu thereof the
          following new Article First:

                    "FIRST: NAME. The name of the Corporation is FANNIE MAY
               HOLDINGS, INC. (hereinafter referred to as the "Corporation")."

                    SECOND: That said amendment was duly adopted in accordance
               with the provisions of Section 241 of the General Corporation Law
               of the State of Delaware.

<PAGE>

          IN WITNESS WHEREFOF, said FANNY MAY HOLDINGS, INC. has caused this
certificate to be signed by Herbert B. Max, its Sole Incorporator, this 22nd day
of August, 1991.

                                        FANNY MAY HOLDINGS, INC.

                                        By: /s/ Herbert B. Max
                                        ----------------------------------------
                                                       Herbert B. Max
                                                       Sole Incorporator

6843c

<PAGE>

                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                            FANNIE MAY HOLDINGS, INC.

          FANNIE MAY HOLDINGS, INC., a Delaware Corporation (the "Corporation"),
does hereby certify as follows;

          FIRST: The name of the Corporation is Fannie Fay Holdings, Inc.

          SECOND: The Certificate of Incorporation of the Corporation is hereby
amended by deleting ARTICLE FOURTH thereof and substituting in lieu thereof the
following:

          FOURTH: CAPITAL STOCK. The total number of shares of all classes of
     stock which the Corporation shall have authority to issue is 8,000 shares
     of capital stock, consisting of (a) 2,500 shares of Preferred Stock,
     without par value ("Preferred Stock"), (b) 2,000 shares of Class A Common
     Stock, $.01 par value per share ("Class A Common Stock"), (c) 2,000 shares
     of Class B Common stock, $.01 par value per share ("Class B Common Stock"),
     (d) 1,000 shares of Class C Common Stock, $.01 par value per share (Class C
     Common Stock") and (e) 1,000 shares of Class D Common Stock $.01 par value
     per share ("Class D Common Stock") (the Class A Common Stock, Class B
     Common Stock, Class C Common Stock and Class D Common Stock are referred to
     herein collectively as the "Common Stock").

     I.   PROVISIONS RELATING TO PREFERRED STOCK.

          Shares of Preferred Stock may be issued from time to time in series,
     and the Board of Directors of the Corporation is hereby authorized, subject
     to the limitations provided by law, to establish and designate one or more
     series of the Preferred Stock, to fix the number of shares constituting
     each series, and to fix the designations, powers, preferences and relative,
     participating, optional or other special rights, and qualifications,
     limitations or restrictions thereof, of each series and the variations and
     the relative rights, preferences and limitations as between series, and to
     increase and to decrease the number of shares constituting each series. The
     authority of the Board of Directors of the Corporation with respect to each
     series shall include, but shall not be limited to, the authority to
     determine the following:

               (i)  The designation of such series.

               (ii) The number of shares initially constituting such series.

<PAGE>

               (iii) The increase, and the decrease to a number not less than
          the number of the outstanding shares of such series, of the number of
          shares constituting such series theretofore fixed.

               (iv) The rate or rates, and the conditions upon and the times at
          which dividends on the shares of such series shall be paid, the
          preference or relation which such dividends shall bear to the
          dividends payable on any other class or classes or on any other series
          of stock of the Corporation, and whether or not such dividends shall
          be cumulative, and, if such dividends shall be cumulative, the date or
          dates from and after which they shall accumulate.

               (v)  Whether or not the shares of such series shall be
          redeemable, and, if such shares shall be redeemable, the terms and
          conditions of such redemption, including, but not limited to, the date
          or dates upon or after which such shares shall be redeemable and the
          amount per share which shall be payable upon such redemption, which
          amount may vary under different conditions and at different redemption
          dates.

               (vi) The rights to which the holders of the shares of such series
          shall be entitled upon the voluntary or involuntary liquidation,
          dissolution or winding up of, or upon any distribution of the assets
          of, the Corporation, which rights may be different in the case of a
          voluntary liquidation, dissolution or winding up than in the case of
          such an involuntary event.

               (vii) Whether or not the shares of such series shall have voting
          rights, in addition to the voting rights provided by law, and, if such
          shares shall have such voting rights, the terms and conditions
          thereof, including, but not limited to, the right of the holders of
          such shares to vote as a separate class either alone or with the
          holders of shares of one or more other series of Preferred Stock and
          the right to have more than one vote per share.

               (viii) Whether or not a sinking fund or a purchase fund shall be
          provided for the redemption or purchase of the shares of such series,
          and, if such a sinking fund or purchase fund shall be provided, the
          terms and conditions thereof.

               (ix) Whether or not the shares of such series shall be
          convertible into, or exchangeable for, shares of any other class or
          classes or any other series of the same or any other class or classes
          of stock of the corporation, and, if provision be made for conversion
          or exchange, the terms and conditions of conversion or exchange,
          including, but not limited to, any provision for the adjustment of the
          conversion or exchange rate or the conversion or exchange price.

               (x)  Any other relative rights, preferences and limitations.

II.  PROVISIONS RELATING TO COMMON STOCK.

          A.   DIVIDENDS. All shares of Common Stock of the Corporation shall be
     of equal rank and shall be identical, except as hereinafter specifically
     set forth. No dividend

<PAGE>

     or other distribution shall be paid upon, or declared or set apart for any
     share of any class of Common Stock of the Corporation for any dividend
     period unless at the same time a dividend or distribution for the same
     period shall be paid upon, or declared and set apart for, all shares of
     each other class of Common Stock then issued and outstanding, in the same
     amount with respect to each issued and outstanding share of Common Stock,
     as though all shares of Common Stock were of a single class, except that
     the Corporation may at any time concurrently declare and pay an equal
     dividend, on a shares for share basis, in each respective class of Common
     Stock in shares of such class of Common Stock.

          B.   DISTRIBUTION UPON LIQUIDATION. In the event of a voluntary or
     involuntary liquidation, dissolution or winding-up of the Corporation, the
     holders of each class of Common Stock shall be entitled to share in the
     distribution of any remaining assets available for distribution to the
     holders of Common Stock ratably in proportion to the number of shares of
     all classes of Common Stock then issued and outstanding as though all such
     shares were of a single class.

