ARCHIBALD CANDY CORP
EXHIBIT 10.4
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<TYPE>EX-10.4
<SEQUENCE>9
<FILENAME>a2084294zex-10_4.txt
<DESCRIPTION>EXHIBIT 10.4
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                                                                    EXHIBIT 10.4

                                                                       EXHIBIT A

                         UNITED STATES BANKRUPTCY COURT

                              DISTRICT OF DELAWARE


In re                                      )      Chapter 11
                                           )
FANNIE MAY HOLDINGS, INC. and              )
ARCHIBALD CANDY CORPORATION                )      Case No. 02-____(____)
                                           )
                                           )      Jointly Administered
                      Debtors.             )

                      DEBTORS' JOINT PLAN OF REORGANIZATION

YOUNG CONAWAY STARGATT & TAYLOR, LLP              WINSTON & STRAWN
Pauline K. Morgan (No. 3650)                      Matthew J. Botica
M. Blake Cleary (No. 3614)                        Daniel J. McGuire
The Brandywine Bldg.                              35 West Wacker Drive
1000 West Street, 17th Floor                      Chicago, IL 60601-9703
P.O. Box 391                                      T: 312-558-5600
Wilmington, DE  19899-0391                        F: 312-558-5700
T: 302-571-6600
F: 302-571-1253

              Co-Counsel for the Debtors and Debtors in Possession


Dated: June 12, 2002

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                                                                       EXHIBIT A

          Fannie May Holdings, Inc. ("HOLDINGS") and Archibald Candy Corporation
("ARCHIBALD"), the above-captioned debtors and debtors-in-possession, hereby
propose the following Joint Plan of Reorganization pursuant to section 1121 of
the Bankruptcy Code:

                                    ARTICLE 1
                                   DEFINITIONS

          As used in this Plan, the following terms shall have the respective
meanings specified below:

          1.1     "ADMINISTRATIVE CLAIM" shall mean a Claim under section 503(b)
of the Bankruptcy Code that is entitled to priority under section 507(a)(1) of
the Bankruptcy Code, for costs or expenses of administration of the Chapter 11
Cases including, without limitation, any actual and necessary expenses of
operating the business of the Debtors or preserving the Estates, and any and all
fees and expenses of Professionals to the extent allowed by the Bankruptcy Court
under sections 330, 331, or 503 of the Bankruptcy Code.

          1.2     "ALLOWED CLAIM" or "ALLOWED [ ] CLAIM" shall mean: (a) any
Claim, proof of which was filed with this Court on or before the date designated
by the Bankruptcy Court as the last date(s) for filing proofs of claim with
respect to such Claim, or which has been or hereafter is scheduled by the
Debtors as liquidated in amount and not disputed or contingent and which, in
either case, is a Claim as to which no objection to the allowance thereof has
been filed within the applicable period of limitation (if any) for objection to
Claims fixed by the Court, or as to which any objection has been determined by
an order or judgment of the Court (allowing such Claim in whole or in part) that
is no longer subject to appeal or certiorari proceedings, and as to which no
appeal or certiorari proceeding is pending, or (b) a Claim that is allowed (i)
in any contract, instrument, or other agreement entered into and approved in
connection with the Plan, (ii) in a Final Order or (iii) pursuant to the terms
of the Plan. In accordance with 11 U.S.C. Section 502(d), no Claim held by any
party that is subject to a Cause of Action shall be an Allowed Claim or Claims
until such time as the avoidable transfer that is the subject of such Cause of
Action is returned or a Final Order has been entered (x) approving the
compromise and settlement of the Cause of Action or (y) determining that no
avoidable transfer exists.

          1.3     "ARCHIBALD (CANADA)" shall mean Archibald Candy (Canada)
Corporation, guarantor of the New Subordinated Notes.

          1.4     "AVOIDANCE ACTIONS" shall mean causes of action under sections
544, 545, 547, 548, 549, and 550 of the Bankruptcy Code.

          1.5     "BALLOT" shall mean the form or forms that will be distributed
along with the Disclosure Statement to holders of Allowed Claims in classes that
are Impaired under the Plan and entitled to vote, which the holders of Impaired
Claims may use to vote to accept or reject the Plan.

          1.6     "BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of
1978, 11 U.S.C. Sections 101-1330, as now in effect or hereafter amended to the
extent such amendment is applicable to the Chapter 11 Cases.

          1.7     "BANKRUPTCY COURT" shall mean the United States Bankruptcy
Court for the District of Delaware or such other court as may hereafter be
granted primary jurisdiction over the Chapter 11 Cases.

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          1.8     "BANKRUPTCY RULES" shall mean the Federal Rules of Bankruptcy
Procedure effective August 1, 1996 in accordance with the provisions of 28
U.S.C. Section 2075, and the local rules of the Bankruptcy Court, as now in
effect or hereafter amended.

          1.9     "BAR DATE" shall mean the date, if any, designated by the
Bankruptcy Court as the last date for filing proofs of Claim or Interest against
the Debtors.

          1.10    "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or "legal holiday" as such term is defined in Bankruptcy Rule 9006(a).

          1.11    "CASH" shall mean cash and cash equivalents, including, but
not limited to, wire transfers, checks and other readily marketable direct
obligations of the United States of America and certificates of deposit issued
by banks.

          1.12    "CAUSES OF ACTION" shall mean all claims and causes of action
now owned or hereafter acquired by the Debtors, whether arising under any
contract or under the Bankruptcy Code, or other federal or state law, including,
without limitation, causes of action under sections 542, 544, 545, 547, 548,
549, 550, 551, and/or 553 or other sections of the Bankruptcy Code.

          1.13    "CHAPTER 11 CASES" shall mean the above-captioned Chapter 11
Cases pending for the Debtors.

          1.14    "CLAIM" shall mean a claim as defined in section 101 of the
Bankruptcy Code, or any portion thereof.

          1.15    "CLASS" shall mean a category of Claims or Interests which are
substantially similar in nature to each other, as classified pursuant to the
Plan.

          1.16    "COMMITTEE" shall mean any statutory committee appointed in
these Cases pursuant to section 1102 of the Bankruptcy Code.

          1.17    "CONFIRMATION" shall mean the entry of the Confirmation Order
on the docket of the Bankruptcy Court.

          1.18    "CONFIRMATION DATE" shall mean the date of entry of the
Confirmation Order on the docket of the Bankruptcy Court.

          1.19    "CONFIRMATION ORDER" shall mean the order of the Bankruptcy
Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code, as
same may thereafter be modified by the Bankruptcy Court.

          1.20    "CONSENTING NOTEHOLDER THRESHOLD" means Senior Secured
Noteholders holding not less than 66 2/3% in aggregate principal amount of the
Senior Secured Notes.

          1.21    "CONVENIENCE CLASS CLAIMS" shall mean General Unsecured Claims
(i) in the amount of $5,000 or less or (ii) which the holder of such Claim
irrevocably elects on the Ballot to reduce to $5,000.

          1.22    "CREDITOR" shall mean any Person or Entity having a Claim
against either of the Debtors, including without limitation a Claim that arose
on or before the Petition Date or a Claim against the Estates of any kind
specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code.

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          1.23    "DEBTORS" shall mean Archibald Candy Corporation and Fannie
May Holdings, Inc.

          1.24    "DEBTORS-IN-POSSESSION" shall mean the Debtors in the
capacity, and with the status and rights, conferred by sections 1107 and 1108 of
the Bankruptcy Code.

          1.25    "DIP AGENT" shall mean Foothill Capital Corporation, as
administrative agent for the DIP Lenders under the DIP Credit Agreement, and any
successor thereto.

          1.26    "DIP CREDIT AGREEMENT" shall mean that certain Post-Petition
Loan and Security Agreement, dated as of June _, 2002 (as amended) by and among
Archibald Candy Corporation, as Borrower, Holdings and Archibald (Canada) as
Guarantors, the DIP Agent, and the DIP Lenders.

          1.27    "DIP FACILITY CLAIMS" shall mean all Claims of the DIP Lenders
arising from or under the DIP Credit Agreement and the other Post-Petition Loan
Documents (as defined therein), including Claims for fees and expenses of the
Agent (as defined therein), including reasonable fees and expenses of its
professionals.

          1.28    "DIP LENDERS" shall mean the Lenders under the DIP Credit
Agreement.

          1.29    "DISCLOSURE STATEMENT" shall mean the disclosure statement
respecting the Plan, as approved by the Bankruptcy Court as containing adequate
information in accordance with section 1125 of the Bankruptcy Code, all exhibits
and annexes thereto and any amendments or modifications thereof.

          1.30    "DISPUTED CLAIM RESERVE" shall mean a reserve of Cash, New
Subordinated Notes or New Common Stock for the relevant Class, established
herein for, among other things, the payment or other satisfaction of Disputed
Claims that are Allowed after the Effective Date.

          1.31    "DISPUTED CLAIM" or "DISPUTED [_____] CLAIM" shall mean any
Claim (i) as to which an objection has been interposed as of the Effective Date
or any later deadline fixed by the Bankruptcy Court and (ii) which has not been
allowed or disallowed pursuant to a Final Order.

          1.32    "EFFECTIVE DATE" shall mean the date designated by the Debtors
in a notice filed with the Bankruptcy Court, which is at least ten Business Days
and not more than 60 days after the date on which each of the conditions set
forth in Section 9.1 of the Plan have been satisfied or waived (if waivable).

          1.33    "ENTITY" shall have the meaning set forth in section 101 of
the Bankruptcy Code.