          C.   CORPORATE EVENT. There shall be no increase, decrease or other
     alteration of the issued and outstanding shares of any class of Common
     Stock of the Corporation by or as a result of any stock split, stock
     dividend, combination of shares, recapitalization, reclassification,
     merger, consolidation, sale of all or substantially all assets of the
     Corporation, reorganization, liquidation, dissolution or other similar
     corporate transaction ("Corporate Event") unless at the same time the
     shares of the other class or classes of Common Stock then issued and
     outstanding are also increased, decreased or otherwise altered, as the case
     may be, in the same manner and to the same extent. Without limiting the
     generality of the foregoing, the number of shares of each class of Common
     Stock issued and outstanding immediately following any such Corporate Event
     shall bear the same ratio to the number of shares of that class of Common
     Stock issued and outstanding immediately prior to such Corporate Event as
     the number of shares of each other class of Common Stock issued and
     outstanding immediately following such Corporate Event shall bear to the
     number of shares of that class of Common Stock issued and outstanding
     immediately prior to such Corporate Event.

          D.   VOTING RIGHTS.

          1.   The holders of Class A Common Stock shall be entitled to one vote
     per share in voting or consenting on the election of directors and for all
     other corporate purposes to the extent authorized by law.

          2.   The holders of Class B Common Stock shall not be entitled to vote
     at any meeting of stockholders or to express consent or dissent to any
     corporate action taken without a meeting (including, without limitation,
     any election or removal of the directors of the Corporation) except to the
     extent required by Delaware law and the Class B Common Stock shall not be
     included in determining the number of shares voting or consenting or
     entitled to vote or consent on such matters except to the extent required
     by Delaware law.

<PAGE>

          Nothing in this Article Fourth shall be construed to impair or limit
     the right of any member of the Purchaser Group (as hereinafter defined) to
     give or withhold any required consent with respect to any corporation
     action or matter pursuant to the terms of any stockholders agreement or
     other agreement among the Corporation and all or any of the stockholders
     thereof or among all or any of such stockholders.

          3.   The holders of shares of Class C Common Stock shall be entitled
     to one vote per share in voting or consenting on the election of directors
     and for all other purposes with respect to which the holders of shares of
     Class A Common Stock are entitled to vote or consent. In addition, the
     holders of shares of Class C Common Stock shall be entitled to vote for and
     elect, as a class, one Class C director, who shall have 51% of the total
     voting power of the Board of Directors of the Corporation, provided that
     during any period in which either (a) as provided in Section 1.6 of the
     Certificate of Designations of the Senior Preferred Stock, a director
     elected by the holders of Senior Preferred Stock and having 51% of the
     total voting power of the Board of Directors shall have been elected and
     the right of the holders of Senior Preferred Stock to elect such director
     shall be continuing or (b) as provided in Paragraph 4 of this Subdivision
     D, a Triggering Event has occurred and is continuing resulting in the
     director elected by the holders of Class D Common Stock having 51% of the
     total voting power of the Board of Directors, the vote of the director
     elected by the Class C Common Stock shall not constitute the vote of 51% of
     the directors but such Class C director shall have one vote on all matters
     to come before the Board of Directors of the Corporation. At any time that
     the conditions described in clauses (a) and (b) of this Paragraph 3 shall
     no longer exist, the director elected by the holders of Class C Common
     Stock shall again have 51% of the voting power of the Board of Directors of
     the Corporation. The right of the holders of Class C Common Stock to elect
     or remove a member of the Board of Directors as provided in this Paragraph
     3 may be exercised by Class C Common Stock at a meeting of such holders
     called by the holders of at least ten percent of the outstanding Class C
     Common Stock upon the minimum notice required by law for special meetings
     of stockholders or by written consent of the holders of Class C Common
     Stock in the manner provided under the Delaware General Corporation Law.

          4.   The holders of shares of Class D Common Stock shall be entitled
     to one vote per share in voting or consenting on the election of directors
     and for all other purposes with respect to which the holders of shares of
     Class A Common Stock are entitled to vote or consent. In addition, upon the
     occurrence and during the continuance of a Triggering Event, the number of
     directors constituting the whole Board of Directors shall be increased by
     one and the holders of Class D Common Stock shall be entitled to vote for
     and elect as a class one director who shall have 51% of the voting power of
     the Board of Directors of the Corporation, provided that (i) at such time
     as no Triggering Event shall be continuing, or (ii) during any period in
     which, as provided for in Section 1.6 of the Certificate of Designations of
     the Senior Preferred Stock, a director elected by the holders of Senior
     Preferred Stock and having 51% of the total voting power of the Board of
     Directors shall have been elected and the right of the holders of Senior
     Preferred Stock to elect such director shall be continuing, the vote of the
     director elected by the Class D Common Stock shall not constitute the vote
     of 51% of the directors but such director shall have one vote on all
     matters to come before the Board of Directors of the

<PAGE>

     Corporation. At any time that a Triggering Event shall no longer exist, the
     Board of Directors shall automatically be reduced by one director and the
     term of the director elected by the holders of Class D Common Stock shall
     terminate. The right of the holders of Class D Common Stock to elect or
     remove a member of the Board of Directors may be exercised by holders of
     Class D Common Stock at a meeting of such holders called by any one of them
     upon the minimum notice required by law for special meetings of
     stockholders or by written consent of the Class D Stockholders in the
     manner provided under the Delaware General Corporation Law.

          5.   Notwithstanding any provision of this Subdivision D, without the
     affirmative vote or prior written consent of the holders of a majority of
     the outstanding shares of each of Class B, Class C and Class D Common
     Stock, voting or consenting as a separate class, the Corporation shall not
     (i) merge with or into, or consolidate with, any other corporation if,
     under the terms pursuant to which such merger or consolidation is to be
     effected, (ii) the holders of such class of Common Stock would receive
     consideration in exchange for each share of such stock outstanding
     immediately prior to such merger or consolidation that is less in amount
     than, or different in form from, the consideration to be received in
     connection with such merger or consolidation by the holders of any other
     class of Common Stock in exchange for each share of such stock outstanding
     immediately prior to such merger or consolidation (provided that non-voting
     securities rather than voting securities may be issued to holders of Class
     B Common Stock without entitling such holders to the class vote provided
     for in Subdivision (D)(5) herein) or (x) the holders of such class of
     Common stock would receive any consideration (whether in the form of cash,
     property or securities) in exchange for the shares of such class of Common
     Stock held by them immediately prior to such merger or consolidation and
     any holder of any other class of Common Stock would retain the shares of
     such stock held by it immediately prior to such merger or consolidation,
     (ii) effectuate any amendment to, or modification or waiver of, any
     provision of the Certificate of Incorporation of the Corporation, as
     amended, that alters or changes adversely the powers, preferences or rights
     of the shares of such class of Common Stock (including, without limitation,
     any provision of this subdivision D or of paragraph 4 of Subdivision E of
     this Part II), or (iii) effectuate any amendment to, or modification or
     waiver of, any provision of the By-Laws of the Corporation that has any
     such effect.

          E.   CONVERSION RIGHTS.

          1.   Immediately upon the transfer of any shares of Class B Common
     Stock to any Person other than an Affiliate of the holder of such shares,
     such shares shall, without any action on the part of the holder thereof, be
     converted into the same number of shares of Class A Common Stock as the
     number of shares of Class B Common Stock so being transferred. Upon the
     surrender of any certificates which prior to the transfer thereof
     represented shares of Class B Common Stock for registration of transfer,
     (a) the Corporation shall issue one or more new certificates, in such
     denomination or denominations as may be requested, for the same aggregate
     number of shares of Class A Common Stock represented by the certificates so
     surrendered, and registered as the holder thereof may request and (b) the
     rights of the holder of such shares of Class B Common Stock shall cease
     with respect to the number of shares so transferred and the

<PAGE>

     Person or Persons in whose name or names the certificates for shares of
     Class A Common Stock are to be issued upon such transfer shall be deemed to
     have become the holder or holders of record of the shares of Class A Common
     Stock represented thereby. Notwithstanding the foregoing, any holder of
     Class B Common Stock or the transferee of such holder may waive, in a
     writing delivered to the Corporation at the time of any transfer of shares
     to any Person other than an Affiliate of such holder, the requirement that
     such shares of Class B Common Stock be converted into shares of Class A
     Common Stock pursuant to this paragraph 1 and may retain such shares as
     Class B Common Stock. For purposes of this paragraph 1, the transfer of
     shares of Class B Common Stock shall not be determined to occur until the
     transfer is registered on the stock transfer books of the Corporation.

          2.   Upon the sale of shares of Class B, Class C or Class D Common
     Stock pursuant to an effective registration statement filed under section 5
     the Securities Act of 1933, as amended (the "Securities Act"), each share
     of Class B, Class C or Class D Common Stock sold pursuant to such
     registration statement shall, without any action on the part of the holder
     thereof, be converted into a share of Class A Common Stock. Upon the
     surrender of any certificate or certificates which prior to the registered
     sale thereof represented shares of Class B, Class C or Class D Common
     Stock, (a) the Corporation shall issue one or more new certificates, in
     such determinations as may be requested, for the same aggregate number of
     shares of Class A Common Stock represented by the certificate or
     certificates so surrendered, and registered as the purchaser of such shares
     may request and (b) the rights of the holder of such shares of Class B,
     Class C or Class D Common Stock shall cease with respect to the number of
     shares so sold and the Person or Persons in whose name or names the
     certificates for shares of Class A Common Stock are to be issued upon such
     sale shall be deemed to have become the holder or holders of record of the
     shares of Class A Common Stock represented thereby.

          3.   Immediately upon the transfer or issue of any shares of Class A
     Common Stock to any Person who is a holder of Class B Common Stock, such
     shares of Class A Common Stock shall, without any action on the part of the
     holder thereof, be converted into the same number of shares of Class B
     Common Stock as the number of shares of Class A Common Stock so being
     transferred. Upon the surrender of any certificates, for registration of
     transfer, which prior to the transfer thereof represented shares of Class A
     Common Stock, (a) the Corporation shall issue one or more new certificates,
     in such denomination or denominations as may be requested, for the same
     aggregate number of shares of Class B Common Stock represented by the
     certificate or certificates so surrendered, and registered as the purchaser
     of such shares may request and (b) the rights of the holder of such shares
     of Class A Common Stock shall cease with respect to the number of shares so
     sold and the Person or Persons in whose name or names the certificates for
     shares of Class B Common Stock are to be issued upon such sale shall be
     deemed to have become the holder or holders of record of the shares of
     Class B Common Stock represented thereby.

          4.   The Corporation shall at all times reserve and keep available out
     of its authorized but unissued shares of Class A Common Stock, or its
     treasury shares, solely for the purpose of issue upon the conversion of the
     Class B, Class C or Class D Common

<PAGE>

     Stock as provided in this Subdivision E, such number of shares of Class A
     Common Stock as are then issuable upon the conversion of all outstanding
     shares of Class B, Class C or Class D Common Stock. The Corporation shall
     at all times reserve and keep available out of its authorized but unissued
     shares of Class B Common Stock, or its treasury shares, solely for the
     purpose of issue upon the conversion of the Class A Common Stock as
     provided in this subdivision E, such number of shares of Class B Common
     Stock as are then issuable upon the conversion of all outstanding shares of
     Class A Common Stock. The Corporation covenants that all shares of Class A
     Common Stock and Class B Common Stock which are issuable upon conversion
     shall, when issued, be duly and validly issued, fully paid and
     nonassessable and free from all liens and charges. The Corporation shall
     take all such actions as may be necessary to assure that all such shares of
     Class A Common Stock and Class B Common Stock may be so issued without
     violation of any law or any regulation, rule or other requirement of any
     governmental authority applicable to the corporation or any requirement of
     any domestic securities exchange upon which shares of Class A Common Stock
     or Class B Common Stock may be listed. The Corporation shall not take any
     action which would affect the number of shares of Class A Common Stock or
     Class B Common Stock outstanding or issuable for any purposes unless
     immediately following such action the Corporation would have authorized but
     unissued shares of Class A Common Stock and Class B Common Stock, or
     treasury shares, not then reserved or required to be reserved for any
     purpose other than the purpose of issue upon conversion of Class A Common
     Stock or Class A Common Stock, as the case may be, sufficient to meet the
     reservation requirements of the first two sentences of this paragraph 4.