          1.34    "ESTATES" shall mean the Debtors' bankruptcy estates created
in the chapter 11 cases pursuant to section 541 of the Bankruptcy Code.

          1.35    "EXCHANGE AGENT" shall mean a bank, trust company or other
Entity appointed by Reorganized Archibald to act as the exchange agent for the
holders of Class 3 Claims and Class 5B Claims.

          1.36    "EXIT FACILITY" shall mean the post confirmation financing
facility to be entered into on the Effective Date by Reorganized Archibald and
the lenders providing such financing, in form and substance satisfactory to the
Consenting Noteholder Threshold.

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          1.37    "EXIT FACILITY COMMITMENT LETTER" shall mean the commitment
letter for the Exit Facility.

          1.38    "FEE CLAIM" shall mean a claim under sections 328, 330(a), 503
or 1103 of the Bankruptcy  Code for the  compensation of a Professional or other
Entity for services rendered or expenses incurred in these Chapter 11 Cases.

          1.39    "FILE", "FILED" or "FILING" shall mean file, filed or filing
with the Bankruptcy Court.

          1.40    "FINAL ORDER" shall mean an order entered by the Bankruptcy
Court or any other court exercising jurisdiction over the subject matter and the
parties, as to which (i) no appeal, certiorari proceeding or other review or
rehearing has been requested or is still pending, and (ii) the time for filing a
notice of appeal or petition for certiorari or further review or rehearing has
expired.

          1.41    "GENERAL UNSECURED CLAIM" shall mean any Claim against the
Debtors, other than an Administrative Claim, Priority Tax Claim, Priority Claim,
DIP Facility Claim, Prepetition Lender Claim, Senior Secured Note Claim, or
Miscellaneous Secured Claim.

          1.42    "IMPAIRED" shall have the meaning set forth in section 1124 of
the Bankruptcy Code.

          1.43    "INDEMNIFICATION OBLIGATIONS" shall mean the obligation of any
of the Debtors to indemnify, reimburse or provide contribution (i) to any
present or former officer, director or employee, or any present or former
professionals, advisors and other agents of the Debtors, including, without
limitation, accountants, auditors, financial consultants, underwriters and
attorneys, whether pursuant to charter, bylaw, contract or statute with respect
to a post-Petition Date occurrence, and (ii) to any present or former officer or
employee of the Debtors whether pursuant to charter, bylaw, contract or statute
with respect to a pre-Petition Date occurrence, provided that the aggregate
amount of Indemnification Obligations payable by Reorganized Archibald pursuant
to clause (ii) shall not exceed $250,000.

          1.44    "INDENTURE" shall mean that certain indenture dated July 2,
1997 (as amended, restated or otherwise modified) under which the Senior Secured
Notes were issued.

          1.45    "INDENTURE TRUSTEE" shall mean The Bank of New York or any
successor serving as indenture trustee under the Indenture.

          1.46    "INTERCOMPANY CLAIMS" shall mean any and all pre- and
post-petition Claims of either Debtor against the other Debtor.

          1.47    "INTEREST" shall mean, as of immediately prior to the
Effective Date, any capital stock or other ownership interest in any of the
Debtors and any option, warrant, or right to purchase, sell, or subscribe for an
ownership interest in, or other equity security of, any of the Debtors,
including the Old Common Stock and the Old Preferred Stock and any and all
redemption, conversion, exchange, voting, participation or dividend rights or
liquidation preferences relating thereto.

          1.48    "LIENS" shall mean valid and enforceable liens, mortgages,
security interests, pledges, charges, encumbrances, or other legally cognizable
security devices of any kind.

          1.49    "MISCELLANEOUS SECURED CLAIMS" shall mean any and all Secured
Claims other than the Prepetition Lender Claims, the Senior Secured Note Claims,
and any DIP Facility Claims.

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          1.50    "NEW COMMON STOCK" shall mean the common stock of Reorganized
Archibald ($____ par value), having one vote per share, without preemptive
rights or cumulative voting rights.

          1.51    "NEW SUBORDINATED NOTES" shall mean the secured subordinated
notes issued by Reorganized Archibald immediately after the Effective Date and
guaranteed by Archibald (Canada), in form and substance satisfactory to the
Consenting Noteholder Threshold.

          1.52    "NEW SUBORDINATED NOTES INDENTURE" shall mean the indenture
under which the New Subordinated Notes are issued, in form and substance
satisfactory to the Consenting Noteholder Threshold.

          1.53    "OLD COMMON STOCK" shall mean the common stock of any of the
Debtors outstanding on the Effective Date, together with any options, warrants,
or rights to purchase, sell or subscribe for an ownership interest in, or other
security of, any of the Debtors, including all rights under that certain
Securities Purchase Agreement dated as of October 30, 1991 among Archibald,
Holdings and the "Purchasers" party thereto, as amended prior to the date
hereof, and any and all redemption, conversion, exchange, voting, participation
or dividend rights or liquidation preferences relating thereto.

          1.54    "OLD JUNIOR PREFERRED STOCK" shall mean the junior Class A and
Class B PIK preferred stock of Holdings outstanding on the Effective Date,
together with any options, warrants, or rights to purchase, sell or subscribe
for an ownership interest in, or other security of, any of the Debtors,
including all rights under that certain Securities Purchase Agreement dated as
of October 30, 1991 among Archibald, Holdings and the "Purchasers" party
thereto, as amended prior to the date hereof, and any and all redemption,
conversion, exchange, voting, participation or dividend rights or liquidation
preferences relating thereto.

          1.55    "OLD SENIOR PREFERRED STOCK" shall mean the senior preferred
stock of Holdings outstanding on the Effective Date, together with any options,
warrants, or rights to purchase, sell or subscribe for an ownership interest in,
or other security of, any of the Debtors, including any and all redemption,
conversion, exchange, voting, participation or dividend rights or liquidation
preferences relating thereto.

          1.56    "PERSON" shall mean a natural person, or any legal entity or
organization including, without limitation, any corporation, partnership
(general or limited), limited liability company, business trust, unincorporated
organization or association, joint stock company, trust, association,
governmental body (or any agency, instrumentality or political subdivision
thereof), or any other form of legal entity.

          1.57    "PETITION DATE" shall mean June 6, 2002, the date upon which
the Debtors filed their petitions under chapter 11 of the Bankruptcy Code.

          1.58    "PLAN" shall mean this Joint Plan of Reorganization, all
exhibits hereto, and any amendments or modifications hereof.

          1.59    "POST-CONFIRMATION DEBTORS" shall mean the Debtors in their
post-Confirmation Order status.

          1.60    "PREPETITION CREDIT AGREEMENT" shall mean that certain
revolving credit agreement entered into on June 28, 2001 by and between the
Debtors and Sweet Factory as borrowers and The CIT Group/Business Credit, Inc.
as agent and the lenders party thereto (as amended, restated, or otherwise
modified).

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          1.61    "PRIORITY CLAIM" shall mean any Claim against the Debtors
other than an Administrative Claim or Priority Tax Claim entitled to priority in
payment under section 507(a) of the Bankruptcy Code. With respect to the Claims
of employees or former employees, such Claims shall constitute Priority Claims,
only to the extent permissible under sections 507(a)(3) and (a)(4) of the
Bankruptcy Code or prior order of the Bankruptcy Court.

          1.62    "PRIORITY TAX CLAIM" shall mean any Claim for taxes against
the Debtors, including without limitation any interest and penalties due
thereon, entitled to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.

          1.63    "PROFESSIONALS" shall mean those Persons (i) employed pursuant
to an order of the Bankruptcy Court in accordance with sections 327 and 1103 of
the Bankruptcy Code and to be compensated for services rendered prior to the
Effective Date, pursuant to sections 327, 328, 329, 330 and 331 of the
Bankruptcy Code, or (ii) for which compensation and reimbursement has been
allowed by the Bankruptcy Court in a Final Order issued pursuant to section
503(b)(4) of the Bankruptcy Code.

          1.64    "PROPERTY" means all property of the Estates of any nature
whatsoever, real or personal, tangible or intangible, previously or now owned by
the Debtors, or acquired by the Debtors' estate, as defined in section 541 of
the Bankruptcy Code.

          1.65    "PRO RATA" means, as of any certain date, with respect to any
Allowed Claim in any Class, the proportion that such Allowed Claim bears to the
aggregate amount of all Claims, including Disputed Claims, in such Class.

          1.66    "REGISTRATION RIGHTS AGREEMENT" shall mean a registration
rights agreement in form and substance satisfactory to the Consenting Noteholder
Threshold.

          1.67    "REORGANIZED ARCHIBALD" shall mean the corporation resulting
from the merger of Archibald with and into Newco, a Delaware corporation.

          1.68    "REORGANIZED ARCHIBALD BYLAWS" shall have the meaning
specified in Section 6.2.2 of the Plan.

          1.69    "REORGANIZED ARCHIBALD CERTIFICATE OF INCORPORATION" shall
have the meaning specified in Section 6.2.2 of the Plan.

          1.70    "SCHEDULES" shall mean the Debtors' Schedules of Assets and
Liabilities filed with the Bankruptcy Court pursuant to Bankruptcy Rule 1007 as
they may be amended from time to time.

          1.71    "SECURED CLAIM" means all or that portion of a debt existing
on the Petition Date, as finally allowed and approved by the Bankruptcy Court,
to the extent that such debt is not greater than the value of the assets of the
Debtors that the Bankruptcy Court finds are valid security for such debt, in
accordance with section 506(a) of the Bankruptcy Code.