          5.   If any shares of Class A Common Stock or Class B Common Stock
     required to be reserved for purposes of conversion hereunder require,
     before such shares may be issued upon conversion, registration with or
     approval of any governmental authority under any federal or state law
     (other than any registration under the Securities Act or any state
     securities law required by reason of any transfer involved in such
     conversion), or listing on any domestic securities exchange, the
     Corporation shall, at its expense and as promptly as possible, use its best
     efforts to cause such shares to be duly registered or approved or listed,
     as the case may be.

          6.   The issue of certificates for shares of Class A Common Stock upon
     conversion of shares of Class B, Class C or Class D Common Stock and
     certificates for shares of Class B Common Stock upon conversion of shares
     of Class A Common Stock shall be made without charge to the holders of such
     shares for any issue tax in respect thereof or other costs incurred by the
     Corporation in connection with such conversion and the related issue of
     shares of Class A Common Stock or Class B Common Stock, as the case may be;
     PROVIDED that the Corporation shall not be required to pay any tax which
     may be payable in respect of any transfer involved in the issue and
     delivery of any certificate in a name other than that of the holder of the
     Class B, Class C or Class D Common Stock converted or the holder of the
     Class A Common Stock converted, as the case may be.

          7.   Any holder of Class A Common Stock Which is also a holder of
     Class B Common Stock shall be entitled at any time and from time to time to
     convert any shares

<PAGE>

     of Class A Common Stock held by it into an equal number of shares of Class
     B Common Stock upon the surrender of the certificate or certificates
     representing the shares of Class A Common Stock to be converted at the
     principal office of the Corporation, together with written notice by such
     holder stating that such holder desires to convert the shares of Class A
     Common Stock represented by such certificate or certificates into shares of
     Class B Common Stock. Promptly after such surrender and receipt of such
     written notice, the Corporation will issue and deliver in accordance with
     such instructions the certificate or certificates for the shares of Class B
     Common Stock issuable upon such conversion. In case less than all the
     shares represented by any such certificate are to be converted, a new
     certificate shall be issued to such holder representing the shares not to
     be converted, without cost to such holder.

          F.   PERMITTED REDEMPTIONS.

          Notwithstanding any provisions of this Part II of Article Fourth, the
Corporation shall be permitted to redeem shares of Common Stock at such time and
for such consideration as is set forth in the securities Purchase Agreement.

          G.   DEFINITIONS.

          An used in this Part II of Article Fourth, the following terms shall
have the following respective meanings:

          "AFFILIATE" means a Person that directly or indirectly, through one or
     more intermediaries, controls or is controlled by or is under common
     control with another Person and shall include any portfolio or investment
     fund of which such other Person is the sole investment advisor. The term
     "control" means possession, directly or indirectly, of the power to direct
     or cause the direction of the management and policies of a Person, whether
     through the ownership of voting securities, by contract or otherwise.

          "PURCHASER GROUP" means collectively Jackson National Life Insurance
     Company and its successors and assigns.

          "PERSON" means any individual, firm, corporation, business enterprise,
     trust, association, joint venture, partnership, any foreign, federal,
     state, municipal or other government, or any department, commission, board,
     bureau, agency, public authority or instrumentality thereof, or any court
     or arbitrator or other entity, whether acting in an individual, fiduciary
     or other capacity.

          "SECURITIES PURCHASE AGREEMENT" shall mean the Securities Purchase
     Agreement among the Corporation, FMCAN Acquisition Corp, and the purchasers
     of securities thereunder, pursuant to which Class A Common Stock, Class B
     Common Stock, Class D Common Stock and certain other securities are issued,
     as from time to time amended.

          "TRIGGERING EVENT" shall mean a Triggering Event as defined in the
     Securities Purchase Agreement, unless waived.

<PAGE>

          THIRD: The Corporation bas not received any payment for any of its
     stock. This amendment to the Certificate of Incorporation of the
     Corporation has been duly adopted in accordance with Section 241 of the
     General Corporation Law of Delaware.

<PAGE>

          IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment as of the 28th day of October, 1991.

                                        FANNIE MAY HOLDINGS, INC.

                                        By: /s/ Adam E. Max
                                            ------------------------------------
                                            Adam E. Max, Vice President

ATTEST:

/s/ Herbert B. Max
---------------------------------------
Herbert B. Max, Assistant Secretary

1498G/1-11

<PAGE>

                            CERTIFICATE OF CORRECTION
                                     OF THE
                            CERTIFICATE OF AMENDMENT
                                     OF THE
                          CERTIFICATE OF INCORPORATION
                                       OF
                            FANNIE MAY HOLDINGS, INC.

                       (PURSUANT TO SECTION 103(f) OF THE
                           GENERAL CORPORATION LAW OF
                             THE STATE OF DELAWARE)

          Fannie May Holdings, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify that the Certificate of Amendment of the Certificate of
Incorporation filed on October 29, 1991 (the "Certificate of Amendment")
contained an inaccurate record.

          Paragraph 1 of ARTICLE SECOND of the Certificate of Amendment provided
as follows: "The Certificate of Incorporation of the Corporation is hereby
amended by deleting ARTICLE FOURTH thereof and substituting in lieu thereof the
following:

               FOURTH: CAPITAL STOCK. The total number of shares of all classes
          of stock which the Corporation shall have authority to issue is 8,000
          shares of capital stock, consisting of (a) 2,500 shares of Preferred
          Stock, without par value ("Preferred Stock"), (b) 2,000 shares of
          Class A Common Stock, $.01 par value per share ("Class A Common
          Stock"), (c) 2,000 shares of Class B Common Stock, $.01 par value per
          share ("Class B Common Stock"), (d) 1,000 shares of Class C Common
          Stock, $.01 par value per share ("Class C Common Stock") and (e) 1,000
          shares of Class D Common Stock, $.01 par value per share ("Class D
          Common Stock"), (the Class A Common Stock, Class B Common Stock, Class
          C Common Stock and Class D Common Stock are referred to herein
          collectively as the "Common Stock")."

          Paragraph 1 of ARTICLE SECOND of the Certificate of Amendment should
have read as follows: "The Certificate of Incorporation of the Corporation is
hereby amended by deleting ARTICLE FOURTH thereof and substituting in lieu
thereof the following:

<PAGE>

               FOURTH: CAPITAL STOCK. The total number of shares of all classes
          of stock which the Corporation shall have authority to issue is 8,500
          shares of capital stock, consisting of (a) 2,500 shares of Preferred
          Stock, without par value ("Preferred Stock"), (b) 2,000 shares of
          Class A Common Stock, $.01 par value per share ("Class A Common
          Stock"), (c) 2,000 shares of Class B Common Stock, $.0l par value per
          share ("Class B Common Stock"), (d) 1,000 shares of Class C Common
          Stock, $.01 par value per share ("Class C Common Stock") and (e) 1,000
          shares of Class D Common Stock, $.01 par value per share ("Class D
          Common Stock"), (the Class A Common Stock, Class B Common Stock, Class
          C Common Stock and Class D Common Stock are referred to herein
          collectively as the "Common Stock")."

          IN WITNESS THEREOF, said Fannie May Holdings, Inc., has caused this
Certificate to be signed by Adam E. Max, its Vice President, and attested by
Herbert B. Max, its Assistant Secretary, as of this 30th day of October, 1991.

                                        FANNIE MAY HOLDINGS, INC.

                                        By: /s/ Adam E. Max
                                            ------------------------------------
                                            Adam E. Max
                                            Vice President

/s/ Herbert B. Max
----------------------------------
Herbert B. Max
Assistant Secretary

7260c

<PAGE>

                              AMENDED AND RESTATED
                           CERTIFICATE OF DESIGNATION
                                       OF
                            5% SENIOR PREFERRED STOCK
                                       OF
                            FANNIE MAY HOLDINGS, INC.

                     Pursuant to Section 151 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 5% Senior 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 5%
Senior Preferred Stock, no par value, of the Company (such series being
hereinafter sometimes called the Senior 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 as set forth in that certain
Certificate of Designation dated October 28, 1991 (the "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; and

          WHEREAS, the Company desires to amend certain provisions of the
Certificate of Designation to incorporate changes to, among other things, extend
the mandatory redemption date, and modify the required redemption payments, of
the Senior Preferred Stock; and

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

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

<PAGE>

     1.1  DESIGNATION AND AMOUNT

          The shares of such series shall be designated 5% Senior Preferred
     Stock and the number of shares constituting such series shall initially be
     1,500.

     1.2  DIVIDENDS

          The holders of shares of Senior 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 $500
     per share per annum, payable annually on the last business day of the month
     of August in each year, (each a "Dividend Payment Date") commencing August
     31, 1992 to Stockholders of record as of each such date until August 31,
     2000 (the "Final Dividend Date").

          At the option of the Company and except as provided below, 50% 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 Senior
     Preferred Stock (the "Additional Shares") on any or all Dividend Payment
     Dates. To the extent dividends are paid in Additional Shares, such
     Additional Shares shall be valued at $10,000 per share with a liquidation
     value of $10,000 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 to the extent of 50% of such dividends in
     Additional Shares in lieu of cash on any or all Dividend Payment Dates.

          Dividends shall accrue until the Final Dividend Date from the date of
     original issue of the Senior Preferred Stock, except that dividends on
     Additional Shares shall accrue from the date such Additional Shares are
     issued. 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, to the extent of 50% of such
     accumulated dividends, 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 Senior Preferred Stock held,
     or deemed to be held, of record by each holder) then such amount shall be
     paid in cash based on a value of $10,000 per share or shall be paid in
     fractions of Additional Shares. Notwithstanding anything herein to the
     contrary, no dividends shall accrue and no dividends shall cumulate
     subsequent to the Final Dividend Date.

          No dividend may be paid or declared and set apart for payment on any
     share of Senior Preferred Stock unless at the same time a ratable dividend
     in cash

<PAGE>

     or Additional Shares is paid or set apart for payment on all shares of
     Senior 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 (as defined below), the holders
     of shares of Senior Preferred Stock not then redeemed shall be entitled to
     receive payment of $10,000 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 Senior Preferred Stock shall be insufficient
     to pay in full the respective preferential amounts on shares of Senior
     Preferred Stock, then such assets, or the proceeds thereof, shall be
     distributed among the holders of Senior 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, such holders will not be entitled to
     any further participation in any distribution of assets of the Company. For
     the purposes of this paragraph 1.3, none of the merger or the consolidation
     of the Company into or with another corporation or the merger or
     consolidation of any other corporation 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 Senior 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)  [Intentionally Deleted]

               (b)  Shares of Senior Preferred Stock not theretofore redeemed,
     subject to the applicable provisions of law, shall be redeemed by payment
     of cash (each a "Redemption Payment") in the amounts and on the dates (each
     a "Redemption Date") as specified below:

<PAGE>

<TABLE>
<CAPTION>
                                                                Redemption
          Redemption Date                                         Payment
          ---------------                                         -------
<S>                                                             <C>
          January 15, 2002.............................         $3,000,000
          January 15, 2003.............................          3,000,000
          January 15, 2004.............................          3,000,000
          January 15, 2005.............................          2,000,000
          January 15, 2006.............................          2,500,000
</TABLE>

     Any Redemption Payment not paid on or prior to the respective Redemption
     Date shall bear interest at 8.0% per annum until paid. Each Redemption
     Payment (including any prepayment made in accordance with the following
     sentence) shall be applied to redeem shares of Senior Preferred Stock, at
     the Redemption Price (as defined below) per share, on a pro rata basis,
     among all holders of shares of Senior Preferred Stock. The Company may at
     any time, at the Company's sole option, redeem shares of Senior Preferred
     Stock not theretofore redeemed in advance of the schedule described above
     by paying the Redemption Price therefor; provided, if such full redemption
     occurs on or prior to December 31, 2004, the total amount to be paid by the
     Company in redemption of all such shares of Senior Preferred Stock shall
     equal $13,000,000 less the aggregate redemption payments made prior to the
     date thereto, and if such full redemption occurs after December 31, 2004,
     the total amount to be paid by the Company shall equal $13,500,000 less the
     aggregate redemption payments made prior to the date thereto. Any payment
     made in advance of a Redemption Date shall be applied to the then remaining
     Redemption Payments in chronological order.