          1.72    "SENIOR SECURED NOTE CLAIM" shall mean the Claim of a holder
of the Senior Secured Notes.

          1.73    "SENIOR SECURED NOTEHOLDERS" shall mean the holders of the
Senior Secured Notes.

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          1.74    "SENIOR SECURED NOTES" shall mean the 10 1/4% senior secured
notes due 2004 issued by Archibald Candy Corporation.

          1.75    "SHAREHOLDER AGREEMENT" shall mean that certain agreement
governing the rights, duties and obligations of Reorganized Archibald, to be
dated as of the Effective Date, executed and delivered by Reorganized Archibald
and to which all holders of New Common Stock shall be deemed to be parties.

          1.76    "SWEET FACTORY" shall mean Sweet Factory, Inc.

          1.77    "UNIMPAIRED" shall mean any Claim that is not Impaired within
the meaning of section 1124 of the Bankruptcy Code.

          1.78    "VOTING DEADLINE" means the deadline established by Order of
the Bankruptcy Court for receipt of Ballots voting to accept or reject the Plan.

          1.79    Unless otherwise specified, all section, article, schedule or
exhibit references in the Plan are to the respective Section in, Article of,
Schedule to, or Exhibit to, the Plan. The words "herein," "hereof," "hereto,"
"hereunder" and other words of similar import refer to the Plan as a whole and
not to any particular section, subsection or clause contained in the Plan.
Whenever the context requires, such terms shall include the plural as well as
the singular number, the masculine gender shall include the feminine and the
feminine gender shall include the masculine.

          1.80    All terms not expressly defined herein shall have the
respective meanings given such terms in section 101 of the Bankruptcy Code or as
otherwise defined in applicable provisions of the Bankruptcy Code.

          1.81    Unless otherwise specified herein, any reference to an Entity
as a holder of a Claim includes that Entity's successors, assigns and
affiliates.

          1.82    The rules of construction set forth in section 102 of the
Bankruptcy Code will apply.

          1.83    In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

                                    ARTICLE 2
                        PROVISIONS FOR PAYMENT OF ALLOWED
      ADMINISTRATIVE AND PRIORITY TAX CLAIMS AND OTHER UNCLASSIFIED CLAIMS

          2.1     Administrative Claims, Priority Tax Claims, and DIP Facility
Claims are not classified in this Plan. The treatment of and consideration to be
received by holders of Allowed Administrative Claims, Allowed Priority Tax
Claims and DIP Facility Claims pursuant to this Article 2 of the Plan shall be
in full and complete satisfaction, settlement, release and discharge of such
Claims.

          2.2     TREATMENT OF ADMINISTRATIVE CLAIMS. Except to the extent the
holder of an Allowed Administrative Claim agrees otherwise, each holder of an
Allowed Administrative Claim shall be paid in respect of such Allowed Claim (a)
the full amount thereof, without interest, in Cash, on the tenth (10th) Business
Day following the later of (i) the Effective Date, and (ii) the date on which
such

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Claim becomes an Allowed Claim, (b) according to the ordinary business terms
agreed by, and in the ordinary course of business of, the Debtors, or (c) upon
other agreed terms.

          2.3     TREATMENT OF PRIORITY TAX CLAIMS. Each holder of an Allowed
Priority Tax Claim shall receive, in respect of such Allowed Claim, at the
option of Reorganized Archibald, either (a) the full amount thereof, without
post-petition interest or penalty, in Cash, as soon as practicable after the
tenth (10th) Business Day following the later of (i) the Effective Date, and
(ii) the date on which such Claim becomes an Allowed Claim or paid upon other
agreed terms, or (b) a promissory note payable by Reorganized Archibald in a
principal amount equal to the amount of such Allowed Priority Tax Claim on which
interest shall accrue from and after the Effective Date at the rate of 6% or
such higher or lower rate as is determined by the Bankruptcy Court to be
appropriate under section 1129(a)(9)(C) of the Bankruptcy Code and shall be paid
semi-annually in arrears; the principal amount of the promissory note shall be
paid in full on a date or dates six (6) years after the date of assessment of
such Allowed Priority Tax Claim.

          2.4     DIP FACILITY CLAIMS. Allowed DIP Facility Claims against the
Debtors shall be paid: (a) on the Effective Date in Cash in an amount equal to
the Allowed amount of such Claims; or (b) on such other terms as may be mutually
agreed upon among the holders of the DIP Facility Claims and the Debtors.

          2.5     BAR DATE FOR ADMINISTRATIVE CLAIMS. Unless otherwise ordered
by the Bankruptcy Court, requests for payment of Administrative Claims,
including all applications for final allowance of compensation and reimbursement
of expenses of Professionals incurred through the Effective Date, must be filed
and served on the Debtors, no later than forty-five (45) days after the
Effective Date. Any Person that is required to file and serve a request for
payment of an Administrative Claim and fails to timely file and serve such
request, shall be forever barred, estopped and enjoined from asserting such
Claim or participating in distributions under the Plan on account thereof.
Objections to a Fee Claim must be filed and served on the Debtors and their
counsel, and the requesting party and its counsel (if any) by the later of (1)
75 days after the Effective Date or (2) 30 days after the filing of the
applicable request for payment of the Fee Claim.

                                    ARTICLE 3
                     CLASSIFICATION OF CLAIMS AND INTERESTS

          3.1     Administrative Claims, Priority Tax Claims, and DIP Facility
Claims are unclassified. For purposes of this Plan, all other Claims and
Interests are classified as follows:

          3.2     Class 1 Claims shall consist of all Priority Claims.

          3.3     Class 2 Claims shall consist of all Miscellaneous Secured
Claims.

          3.4     Class 3 Claims shall consist of all Secured Claims of Senior
Secured Noteholders.

          3.5     Class 4 Claims shall consist of all Convenience Class Claims.

          3.6     Class 5A Claims shall consist of all General Unsecured Claims
other than Convenience Class Claims and General Unsecured Claims of Senior
Secured Noteholders.

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          3.7     Class 5B Claims shall consist of all General Unsecured Claims
of Senior Secured Noteholders and of any Class 5A Claimant who elects treatment
under Class 5B.

          3.8     Class 6 Claims shall consist of all Intercompany Claims.

          3.9     Class 7 Interests shall consist of all Old Senior Preferred
Stock Interests in the Debtors.

          3.10    Class 8 Interests shall consist of all Old Junior Preferred
Stock Interests in the Debtors.

          3.11    Class 9 Interests shall consist of all Old Common Stock
Interests in all Debtors.

                                    ARTICLE 4
                        TREATMENT OF CLAIMS AND INTERESTS

          4.1     The treatment of and consideration to be received by holders
of Allowed Claims and Interests pursuant to this Article 4 of the Plan shall be
in full and complete satisfaction, settlement, release and discharge of such
Claims and Interests. The Debtors' obligations in respect of such Claims and
Interests shall be satisfied in accordance with the terms of this Plan.

          4.2     TREATMENT OF CLASS 1 CLAIMS - PRIORITY CLAIMS. Class 1 Claims
are Unimpaired. The legal, contractual and equitable rights of each Allowed
Class 1 Claim shall be left unaltered. Payment in full in Cash shall be made to
the holders of Allowed Class 1 Claims (a) as soon as practicable after the tenth
(10th) Business Day following the later of (i) the Effective Date, and (ii) the
date on which such Claim becomes an Allowed Claim, (b) upon other agreed terms
or (c) in the case of employee benefits not yet payable, in accordance with the
Debtors' existing employee benefits policies. Each holder of a Claim in this
Class is conclusively presumed to have accepted the Plan and is not entitled to
vote on the Plan.

          4.3     TREATMENT OF CLASS 2 CLAIMS - MISCELLANEOUS SECURED CLAIMS.
Class 2 Miscellaneous Secured Claims are Unimpaired. To the extent there are any
Claims in this class, each such Claim shall be deemed to be a separate subclass.
To the extent there are any Allowed Class 2 Claims, at the option of the
Debtors, either (i) the Claim shall be reinstated and left Unimpaired in the
manner described in section 1124 of the Bankruptcy Code, (ii) the holder of such
Claim shall receive Cash in an amount equal to such Miscellaneous Secured Claim,
including any interest on such Miscellaneous Secured Claim required to be paid
pursuant to section 506(b) of the Bankruptcy Code, if any, on the Effective Date
or as soon thereafter as is practicable, (iii) the holder of such Claim shall
receive or retain the collateral securing such Claim and any interest on such
Miscellaneous Secured Claim required to be paid pursuant to section 506(b) of
the Bankruptcy Code, if any, on the Effective Date or as soon thereafter as is
practicable, or (iv) the holder of such Claim shall receive such other treatment
as may be agreed upon in writing between the holder and the Debtors. Each holder
of a Claim in this Class, if any, is conclusively presumed to have accepted the
Plan and is not entitled to vote on the Plan.

          4.4     TREATMENT OF CLASS 3 CLAIMS - SECURED CLAIMS OF SENIOR SECURED
NOTEHOLDERS. Class 3 Claims are Impaired. Class 3 Claims shall be Allowed Claims
in an aggregate amount not to exceed $50,000,000. Each holder of an Allowed
Class 3 Claim shall receive its Pro Rata share of 100% of the New Subordinated
Notes on the Effective Date or as soon thereafter as practicable. The holders of
Class 3 Claims are entitled to vote on the Plan.