               The "Redemption Price" shall equal (i) either (A) if with respect
     to a redemption in full on or prior to December 31, 2004 of all shares of
     Senior Preferred Stock then outstanding, $13,000,000 less the aggregate
     amount of all redemption payments made prior to such date or (B) if with
     respect to any other redemption, $13,500,000 less the aggregate amount of
     all redemption payments made prior to such date, in either case, divided by
     (ii) the total number of shares of Senior Preferred Stock outstanding
     immediately prior to the date of such redemption.

               (c)  In the event that (i) the Company shall fail to discharge
     its obligation to redeem all shares of Senior Preferred Stock to be
     redeemed pursuant to this Section 1.5 within 30 days of the designated
     Redemption Date, (ii) any Change of Control, as defined below, shall occur,
     or (iii) the Company shall violate its obligations set forth in clause (g)
     of this paragraph 1.5, all Redemption Payments not yet made shall
     immediately be due and payable to the holders of shares of Senior Preferred
     Stock.

<PAGE>

               (d)  As used in this paragraph 1.5, the term "Change in Control"
     shall mean any sale, transfer, issuance or redemption or series of sales,
     transfers, issuances or redemptions (or any combination thereof) of shares
     of the Company's Common Stock, by the holders thereof or the Company which
     results in any person or group of affiliated persons (other than (i) the
     owners of the Company's capital stock as of the date hereof and (ii)
     stockholders, partners, members, managers, affiliates, trustees or officers
     of such owners) owning more than 50% of the Common Stock of the Company.

               (e)  The Company shall cause to be mailed to each of the holders
     of shares of Senior 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 each redemption date, a notice stating
     the terms of such redemption. 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.

               (f)  On or after each redemption date (including each Redemption
     Date), the holders of shares of Senior 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 each redemption date (including each Redemption Date), all rights of
     the holders of such redeemed shares of Senior Preferred Stock, except the
     right to receive the redemption price 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.

               (g)  If and so long as the Company's obligations with respect to
     the redemption of the Senior Preferred Stock shall not fully be discharged,
     the Company shall not, directly or indirectly, make any cash payments to
     any holder (or any affiliate thereof) of, or declare or pay any cash
     dividend or make any distributions on, or purchase, redeem or retire, or
     satisfy any mandatory or optional redemption, sinking fund or other similar
     obligation in respect of, any Junior Securities or warrants, rights or
     options exercisable for any such Junior Securities (other than dividends or
     distributions payable solely in the same class or series of such Junior
     Securities, as the case may be, to holders thereof); provided, however,
     that nothing contained herein shall prohibit the Company from taking any
     such action with respect to Common Stock (or stock appreciation rights or
     rights or options exercisable for Common Stock) issued or granted to
     officers or other employees of the Company or any of its subsidiaries
     pursuant to any employee benefit plan of the Company as in effect on June
     28, 2001, but only if such action is in accordance with and pursuant to the
     provisions of such plan;

<PAGE>

     and, provided further, that the Company may pay (i) salaries, bonuses,
     expense reimbursements and other similar payments to its employees in the
     ordinary course of business, (ii) directors' fees and expense
     reimbursements, (iii) indemnification obligations owing by the Company to
     its directors and officers (whether under the Company's organizational
     documents, indemnification agreements or applicable law) and (iv) amounts
     payable under the Company's Management Consulting Agreement with TJC
     Management Corp., as in effect on the date hereof.

     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 Senior Preferred Stock shall not be entitled to vote on any matter
     submitted to a vote of stockholders. In the event that the Company fails to
     redeem the shares of Senior Preferred Stock then subject to redemption in
     accordance with paragraph 1.5, whether or not such payment is legally
     permissible, the number of directors constituting the Board of Directors
     shall automatically be increased by one director and the holders of Senior
     Preferred Stock shall have the right, voting separately as a single class
     with each share being entitled to one vote, to elect an individual to fill
     such newly created directorship and thereafter to fill any vacancy in such
     directorship. The director elected by the holders of Senior Preferred Stock
     shall have 51% of the total voting power of the Board of Directors. At any
     time that the conditions entitling the holders of Senior Preferred Stock to
     elect such director shall no longer exist, the Board of Directors shall
     automatically be reduced in size by one director and the term of the
     director elected by the holders of Senior Preferred Stock shall
     automatically terminate. The right of the holders of Senior Preferred Stock
     to elect an additional member of the Board of Directors shall continue
     until such time as all shares of Senior Preferred Stock required to be
     redeemed on the applicable Redemption Date shall have been redeemed. The
     right of the holders of Senior Preferred Stock to elect an additional
     member of the Board of Directors may be exercised by the holders of a
     majority of the outstanding shares of Senior Preferred Stock by action
     taken in writing or at a meeting of such holders called by any one of them
     upon the minimum notice required by law for special meetings 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 Senior Preferred Stock (voting as a class) at a
     meeting of the holders of Senior 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 Senior Preferred
     Stock with respect to any dividend or distribution or any liquidation,
     distribution of assets, dissolution or winding-up of the Company, 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 Senior Preferred Stock; provided, however, that any such amendment
     that reduces

<PAGE>

     the amount of dividend payable on or the liquidation or redemption price of
     shares of Senior Preferred Stock shall require the affirmative vote at a
     meeting called for such purpose, or written consent of, the holder of each
     share of Senior Preferred Stock.