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          4.5     TREATMENT OF CLASS 4 CLAIMS - CONVENIENCE CLASS OF GENERAL
UNSECURED CLAIMS. Class 4 Claims are Impaired. Each holder of an Allowed Class 4
Claim shall receive Cash in an amount equal to eighty (80) % of such holder's
Allowed Claim on the Effective Date or as soon thereafter as is practicable. The
holders of Class 4 Claims are entitled to vote on the Plan.

          4.6     TREATMENT OF CLASS 5A CLAIMS - GENERAL UNSECURED CLAIMS. Class
5A Claims are Impaired. Each holder of a Class 5A Claim shall receive its Pro
Rata share of $1,200,000 in Cash, in an amount not to exceed 30% of such
holder's Allowed Claim or such holder may elect on the Ballot the treatment
provided to holders of Class 5B Claims. Payments in Cash to holders of Allowed
Class 5A Claims will be made on the Effective Date or as soon thereafter as
practicable. The holders of Class 5A Claims are entitled to vote on the Plan.

          4.7     TREATMENT OF CLASS 5B CLAIMS - GENERAL UNSECURED CLAIMS OF
SENIOR SECURED NOTEHOLDERS AND CLASS 5A CLAIMANTS WHO HAVE ELECTED CLASS 5B
TREATMENT. Class 5B Claims are Impaired. Each holder of a Class 5B Claim shall
receive, on account of its Allowed Claim, its Pro Rata share of 100% of the New
Common Stock of Archibald issued on the Effective Date or as soon thereafter as
practicable. The Senior Secured Noteholders shall have Allowed Class 5B Claims
in the aggregate amount of at least [$136 million], consisting of at least [$120
million] in principal and at least [$16 million] in interest, fees, and other
charges. The holders of Class 5B Claims are entitled to vote on the Plan.

          4.8     TREATMENT OF CLASS 6 CLAIMS - INTERCOMPANY CLAIMS. Class 6
Intercompany Claims are Impaired. The holders of Class 6 Intercompany Claims
shall receive no distribution on account of such Claims. Accordingly, the
holders of Class 6 Intercompany Claims are deemed to reject the Plan and are not
entitled to vote on the Plan in accordance with section 1126(g) of the
Bankruptcy Code.

          4.9     TREATMENT OF CLASS 7 SENIOR PREFERRED STOCK INTERESTS. Class 7
Senior Preferred Stock Interests are Impaired. The holders of Class 7 Senior
Preferred Stock Interests shall receive no distribution. On the Effective Date,
all Class 7 Senior Preferred Stock Interests shall be deemed canceled, null and
void and of no force and effect. Accordingly, the holders of Class 7 Senior
Preferred Stock Interests are deemed to reject the Plan and are not entitled to
vote on the Plan in accordance with section 1126(g) of the Bankruptcy Code.

          4.10    TREATMENT OF CLASS 8 JUNIOR PREFERRED STOCK INTERESTS. Class 8
Junior Preferred Stock Interests are Impaired. The holders of Class 8 Junior
Preferred Stock Interests shall receive no distribution. On the Effective Date,
all Class 8 Junior Preferred Stock Interests shall be deemed canceled, null and
void and of no force and effect. Accordingly, the holders of Class 8 Junior
Preferred Stock Interests are deemed to reject the Plan and are not entitled to
vote on the Plan in accordance with section 1126(g) of the Bankruptcy Code.

          4.11    TREATMENT OF CLASS 9 COMMON STOCK INTERESTS. Class 9 Common
Stock Interests are Impaired. The holders of Class 9 Common Stock Interests
shall receive no distribution. On the Effective Date, all Class 9 Common Stock
Interests shall be deemed canceled, null and void and of no force and effect.
Accordingly, the holders of Class 9 Common Stock Interests are deemed to reject
the Plan and are not entitled to vote on the Plan in accordance with section
1126(g) of the Bankruptcy Code.

                                       10
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                                    ARTICLE 5
                    SUBSTANTIVE CONSOLIDATION OF THE DEBTORS

          5.1     The Plan contemplates and is predicated upon the substantive
consolidation of the Estates into a single entity for the purpose of
Confirmation, consummation and implementation of the Plan, including voting,
confirmation, making distributions under the Plan and Claim determination (but
only for those purposes). The substantive consolidation of the Estates for these
purposes shall have the following effects: (i) all Intercompany Claims by and
among the Debtors will be released; (ii) all assets and all proceeds thereof and
all liabilities of any and all of the Debtors will be merged or treated as
though they were merged; (iii) any obligation of any and all of the Debtors and
all guarantees thereof executed by any of the Debtors will be deemed to be a
single obligation; (iv) any Claims which are Filed or to be Filed in connection
with any such obligation and any such guarantees will be deemed a single Claim
against the Debtors; (v) each and every Claim which is Filed in the individual
Chapter 11 Case of any of the Debtors will be deemed one Claim which is Filed
against the Debtors; and (vi) all Interests, including the Old Common Stock, the
Senior Preferred Stock, and the Junior Preferred Stock, shall be deemed
automatically canceled and retired by operation of law and shall cease to exist.
Notwithstanding the foregoing, the Debtors' rights of recovery of any assets
shall not be prejudiced by such consolidation. In addition, the substantive
consolidation provided for herein shall not (other than for purposes related to
the Plan and distributions to be made hereunder) affect (1) the legal and
corporate structure of Reorganized Archibald, (2) any obligations under any
leases or contracts assumed in the plan or otherwise subsequent to the filing of
these Chapter 11 Cases, or (3) any obligations to pay quarterly fees to the
United States Trustee.

                                    ARTICLE 6
                      MEANS FOR IMPLEMENTATION OF THE PLAN

          6.1     PRIOR TO THE EFFECTIVE DATE. Except as may be otherwise
ordered by the Bankruptcy Court, the directors and executive officers of the
Debtors shall continue to serve in such capacities until the Effective Date. All
injunctions or stays, whether by operation of law or by order of the Bankruptcy
Court, provided for in the Chapter 11 Cases pursuant to section 105 or 362 of
the Code or otherwise that are in effect on the Confirmation Date shall remain
in full force and effect until the Effective Date.

          6.1.1   EXIT FINANCING. Prior to the Confirmation Date, Archibald
Candy Corporation will obtain the Exit Facility Commitment Letter, which shall
contain such terms, conditions and covenants as are usual and customary for
financings of this type and shall be on terms satisfactory to the Debtors, the
Consenting Noteholder Threshold and the lenders under such Exit Facility.

          6.2     ON THE EFFECTIVE DATE.

          6.2.1   MERGER OF ARCHIBALD WITH NEWCO. On and as of the Effective
Date, Archibald shall merge with and into Newco, a Delaware corporation, to form
Reorganized Archibald.

          6.2.2   VESTING OF THE ESTATES IN THE REORGANIZED DEBTORS. On and as
of the Effective Date, pursuant to section 1141(b) of the Bankruptcy Code, all
Property of the Estates of each of the Debtors shall become vested in
Reorganized Archibald, free and clear of all Claims, Interests, Liens and other
encumbrances, except as provided in this Plan.

          6.2.3   AMENDMENT OF CERTIFICATES OF INCORPORATION AND BYLAWS. On and
as of the Effective Date, (i) the certificate of incorporation of Reorganized
Archibald shall become effective and

                                       11
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shall be in compliance with section 1123(a)(6) of the Code (the "Reorganized
Archibald Certificate of Incorporation") and (ii) the bylaws of Reorganized
Archibald shall be amended (the "Reorganized Archibald Bylaws"). The Reorganized
Archibald Certificate of Incorporation and the Reorganized Archibald Bylaws
shall be Filed at least ten (10) days prior to the Voting Deadline and shall be
in form and substance satisfactory to the Consenting Noteholder Threshold.

          6.2.4   CORPORATE GOVERNANCE. Exhibit A hereto, a pleading to be Filed
prior to the Confirmation Date, shall specify the office, names and affiliations
of the individuals intended to serve as directors and officers of Reorganized
Archibald on and after the Effective Date. On and after the Effective Date,
Reorganized Archibald shall be governed in accordance with the Reorganized
Archibald Certificate of Incorporation, the Reorganized Archibald Bylaws and the
Shareholder Agreement. As provided in the Reorganized Archibald Certificate of
Incorporation, the boards of directors of Reorganized Archibald shall initially
consist of five (5) directors: four (4) directors designated by the Senior
Secured Noteholders and the Chief Executive Officer of Reorganized Archibald,
who shall also serve as the Chairman of the board of directors for the Initial
Term (as hereinafter defined). The term of the initial board of directors of
Reorganized Archibald will be 12 months (the "Initial Term").

          6.2.5   CANCELLATION OF OLD COMMON STOCK, OLD SENIOR PREFERRED STOCK
AND OLD JUNIOR PREFERRED STOCK. On and as of the Effective Date, the Old Common
Stock, Old Senior Preferred Stock and Old Junior Preferred Stock and each share
of capital stock of each Debtor shall be canceled and rendered null and void.

          6.2.6   CANCELLATION OF DEBT AND SECURITIES. On the Effective Date,
the Senior Secured Notes and the Indenture and all obligations of the Debtors or
any guarantor thereunder or in respect thereof shall be cancelled and discharged
and fully satisfied by confirmation of this Plan and the distributions to be
made pursuant to this Plan. Notwithstanding the cancellation of the Indenture
and the Senior Secured Notes, such cancellation shall not impair the rights of
the holders of Senior Secured Notes to receive distributions under the Plan.

          6.2.7   ISSUANCE OF NEW COMMON STOCK. Reorganized Archibald shall be
deemed on the Effective Date to have authorized the issuance of the New Common
Stock for distribution in accordance with this Plan, consistent with the
Reorganized Archibald Certificate of Incorporation of Reorganized Archibald and
the Shareholder Agreement. All shares of New Common Stock issued pursuant to
this Plan will be, upon such issuance, validly issued, fully paid and
non-assessable.

          6.2.8   ISSUANCE OF NEW SUBORDINATED NOTES. Reorganized Archibald
shall be deemed on the Effective Date to have authorized the issuance of the New
Subordinated Notes for distribution to the holders of Allowed Class 3 Claims.

          6.2.9   RELEASE OF LIENS. Except as otherwise provided in the Plan or
in any contract, instrument or other agreement or document executed or delivered
in connection with the Plan, on the Effective Date, all mortgages, deeds of
trust, liens or other security interests against the Property of the Estates
shall be released, and all the right, title and interest of any holder of such
mortgages, deeds of trust, liens or other security interests shall revert to
Reorganized Archibald.

          6.3     CAUSES OF ACTION. Pursuant to section 1123(b)(3)(B) of the
Bankruptcy Code, but subject to Sections 10.3 and 10.4 of this Plan, Reorganized
Archibald, on behalf of itself and holders of Allowed Claims and Interests,
shall retain all Causes of Action that the Debtors had or had power to assert
immediately prior to the Effective Date, including Avoidance Actions, and may
commence or continue in any appropriate court or tribunal any suit or other
proceeding for the enforcement of such Causes of Action. All Causes of Action
shall remain the property of Reorganized Archibald. Nothing

                                       12
<Page>

contained in this Plan shall constitute a waiver of the rights, if any, of the
Debtors or Reorganized Archibald to a jury trial with respect to any Causes of
Action or objection to any Claim or Interest. Reorganized Archibald shall
maintain reasonable records relating to the Avoidance Actions (including
proceeds generated from settlement or judgment, and expenses).

          6.4     MANAGEMENT INCENTIVE PROGRAM. Not later than thirty (30) days
after the Effective Date, the Board of Directors of Reorganized Archibald shall
establish a stock option plan providing for the granting of Options for up to
five (5) % of the aggregate number of shares of New Common Stock issued to
holders of Class 5B Claims (including Class 5A claimants who have elected Class
5B treatment) (the "Management Incentive Plan"). The grant of such stock options
will dilute the ownership share of all shareholders receiving a distribution of
New Common Stock under the Plan.

          6.5     CONTINUATION OF BUSINESS. On and after the Effective Date,
Reorganized Archibald shall continue to engage in business.

          6.6     AUTHORIZATION OF OFFICERS. Each of the President, Chief
Financial Officer, Treasurer or any Vice President of each of the Debtors, or
such other Persons as the Bankruptcy Court may designate at the request of the
Debtors, is authorized to execute, deliver, file or record such contracts,
instruments, releases and other agreements or documents and take such actions as
may be necessary or appropriate to effectuate and implement the provisions of
this Plan. Each of the Secretary or any Assistant Secretary of each of the
Debtors or such other Persons as the Bankruptcy Court may designate at the
request of the Debtors is authorized to certify or attest to any of the
foregoing actions.

                                    ARTICLE 7
                            CLAIMS AND DISTRIBUTIONS

          7.1     DISTRIBUTIONS UNDER THE PLAN. As soon as practicable after the
Effective Date, Reorganized Archibald shall make, or shall make adequate reserve
for, the Distributions required to be made under the Plan. Cash necessary to
make the Distributions required under the Plan, shall be made from the Debtors'
Cash, if any, the Exit Facility, or any other source. All Distributions reserved
pursuant to the Plan shall be held by the Debtors or Reorganized Archibald in
trust for the benefit of the holders of Claims entitled to receive such
Distributions.

          7.2     DELIVERY OF DISTRIBUTIONS. Subject to Bankruptcy Rule 9010 and
except as otherwise provided herein, Cash Distributions to holders of Allowed
Administrative, Priority Tax, Priority, Miscellaneous Secured Claims, Class 4
Claims and Class 5A Claims shall be made at (a) the address of each holder as
set forth in the Schedules filed with the Court unless superseded by the address
set forth on proofs of Claim filed by such holder, or (b) the last known address
of such holder if no proof of Claim is filed or if the Debtors have been
notified in writing of a change of address. With respect to Distributions of New
Common Stock and New Subordinated Notes to holders of Class 3 Claims and holders
of Class 5B Claims who are the holders of Senior Secured Notes, the Indenture
Trustee will instruct the Depository Trust Company ("DTC") to cancel the
existing positions with respect to the Senior Secured Notes (including the
global certificate held in the name of DTC's nominee (Cede & Co.) of each
financial institution that is a participant in DTC's book-entry transfer
facility system. Simultaneously therewith, DTC will execute a book-entry credit
for the benefit of each such financial institution with the number of Shares of
New Common Stock [and the amount of New Subordinated Notes] to be issued to such
holder in accordance with the Plan. In connection with the foregoing,
Reorganized Archibald will deliver to DTC a global certificate to be issued in
connection with the Senior Secured Noteholder Claims hereunder. With respect to
distributions of New Common Stock to the holders of Class 5B Claims who are not
holders of claims under the Senior Secured Notes, such distributions shall be
made, in accordance

                                       13
<Page>

with the Plan, to such holders at (a) the address of each holder as set forth in
the Schedules unless superseded by the address set forth on proofs of Claim
filed by such holder, or (b) the last known address of such holder if no proof
of Claim is filed or if the Debtors have been notified in writing of a change of
address. If any Distribution is returned as undeliverable, Reorganized Archibald
may, in its discretion, make such efforts to determine the current address of
the holder of the Claim with respect to which the Distribution was made as
Reorganized Archibald deems appropriate, but no Distribution to any holder shall
be made unless and until Reorganized Archibald has determined the then-current
address of the holder, at which time the Distribution to such holder shall be
made to the holder without interest. Amounts in respect of any undeliverable
Distributions made through or by Reorganized Archibald shall be returned to, and
held in trust by, Reorganized Archibald until such Distributions are claimed or
are deemed to be unclaimed property under section 347(b) of the Bankruptcy Code
as set forth herein.

          7.3     UNDELIVERABLE DISTRIBUTIONS AS UNCLAIMED PROPERTY. Except with
respect to property not distributed because such property is being held in a
Disputed Reserve, Distributions of Cash, New Subordinated Notes or New Common
Stock that are not claimed by the expiration of six months from the later of the
(a) Effective Date or (b) the date of initial distributions under section 7.2
above, shall be deemed to be unclaimed property under section 347(b) of the
Bankruptcy Code and shall revest in Reorganized Archibald, and the Claims with
respect to which such Distributions are made shall be automatically canceled and
extinguished by Reorganized Archibald. After the expiration of the six-month
period referenced in the preceding sentence, the claim of any entity to such
Distributions shall be discharged and forever barred. Nothing contained in the
Plan shall require the Debtors or Reorganized Archibald to attempt to locate any
holder of an Allowed Claim.

          7.4     DISTRIBUTION RECORD DATE. The record date for purposes of
determining the identity of holders of Claims and Interests entitled to
distributions under the Plan shall be ___________ at 5:00 p.m.

          7.5     OBJECTIONS TO CLAIMS. Objections to Claims shall be filed with
the Bankruptcy Court and served upon Creditors no later than 90 days after the
Effective Date, provided however, that this deadline may be extended by the
Bankruptcy Court upon motion of Reorganized Archibald, without notice or a
hearing. Notwithstanding the foregoing, unless an order of the Bankruptcy Court
specifically provides for a later date, any proof of claim filed after the
Confirmation Date shall be automatically disallowed as a late filed claim,
without any action by Reorganized Archibald, unless and until the party filing
such Claim obtains the written consent of Reorganized Archibald to file such
Claim late or obtains an order of the Bankruptcy Court upon notice to
Reorganized Archibald that permits the late filing of the Claim, in which event,
Reorganized Archibald shall have 90 days from the date of such written consent
or order to object to such Claim, which deadline may be extended by the
Bankruptcy Court upon motion of the Post-Confirmation Debtors, without notice or
a hearing. Nothing herein shall be construed to extend the Bar Date, the Bar
Date for Administrative Claims set forth in Section 2.5 of the Plan or the Bar
Date for Rejection Damages set forth in Section 8.5 of the Plan.

          7.6     Subject to Bankruptcy Court approval, objections to Claims may
be litigated to judgment, settled or withdrawn.

          7.7     Distributions with respect to and on account of Claims to
which objections have been filed will be made as soon as practicable after an
order, judgment, decree or settlement agreement with respect to such Claim
becomes a Final Order, and the applicable Creditor shall not receive interest on
its Allowed Claim, despite anything contained herein to the contrary.

          7.8     DISPUTED CLAIM RESERVES. On and after the Effective Date,
Reorganized Archibald shall establish and maintain reserves for all Disputed
Claims. For purposes of establishing a

                                       14
<Page>

reserve, Cash, New Subordinated Notes or New Common Stock will be set aside
equal to the amount that would have been distributed to the holders of Disputed
Claims in such Class had their Disputed Claims been deemed Allowed Claims on the
Effective Date or such other amount as may be approved by the Bankruptcy Court
upon motion of the Debtors or Reorganized Archibald. If, when, and to the extent
any such Disputed Claim becomes an Allowed Claim by Final Order, the relevant
portion of the Cash, New Subordinated Notes or New Common Stock held in reserve
therefor shall be distributed by Reorganized Archibald to the Claimant. The
balance of such Cash, New Subordinated Notes or New Common Stock, if any
remaining after all disputed claims have been resolved, shall be distributed Pro
Rata to all holders of Claims in accordance with Article 4 of the Plan. No
payments or distributions shall be made with respect to a Claim which is a
Disputed Claim pending the resolution of the dispute by Final Order.