          So long as at least 100 shares of Senior Preferred Stock are
     outstanding, the Company will furnish to the holders of such Senior
     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 1,000 shares of Senior Preferred
     Stock, together with such number of Additional Shares as may be issued in
     lieu of cash dividends in accordance with paragraph 1.2. The Company may
     issue fractional shares of Senior Preferred Stock.

     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 Senior 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.

               (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, the Junior
     Class A PIK Preferred Stock and the Junior Class B PIK Preferred Stock of
     the Company or any other series of stock issued by the Company ranking
     junior to the Senior 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.

               (d)  Terms used herein and not otherwise defined shall have the
     same meanings specified in the Certificate of Incorporation as amended from
     time to time.

<PAGE>

          IN WITNESS WHEREOF, this Amended and Restated Certificate has been
executed and attested by the undersigned on June 28, 2001.

                                        /s/ Ted A. Shepherd
                                        ----------------------------------------
                                        Ted A. Shepherd, President

Attest:

/s/ Richard J. Anglin
----------------------------------
Richard J. Anglin, Secretary

<PAGE>

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

                     Pursuant to Section 151 of the Delaware
                             General Corporation Law

          The undersigned, Vice President and Assistant 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 creating a
series of Preferred Stock of the Company designated as the Junior Class A PIK
Preferred Stock:

               RESOLVED, by the Board of Directors of Fannie May Holdings, Inc.,
          a Delaware corporation (the "Company"), that pursuant to authority
          expressly granted to and vested in the Board of Directors by the
          provisions of the Certificate of Incorporation of the Company, the
          Board of Directors hereby creates a series of authorized Preferred
          Stock, without par value, of the Company (such series being
          hereinafter sometimes called the Junior Class A PIK Preferred Stock),
          and authorizes the issuance thereof, and hereby fixes 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
          (in addition to the designation, preferences and relative,
          participating and other special rights, and the qualifications,
          limitations or restrictions thereof, set forth in the Certificate of
          Incorporation of the Company, which are applicable to the Preferred
          Stock of all series) 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

<PAGE>

     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.

          At the option of the Company and except as provided below, 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") on any or all Dividend
     Payment Dates. 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.

          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. 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 Prefer Stock held, or
     deemed to be held, of record by each holder) then such amount shall be paid
     in cash or shall be paid in fractions of Additional Shares based on a value
     of $25,000 per share.

          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

<PAGE>

     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
     data 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 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 Corporation
     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

<PAGE>

     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 the Dividend
     Payment Date occurring in 2001 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 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

<PAGE>

     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, 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.

               (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,

<PAGE>

     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.

     IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned on October 28, 1991.

                                        /s/ Adam E. Max
                                        ----------------------------------------
                                        Vice President

Attest:

/s/ Herbert B. Max
----------------------------------
     Assistant Secretary

6999c

<PAGE>

                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

     Fannie May Holdings, Inc., a Delaware corporation (the "Corporation"), does
hereby certify as follows:

     FIRST: By Unanimous Written Consent, the Corporation's Board of Directors
adopted resolutions approving a proposed amendment (the "AMENDMENT") to the
Corporation's Certificate of Designation of Junior Class A PIK Preferred Stock.
The resolutions approving the Amendment are as follows:

          RESOLVED FURTHER, that the Corporation's Certificate of Incorporation
     be amended by amending Paragraph 1.5(b) of the Certificate of Designation
     of Junior Class A PIK Preferred Stock so that, as amended, Paragraph 1.5(b)
     thereof shall be and read as follows:

               "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."; and

          RESOLVED FURTHER, that the officers of the Corporation are, and each
     of them hereby is, authorized and directed to take or cause to be taken all
     such further actions and to execute and deliver or cause to be executed and
     delivered such other instruments and documents, in the name and on behalf
     of the Corporation, and to pay all fees and expenses as they shall deem
     necessary, proper or advisable in order to carry out fully the purpose and
     intent of the foregoing resolution.

     SECOND: By Unanimous Written Consent, the holders of all of the outstanding
shares of Junior Class A PIK Preferred Stock of the Corporation approved the
Amendment.

     THIRD: The Amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.

<PAGE>

     IN WITNESS WHEREOF, the undersigned has caused this certificate to be
signed as of the 28th day of June, 2001.

                                        FANNIE MAY HOLDINGS, INC.

                                        By: /s/ Ted A. Shepherd
                                            ------------------------------------
                                        Name:   Ted A. Shepherd
                                              ----------------------------------
                                        Title:  President
                                               ---------------------------------

ATTEST:

By: /s/ Richard J. Anglin
    ------------------------------
Name:   Richard J. Anglin
      ----------------------------
Title:  Vice President and CFO
       ---------------------------

<PAGE>

                           CERTIFICATE OF DESIGNATION
                                       OF
                       JUNIOR CLASS B PIK PREFERRED STOCK
                                       OF
                            FANNIE MAY HOLDINGS, INC.

                     Pursuant to Section 151 of the Delaware
                             General Corporation Law

          The undersigned, Vice President and Assistant 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 creating a
series of Preferred Stock of the Company designated as the Junior Class B PIK
Preferred Stock:

               RESOLVED, by the Board of Directors of Fannie May Holdings, Inc.,
          a Delaware corporation (the "Company"), that pursuant to authority
          expressly granted to and vested in the Board of Directors by the
          provisions of the Certificate of Incorporation of the Company, the
          Board of Directors hereby creates a series of authorized Preferred
          Stock, without par value, of the Company (such series being
          hereinafter sometimes called the Junior Class B PIK Preferred Stock),
          and authorizes the issuance thereof, and hereby fixes 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
          (in addition to the designation, preferences and relative,
          participating and other special rights, and the qualifications,
          limitations or restrictions thereof, set forth in the Certificate of
          Incorporation of the Company, which are applicable to the Preferred
          Stock of all series) as follows:

     1.1  DESIGNATION AND AMOUNT

          The shares of such Series shall be designated Junior Class B PIK
     Preferred Stock and the number of shares constituting such series shall
     initially be 62.