          7.9     WITHHOLDING TAXES. Any federal, state, or local withholding
taxes or other amounts required to be withheld under applicable law shall be
deducted from distributions hereunder. All Persons holding Claims shall be
required to provide any information necessary to effect the withholding of such
taxes.

          7.10    FRACTIONAL CENTS. Any other provision of this Plan to the
contrary notwithstanding, no payment of fractions of cents will be made.
Whenever any payment of a fraction of a cent would otherwise be required, the
actual Distribution made shall reflect a rounding of such fraction to the
nearest whole cent (up or down), with half cents or less being rounded down and
fractions in excess of half a cent being rounded up.

          7.11    FRACTIONAL SHARES. Any other provision of this Plan to the
contrary notwithstanding, no fractional shares of New Common Stock shall be
issued pursuant to the Plan. Whenever any payment of a fraction of a share of
New Common Stock under the Plan would otherwise be required, the actual
Distribution made shall reflect a rounding down of such fractional share to the
nearest whole share, but shall not be less than one share.

          7.12    SETOFFS. Except as otherwise provided for herein, Reorganized
Archibald may, but shall not be required to, set off against any Claim and the
payments to be made pursuant to this Plan in respect of such Claim, claims of
any nature whatsoever the Debtors or their Estates may have against the holder
of such claim, but neither the failure to do so nor the allowance of a Claim
hereunder shall constitute a waiver or release by the Debtors or their Estates
of any Claim they may have against such Creditor.

          7.13    INTEREST ON CLAIMS. Except as specifically provided for in the
Plan or the Confirmation Order, interest shall not accrue on Claims and no
holder of a Claim shall be entitled to interest accruing on or after the
Petition Date on any Claim. Interest shall not accrue or be paid on any Disputed
Claim in respect of the period from the Petition Date to the date a final
Distribution is made thereon if and after such Disputed Claim becomes an Allowed
Claim. Except as expressly provided herein or in a Final Order of the Court, no
prepetition Claim shall be Allowed to the extent that it is for postpetition
interest or other similar charges.

          7.14    ORDINARY COURSE LIABILITIES. Except as otherwise specifically
provided in the Plan, holders of claims against the Debtors (other than Fee
Claims) based on liabilities incurred after the Petition Date in the ordinary
course of the Debtors' businesses shall not be required to file any request for
payment of such Claims. Such Claims shall be assumed and paid by Reorganized
Archibald in the ordinary course of business of Reorganized Archibald, in
accordance with the terms and subject to the conditions of any agreements
governing, instruments evidencing, or other documents related to the
transactions underlying such Claims, without any further action by the holders
of such Claims.

                                       15
<Page>

          7.15    ASSUMPTION OF OBLIGATIONS UNDER THE PLAN. On the Effective
Date, the obligations to make the Distributions required by the Plan shall be
assumed by Reorganized Archibald, which shall have the liability for, and
obligation to make, all Distributions of Cash, New Subordinated Notes, New
Common Stock, and other Property to be issued or distributed by Reorganized
Archibald under the Plan. Reorganized Archibald shall also assume the obligation
to pay any expenses of the Debtors in consummating the Plan and in performing
their duties set forth in the Plan.

                                    ARTICLE 8
                    UNEXPIRED LEASES AND EXECUTORY CONTRACTS

          8.1     REJECTION OF CERTAIN CONTRACTS AND LEASES. Ten (10) days prior
to the Voting Deadline, the Debtors shall File a schedule of the executory
contracts and unexpired leases to be rejected on the Effective Date, which
schedule shall be in form and substance reasonably satisfactory to the
Consenting Noteholder Threshold (the "Rejection Schedule"), which shall be
deemed Exhibit C to the Plan. The Rejection Schedule shall be served by the
Debtors on each party to an executory contract or unexpired lease listed
thereon. The Rejection Schedule may be amended from and after the Confirmation
Date for sixty (60) days thereafter (but in no event after the Effective Date)
by the Debtors, with notice to any party to an executory contract or unexpired
lease added to or removed from such schedule.

          8.2     ASSUMPTION OF CERTAIN CONTRACTS AND LEASES.

          8.2.1   EMPLOYMENT AND CONSULTING CONTRACTS. The Debtors shall not
assume or seek to assume any employment, consulting or similar contract without
the prior consent of the Consenting Noteholder Threshold, PROVIDED, HOWEVER,
that the Consenting Noteholder Threshold shall be deemed to have consented to
the assumption of the employment agreement between the Debtors and Ted Shepherd
dated June __, 2002. Any employment, consulting or similar contract that has not
been assumed pursuant to this section prior to the Effective Date, and has not
been included in the Rejection Schedule or has not been otherwise rejected,
shall be deemed rejected on the day before the Effective Date.

          8.2.2   UNEXPIRED AND UNREJECTED CONTRACTS AND LEASES. Each executory
contract or unexpired lease of the Debtors that has not expired by its own terms
prior to the Effective Date, has not been rejected during the Chapter 11 Cases
prior to the Effective Date, and is not on the Rejection Schedule, shall be
deemed assumed by Reorganized Archibald pursuant to sections 365 of the
Bankruptcy Code on the Effective Date and vested in Reorganized Archibald.

          8.3     CURE PAYMENTS AND RELEASE OF LIABILITY. The Debtors shall, at
least ten (10) days prior to the Voting Deadline, File and serve on all parties
to executory contracts and unexpired leases to be assumed as of the Effective
Date, a schedule setting forth the amount of cure payments to be provided by
Reorganized Archibald in accordance with section 365(b)(1) of the Bankruptcy
Code (the "Assumption Schedule"). Objections to any proposed cure payment must
be made by the Voting Deadline and shall be determined, if necessary, at the
Confirmation Hearing. In the event the Debtors amend the Assumption Schedule
after the Confirmation Date, the Debtors shall, within ten (10) days after such
amendment, File and serve on all parties affected by any such schedule
amendment, a supplemental schedule setting forth the amount of cure payments to
be provided by Reorganized Archibald in accordance with section 365(b)(1) of the
Bankruptcy Code. Objections to any proposed cure payments set forth in the
supplemental schedule must be made within ten (10) days after service thereof. A
party to an assumed executory contract or unexpired lease that has not filed an
appropriate pleading with the Bankruptcy Court on or before the applicable
ten-day period shall be deemed to have waived its right to dispute such amount.
All unpaid cure payments under any executory contracts or unexpired leases that

                                       16
<Page>

are assumed or assumed and assigned under this Plan shall be made by Reorganized
Archibald as soon as practicable after the Effective Date but not later than
thirty (30) days after the Effective Date, PROVIDED, that, in the event that a
dispute regarding the amount of any cure payments, Reorganized Archibald shall
make such cure payments as may be required by section 365(b)(1) of the
Bankruptcy Code within ten (10) days following the entry of a Final Order
resolving such dispute.

          8.4     POST-PETITION CONTRACTS AND LEASES. All contracts and leases
entered into by the Debtors after the Petition Date, excluding the DIP Credit
Agreement, shall be deemed assigned to Reorganized Archibald on the Effective
Date.

          8.5     BAR DATE FOR REJECTION DAMAGES. All proofs of claim with
respect to claims arising from the rejection of executory contracts or leases
shall, unless another order of the Bankruptcy Court provides for an earlier
date, be filed with the Bankruptcy Court within thirty (30) days after the
mailing of notice of entry of the Confirmation Order. Any proof of claim that is
not timely filed shall be released, discharged and forever barred from assertion
against the Debtors, their Estates or Property, Reorganized Archibald.

                                    ARTICLE 9
                CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE PLAN

          9.1     CONDITIONS TO EFFECTIVE DATE OF THE PLAN. The Plan shall not
become effective unless and until each of the following conditions has been
satisfied:

          (a)     The Bankruptcy Court shall have entered the Confirmation Order
in form and substance reasonably satisfactory to the Consenting Noteholder
Threshold;

          (b)     The Confirmation Order shall have become a Final Order;

          (c)     The Reorganized Archibald Certificate of Incorporation and the
Reorganized Archibald Bylaws shall be in the form and substance satisfactory to
the Consenting Noteholder Threshold and shall have been duly filed with the
Secretary of State of Delaware, and shall be in full force and effect;

          (d)     The commitments under the DIP Credit Agreement shall have
terminated, all amounts owing under the DIP Credit Agreement (including, without
limitation, all principal, interest, fees and expenses owed thereunder) shall
have been paid in full and any outstanding letters of credit issued under and in
connection with the DIP Credit Agreement shall have been terminated (in each
case, concurrently with the closing of the Exit Facility);

          (e)     The New Subordinated Notes Indenture, the Shareholder
Agreement, and the Registration Rights Agreement, each in form and substance
satisfactory to the Consenting Noteholder Threshold, shall have been executed
and delivered by Reorganized Archibald;

          (f)     All conditions precedent to the Exit Facility shall have been
satisfied or waived in accordance with the terms thereof; and

          (g)     All other actions and documents necessary to implement the
Plan as of the Effective Date shall have been effected or duly executed and
delivered.

                                       17
<Page>

          9.2     WAIVER OF CONDITIONS. The Debtors, in their discretion may at
any time with the consent of the Consenting Noteholder Threshold, without notice
or authorization of the Bankruptcy Court, waive the condition set forth in
Section 9.1(b) above. The failure of the Debtors to satisfy or waive such
condition may be asserted by the Debtors regardless of the circumstances giving
rise to the failure of such condition to be satisfied (including any action or
inaction by the Debtors). The Debtors reserve the right to assert that any
appeal from the Confirmation Order shall be moot after consummation of the Plan.

          9.3     EFFECT OF FAILURE OF CONDITION. In the event that the
conditions specified in Section 9.1(b) of the Plan have not occurred or been
waived on or before sixty (60) days after the Confirmation Date, the
Confirmation Order may be vacated upon order of the Court after motion made by
the Debtors or any party in interest.

          9.4     NOTICE OF EFFECTIVE DATE. On or before ten Business Days after
the occurrence of the Effective Date, the Debtors shall mail or cause to be
mailed to all holders of Claims a Notice that informs such holders of (a) entry
of the Confirmation Order; (b) the occurrence of the Effective Date; (c) the
assumption or rejection of any executory contracts of the Debtors pursuant to
this Plan, as well as the deadline for the filing of claims arising from such
rejection; and (d) such other matters as the Debtors deem to be appropriate.

                                   ARTICLE 10
                          EFFECTS OF PLAN CONFIRMATION

          10.1    DISCHARGE. Except as otherwise provided in the Plan or the
Confirmation Order, the rights afforded under the Plan and the treatment of
Claims and Interests under the Plan will be in exchange for and in complete
satisfaction, discharge and release of, all Claims and termination of all
Interests. Except as otherwise expressly provided in the Plan or the
Confirmation Order and in accordance with section 1141(d)(1) of the Bankruptcy
Code, entry of the Confirmation Order acts as a discharge effective as of the
Effective Date of any and all Claims against or Interests in the Debtors or any
of their assets and Properties that arose at any time before the entry of the
Confirmation Order. The discharge shall be effective as to each Claim and
Interest except as otherwise expressly provided in the Confirmation Order,
regardless whether:

          (a)     a proof of Claim or Interest is filed or deemed filed under
section 501 of the Bankruptcy Code;

          (b)     a Claim or Interest is Allowed;

          (c)     the holder of a Claim or Interest votes to accept or reject
the Plan; or

          (d)     the Claim or Interest receives any distribution under the
Plan.

          10.2    INJUNCTION. Except as otherwise provided in the Plan or the
Confirmation Order, on and after the Confirmation Date, all Entities who have
held, hold or may hold Claims against the Debtors or Interests in the Debtors
are, with respect to any such Claims or Interests, permanently enjoined from:
(a) commencing, conducting or continuing in any manner, directly or indirectly,
any suit, action or other proceeding of any kind (including, without limitation,
any proceeding in a judicial, arbitral, administrative or other forum) against
or affecting the Debtors, Reorganized Archibald or any of their Property, or any
direct or indirect transferee of any property of, or direct or indirect
successor in interest to, any of the foregoing Entities, or any property of any
such transferee or successor; (b) enforcing, levying, attaching (including,
without limitation, any pre-judgment attachment), collecting or otherwise

                                       18
<Page>

recovering by any manner or means whether directly or indirectly, of any
judgment, award, decree or order against the Debtors, Reorganized Archibald, any
of their Property, or any direct or indirect transferee of any property of, or
direct or indirect successor in interest to any of the foregoing Entities; (c)
creating, perfecting or otherwise enforcing in any manner, directly or
indirectly, any encumbrance of any kind against the Debtors, Reorganized
Archibald, any of their Property, or any direct or indirect transferee of any
property of, or direct or indirect successor in interest to any of the foregoing
Entities; (d) asserting any right of setoff, subordination, or recoupment of any
kind, directly or indirectly, against any obligation due the Debtors,
Reorganized Archibald, any of their Property, or any direct or indirect
transferee of any property of, or successor in interest to, any of the foregoing
Entities; and (e) taking any actions in any place and in any manner whatsoever
that do not conform to or comply with the provisions of the Plan.

          10.3    EXCULPATION. Except as otherwise provided by the Plan or the
Confirmation Order, upon confirmation of the Plan, all Entities shall be
conclusively presumed to have released each of the Debtors, Reorganized
Archibald, the Committee, the Senior Secured Noteholders, the DIP Agent, the DIP
Lenders, and any of their respective officers, directors, employees,
representatives, counsel or other agents, successors or assigns (collectively,
the "Exculpated Persons") of and from any claims, obligations, rights, causes of
action and liabilities for any act or omission in connection with, or arising
out of, the Chapter 11 Cases, including, without limiting the generality of the
foregoing, the Plan, the negotiation, formulation and preparation of the Plan
and Disclosure Statement and the DIP Credit Agreement, the pursuit of approval
of the Disclosure Statement, the pursuit of confirmation of the Plan, the
consummation of the Plan or the administration of the Plan or the property to be
distributed under the Plan, except for acts or omissions which constitute
willful misconduct or gross negligence, and all such Persons, in all respects,
shall be entitled to rely upon the advice of counsel with respect to their
duties and responsibilities under the Plan and under the Bankruptcy Code and
Bankruptcy Rules.

          10.4    RELEASES. On the Effective Date, Reorganized Archibald and
Holdings, on their own behalf and as representatives of the Debtors' Estates, in
consideration of services rendered in the Chapter 11 Cases and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, shall be deemed to have waived, released and discharged all
claims, obligations, rights, causes of action and liabilities, including
derivative claims, whether based in tort, fraud, contract or otherwise, known or
unknown, which they possessed, possess or may possess prior to the Effective
Date and whether arising before or after the Petition Date against the Debtors,
the Estates, Archibald (Canada), each of the DIP Agent, DIP Lenders, the
Committee, the Senior Secured Noteholders, holders of the Old Junior Preferred
Stock, holders of the Old Senior Preferred Stock and holders of Old Common Stock
and the directors, officers, employees, agents, affiliates, representatives,
attorneys, professional advisors, successors and assigns of any of the foregoing
who served in such capacities after the Petition Date (collectively, the "Third
Party Releasees"), provided, however, that the release of each holder of the Old
Junior Preferred Stock, each holder of the Old Senior Preferred Stock and each
holder of the Old Common Stock, and their respective directors, officers,
employees, agents, affiliates, representatives, attorneys, professional
advisors, successors and assigns shall be contingent upon the receipt by the
Company and the Senior Secured Noteholders, and their respective directors,
officers, employees, agents, affiliates, representatives, attorneys,
professional advisors, successors and assigns, of an equivalent release from
such holder of the Old Junior Preferred Stock, the Old Senior Preferred Stock or
the Old Common Stock.

          10.5    SURVIVAL OF INDEMNIFICATION CLAIMS AND OBLIGATIONS.
Notwithstanding any other provisions, except as otherwise provided in the Plan,
the Indemnification Obligations shall expressly survive Confirmation of the Plan
and be binding on and enforceable against Reorganized Archibald, PROVIDED,
HOWEVER, that with respect to officers, directors or employees of the Debtors,
such Indemnification Obligations shall survive and be binding and enforceable
only with respect to officers, directors and employees who served in those
capacities after the Petition Date.

                                       19
<Page>

          10.6    INJUNCTION OF CLAIMS AGAINST, AND COVENANT NOT TO SUE, THIRD
PARTY RELEASEES. Pursuant to section 105 of the Bankruptcy Code, each holder of
a Claim who votes in favor of this Plan or who accepts any distributions
pursuant to the Plan shall be deemed to have unconditionally released the Third
Party Releasees from and covenanted not to sue the Third Party Releasees with
respect to, and be permanently enjoined from initiating or continuing, any
claim, action, employment of process, or any act to collect, offset, or recover
any claim against any Third Party Releasee, known or unknown, which accrued on
or prior to the Effective Date and whether arising before or after the Petition
Date, provided, that the foregoing release shall not apply to any action or
omission that constitutes actual fraud or criminal behavior, and provided
further that the release of holders of Old Junior Preferred Stock, holders of
Old Senior Preferred Stock and holders of the Old Common Stock, and their
respective directors, officers, employees, agents, affiliates, representatives,
attorneys, professional advisors, successors and assigns, shall be contingent on
such holder's delivery of a release and covenant not to sue with respect to any
claim, action, employment of process, or any act to collect, offset or recover
any claim against the Company or the Senior Secured Noteholders, or their
respective directors, officers, employees, agents, affiliates, representatives,
attorneys, professional advisors, successors and assigns, known or unknown,
which accrued on or prior to the Effective Date and whether arising before or
after the Petition Date.

          10.7    TERM OF INJUNCTIONS AND STAYS. Unless otherwise provided, all
injunctions or stays provided for in the Chapter 11 Cases pursuant to section
105 or 362 of the Bankruptcy Code or otherwise and in effect on the Confirmation
Date shall remain in full force and effect until the Effective Date.

          10.8    PRESERVATION OF INSURANCE. The Debtors' discharge and release
from all Claims as provided in this Plan shall not diminish or impair the
enforceability of any insurance policy that may cover claims by or against the
Debtors (including, without limitation, their officers or directors) or any
other Person or Entity. The Debtors shall maintain, extend and/or purchase
directors and officers liability coverage on substantially the same terms and
conditions as in effect as of the Confirmation Date, on a claims made basis, for
all acts and occurrences prior and subsequent to the Effective Date, on terms
satisfactory to Reorganized Archibald.