<PAGE>

     1.2  DIVIDENDS

          The holders of shares of Junior Class B 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 15, 1992 to Stockholders of record as of
     each such date until the Junior Class B PIK Preferred Stock is redeemed as
     hereinafter provided.

          All of such dividends shall be paid, instead of in cash, in whole or
     in part on declaration of the Board of Directors, in additional shares of
     Junior Class B PIK Preferred Stock (the "Additional Shares") on any or all
     Dividend Payment Dates. 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.

          Dividends shall accrue from the date of original issue of the Junior
     Class B PIK Preferred Stock, except that dividends on Additional Shares
     shall accrue from the date such Additional Shares are issued. 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 B PIK Preferred Stock held,
     or deemed to he held, of record by each holder) then such amount shall be
     paid in fractions of Additional Shares based on a value of $25,000 per
     share.

          No dividend may be paid or declared and set apart for payment on any
     share of Junior Class B 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 Senior Preferred Stock and 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

<PAGE>

     holders of shares of any Junior Securities but after all the Senior
     Preferred Stock and Junior Class A PIK Preferred stock shall have been
     redeemed in cash in full, the holders of shares of Junior Class B 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 B PIK Preferred Stock shall be
     insufficient to pay in full the respective preferential amounts on shares
     of Junior Class B PIK Preferred Stock, then such assets, or the proceeds
     thereof, shall be distributed among the holders of Junior Class B 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 and then the Junior Class A PIK
     Preferred Stock are entitled and then payment of the full amount of the
     liquidation preference to which the holders of the Junior Class B PIK
     Preferred Stock are entitled, the holders of the Junior Class B 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 B 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 and the
     Junior Class A PIK Preferred Stock have theretofore been redeemed in full
     for cash, with all dividends accrued thereon, and such redemption is not
     then prohibited by any agreement to which the Corporation is then a party,
     the shares of Junior Class B PIK Preferred Stock 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 date of
     redemption. If less than all the shares of Junior Class B PIK Preferred

<PAGE>

     Stock are to be redeemed, the shares to be redeemed will be redeemed, at
     the Company's option, (a) by lot or (b) on a pro rata basis.

          (b)  All shares of Junior Class B PIK Preferred Stock not theretofore
     redeemed, shall be redeemed by payment of cash on the Dividend Payment Date
     occurring in 2001 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 B 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 B 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 B
     PIK Preferred Stock, except the right 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 any other provision of the Certificate of
     Incorporation of the Company, the holder of each outstanding share of
     Junior Class B 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 B PIK Preferred Stock (voting as a
     class) at a meeting of the holders of Junior Class B 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,

<PAGE>

     the Junior Class B PIK Preferred Stock with respect to any dividend or
     distribution or any liquidation, distribution of assets, dissolution or
     winding-up of the Company, including without limitation the 1,500 shares of
     Senior Preferred Stock and the 650 shares of Junior Class A PIK Preferred
     Stock, each as described in the respective Certificates of Designation
     dated October 25, 1991 adopted pursuant to Section 151 of the Delaware
     General Corporation Law by the directors of the Company, 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 B PIK Preferred Stock including any such amendment that reduces the
     amount of dividend payable on or the liquidation or redemption price of
     shares of Junior Class B PIK Preferred Stock none of which amendments or
     actions shall require the vote or written consent of, the holders of Junior
     Class B PIK Preferred Stock.

     1.8  ISSUANCE

          The Company will not issue more then 30 shares of Junior Class B 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 B 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 is certain credit agreements,
     indentures and other agreements to which the Company is a party.

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

          "Junior Securities" means, collectively, the Common Stock, $.0l par
     value, of the Company or any other series of stock issued by the Company
     ranking junior to the Junior Class B 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.

<PAGE>

     IN WITNESS THEREOF, this Certificate bas been executed and attested by the
undersigned on October 28, 1991.

                                        /s/ Adam E. Max
                                        ----------------------------------------
                                                  Vice President

Attest:

/s/ Herbert B. Max
----------------------------------
     Assistant Secretary

7078c

<PAGE>

                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

     Fannie May Holdings, Inc., a Delaware corporation (the "Corporation"), does
hereby certify as follows:

     FIRST: By Unanimous Written Consent, the Corporation's Board of Directors
adopted resolutions approving a proposed amendment (the "AMENDMENT") to the
Corporation's Certificate of Designation of Junior Class B PIK Preferred Stock.
The resolutions approving the Amendment are as follows:

          RESOLVED FURTHER, that the Corporation's Certificate of Incorporation
     be amended by amending Paragraph 1.5(b) of the Certificate of Designation
     of Junior Class B PIK Preferred Stock so that, as amended, Paragraph 1.5(b)
     thereof shall be and read as follows:

               "All shares of Junior Class B 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."; and

          RESOLVED FURTHER, that the officers of the Corporation are, and each
     of them hereby is, authorized and directed to take or cause to be taken all
     such further actions and to execute and deliver or cause to be executed and
     delivered such other instruments and documents, in the name and on behalf
     of the Corporation, and to pay all fees and expenses as they shall deem
     necessary, proper or advisable in order to carry out fully the purpose and
     intent of the foregoing resolution.

     SECOND: By Unanimous Written Consent, the holders of all of the outstanding
shares of Junior Class B PIK Preferred Stock of the Corporation approved the
Amendment.

     THIRD: The Amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.

<PAGE>

     IN WITNESS WHEREOF, the undersigned has caused this certificate to be
signed as of the 28th day of June, 2001.

                                        FANNIE MAY HOLDINGS, INC.

                                        By: /s/ Ted A. Shepherd
                                            ------------------------------------
                                        Name:   Ted A. Shepherd
                                              ----------------------------------
                                        Title:  President
                                               ---------------------------------

ATTEST:

By: /s/ Richard J. Anglin
----------------------------------
Name:   Richard J. Anglin
      ----------------------------
Title:  Vice President and CFO
       ---------------------------

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