                                   ARTICLE 11
                            RETENTION OF JURISDICTION

          11.1    Following the Confirmation Date and until such time as all
payments and distributions required to be made and all other obligations
required to be performed under this Plan have been made and performed by
Reorganized Archibald and all causes of action described in Section 6.3 and
initiated in the Bankruptcy Court are resolved, the Bankruptcy Court shall
retain jurisdiction as is legally permissible, including, without limitation,
for the following purposes:

          (a)     CLAIMS. To determine the amount, allocability, classification,
or priority of Claims against the Debtors upon rejection by Reorganized
Archibald or any other party in interest;

          (b)     INJUNCTION, ETC. To issue injunctions or take such other
actions or make such other orders as may be necessary or appropriate to restrain
interference with the Plan or its execution or implementation by any Person, to
construe and to take any other action to enforce and execute the Plan, the
Confirmation Order, or any other order of the Bankruptcy Court, to issue such
orders as may be necessary for the implementation, execution, performance and
consummation of the Plan and all matters referred to herein, and to determine
all matters that may be pending before the Bankruptcy Court in the Chapter 11
Cases on or before the Effective Date with respect to any Entity;

                                       20
<Page>

          (c)     PROFESSIONAL FEES. To determine any and all applications for
allowance of compensation and expense reimbursement of Professionals for periods
before the Effective Date, as provided for in the Plan;

          (d)     CERTAIN PRIORITY CLAIMS. To determine any Priority Tax Claims,
Priority Claims, Administrative Claims or any requests for payment of
Administrative Claims;

          (e)     DISPUTE RESOLUTION. To resolve any dispute arising under or
related to the implementation, execution, consummation or interpretation of the
Plan and the making of distributions thereunder, including, without limitation,
any dispute concerning payment of Professional Fees and expenses;

          (f)     LEASES AND EXECUTORY CONTRACTS. To determine any and all
motions for the rejection, assumption, or assignment of executory contracts or
unexpired leases, and to determine the allowance of any Claims resulting from
the rejection of executory contracts and unexpired leases or cure Claims
resulting from the assumption of executory contracts and unexpired leases;

          (g)     ACTIONS. To determine all applications, motions, adversary
proceedings, contested matters, actions, and any other litigated matters
instituted prior to the closing of the Chapter 11 Cases, including but not
limited to, any remands and any actions brought under Section 6.3, above;

          (h)     GENERAL MATTERS. To determine such other matters, and for such
other purposes, as may be provided in the Confirmation Order as may be
authorized under provisions of the Bankruptcy Code;

          (i)     PLAN MODIFICATION. To modify the Plan under section 1127 of
the Bankruptcy Code, remedy any defect, cure any omission, or reconcile any
inconsistency in the Plan or the Confirmation Order so as to carry out its
intent and purposes;

          (j)     AID CONSUMMATION. To issue such orders in aid of consummation
of the Plan and the Confirmation Order notwithstanding any otherwise applicable
non-bankruptcy law, with respect to any Entity, to the full extent authorized by
the Bankruptcy Code;

          (k)     IMPLEMENTATION OF CONFIRMATION ORDER. To enter and implement
such orders as may be appropriate in the event the Confirmation Order is for any
reason stayed, revoked, modified or vacated; and

          (l)     FINAL ORDER. To enter a Final Order closing the Chapter 11
Cases.

                                   ARTICLE 12
                            MISCELLANEOUS PROVISIONS

          12.1    PRE-CONFIRMATION MODIFICATION. The Plan may be altered,
amended or modified by the Debtors before the Confirmation Date as provided in
section 1127 of the Bankruptcy Code.

          12.2    POST-CONFIRMATION IMMATERIAL MODIFICATION. The Debtors or
Reorganized Archibald may, with the approval of the Bankruptcy Court and without
notice to all holders of Claims and Interests, insofar as it does not materially
and adversely affect the interest of holders of Claims, correct

                                       21
<Page>

any defect, omission or inconsistency in the Plan in such manner and to such
extent as may be necessary to expedite consummation of this Plan.

          12.3    POST-CONFIRMATION MATERIAL MODIFICATION. The Plan may, with
the consent of the Consenting Noteholder Threshold, be altered or amended after
the Confirmation Date by the Debtors or Reorganized Archibald in a manner which,
in the opinion of the Bankruptcy Court, materially and adversely affects holders
of Claims, provided that such alteration or modification is made after a hearing
as provided in section 1127 of the Bankruptcy Code.

          12.4    WITHDRAWAL OR REVOCATION OF THE PLAN. The Debtors reserve the
right to revoke or withdraw the Plan prior to the Effective Date. If the Debtors
revoke or withdraw the Plan, then the result shall be the same as if the
Confirmation Order had not been entered and the Effective Date had not occurred.

          12.5    PAYMENT OF STATUTORY FEES. All fees payable pursuant to
section 1930 of Title 28 of the United States Code shall be paid on the
Effective Date or from assets of Reorganized Archibald when otherwise due.

          12.6    THE COMMITTEE. The Committee shall cease operating and
dissolve on the Effective Date.

          12.7    SUCCESSORS AND ASSIGNS. The rights, benefits and obligations
of any Entity named or referred to in the Plan shall be binding on, and shall
inure to the benefit of, the heirs, executors, administrators, successors or
assigns of such Entities.

          12.8    CRAMDOWN. To the extent any Impaired Class of Claims or
Interests Holders entitled to vote on the Plan votes to reject the Plan, the
Debtors reserve the right to request confirmation of the Plan under section
1129(b) of the Bankruptcy Code with respect to such Class(es) or Interests.

          12.9    GOVERNING LAW. Except to the extent that the Bankruptcy Code
is applicable, the rights and obligations arising under this Plan shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware.

          12.10   NOTICES. Any notice required or permitted to be provided under
the Plan shall be in writing and served by either (a) certified mail, return
receipt requested, postage prepaid, (b) hand delivery or (c) reputable overnight
courier service, freight prepaid, to be addressed as follows:

                  Archibald Candy Corporation
                  1137 West Jackson Blvd.
                  Chicago, Illinois 60607
                  Attention: Ted A. Shepherd

with a copy to:

                  YOUNG CONAWAY STARGATT & TAYLOR, LLP
                  The Brandywine Bldg.
                  1000 West Street, 17th Floor
                  P.O. Box 391
                  Wilmington, DE 19899-0391
                  T:  302-571-6600
                  Attention: Pauline K. Morgan, Esq.

                                       22
<Page>

                         -and-

                  WINSTON & STRAWN
                  35 West Wacker Drive
                  Chicago, IL 60601-9703
                  T: 312-558-5600
                  Attention: Matthew J. Botica, Esq.

          12.11   NON-VOTING EQUITY SECURITIES. To the extent applicable, the
Debtors shall comply with the provisions of section 1123(a)(6) of the Bankruptcy
Code.

          12.12   RETIREE BENEFITS. From and after the Effective Date, to the
extent required by section 1129(a)(13) of the Bankruptcy Code, Reorganized
Archibald shall continue to pay all retiree benefits (as defined in section 1114
of the Bankruptcy Code, but not including payments under deferred compensation
agreements), if any, established or maintained by the Debtors prior to the
Effective Date.

          12.13   SATURDAY, SUNDAY OR LEGAL HOLIDAY. If any payment or act under
the Plan is required to be made or performed on a date that is not a Business
Day, then the making of such payment or the performance of such act may be
completed on the next succeeding Business Day, but shall be deemed to have been
completed as of the required date.

          12.14   SECTION 1145 EXEMPTION. To the fullest extent permitted under
section 1145 of the Bankruptcy Code, the offer and sale of the New Common Stock
and New Subordinated Notes shall be exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended, and any state or local law
requiring registration for offer or sale of a security registration or licensing
of an issuer of, underwriter of, or broker or dealer in, such New Common Stock
and New Subordinated Notes. The offer and sale of the New Common Stock and New
Subordinated Notes are deemed to be a public offering of the New Common Stock
and the New Subordinated Notes.

          12.15   SECTION 1146 EXEMPTION. Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of the New Common Stock and
the New Subordinated Notes under the Plan or the making or delivery of any
instrument of transfer pursuant to, in implementation of, or as contemplated by,
the Plan or the revesting, transfer or sale of any real or personal property of
the Debtors pursuant to, in implementation of, or as contemplated by, the Plan
shall not be taxed under any state or local law imposing a stamp tax, transfer
tax, sales tax or similar tax or fee.

          12.16   SEVERABILITY. If any term or provision of the Plan is held by
the Bankruptcy Court prior to or at the time of Confirmation to be invalid, void
or unenforceable, the Bankruptcy Court shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void or unenforceable, and such term or provision
shall then be applicable as so altered or interpreted. In the event of any such
holding, alteration, or interpretation, the remainder of the terms and
provisions of the Plan may, at the Debtors' option remain in full force and
effect and not be deemed affected. However, the Debtors reserve the right not to
proceed to Confirmation or consummation of the Plan if any such ruling occurs.
The Confirmation Order shall constitute a judicial determination and shall
provide that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.

                                       23
<Page>

          12.17   HEADINGS. The headings used in this Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any manner
affect the provisions of the Plan.


                             Fannie May Holdings, Inc.


                             --------------------------
                             Name: Ted A. Shepherd
                             Title: President and Chief Operating Officer


                             Archibald Candy Corporation


                             ---------------------------
                             Name: Ted A. Shepherd
                             Title: President and Chief Operating Officer

                                       24

</TEXT>
</DOCUMENT>
