-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RhaeOUQ/si2MENjmHoSrL+NTabLNNxXjNhT/TsKEEaVmUX10RoYGSXpB4mRx3sAx Qh+CbSED9hwfK+tMA6lzZQ== 0000902664-07-003555.txt : 20071217 0000902664-07-003555.hdr.sgml : 20071217 20071217170914 ACCESSION NUMBER: 0000902664-07-003555 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20071217 DATE AS OF CHANGE: 20071217 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ASCENDIA BRANDS, INC. CENTRAL INDEX KEY: 0000843494 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 752228820 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-80632 FILM NUMBER: 071310707 BUSINESS ADDRESS: STREET 1: 100 AMERICAN METRO BOULEVARD STREET 2: SUITE 108 CITY: HAMILTON STATE: NJ ZIP: 08619 BUSINESS PHONE: 609-219-0930 MAIL ADDRESS: STREET 1: 100 AMERICAN METRO BOULEVARD STREET 2: SUITE 108 CITY: HAMILTON STATE: NJ ZIP: 08619 FORMER COMPANY: FORMER CONFORMED NAME: CENUCO INC DATE OF NAME CHANGE: 20030102 FORMER COMPANY: FORMER CONFORMED NAME: VIRTUAL ACADEMICS COM INC DATE OF NAME CHANGE: 20000110 FORMER COMPANY: FORMER CONFORMED NAME: DONNEBROOKE CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Prentice Capital Management, LP CENTRAL INDEX KEY: 0001326150 IRS NUMBER: 731728931 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 900 THIRD AVENUE, 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: (212) 756-8040 MAIL ADDRESS: STREET 1: 900 THIRD AVENUE, 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 sc13da.txt ASCENDIA BRANDS, INC. - ------------------------- ----------------------------------------------------------------------------------------------- SEC POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM 1746 (11-02) ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. - ------------------------------------------------------------------------------------------------------------------------- -------------------------------- UNITED STATES OMB APPROVAL -------------------------------- SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235-0145 -------------------------------- WASHINGTON, D.C. 20549 Expires: February 28, 2009 -------------------------------- Estimated average burden hours per response . . . . . 14.5 --------------------------------
SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 8)* Ascendia Brands, Inc. - -------------------------------------------------------------------------------- (Name of Company) Common Stock, par value $0.001 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 15670X104 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Mathew Hoffman, Esq. Eleazer Klein, Esq. Prentice Capital Management, LP Schulte Roth & Zabel LLP 623 Fifth Avenue, 32nd Floor 919 Third Avenue New York, NY 10022 New York, NY 10022 (212) 756-8040 (212) 756-2376 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 14, 2007 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss.240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 10573643.2 SCHEDULE 13D - --------------------------------- ---------------------------- CUSIP NO. 15670X104 PAGE 2 OF 6 PAGES - --------------------------------- ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Prentice Capital Management, LP 73-1728931 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 4,512,482 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 4,512,482 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,512,482 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 9.99% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- SCHEDULE 13D - --------------------------------- ---------------------------- CUSIP NO. 15670X104 PAGE 3 OF 6 PAGES - --------------------------------- ---------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Michael Zimmerman - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 4,512,482 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 4,512,482 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,512,482 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (see Item 5) 9.99% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- SCHEDULE 13D - --------------------------------- ---------------------------- CUSIP NO. 15670X104 PAGE 4 OF 6 PAGES - --------------------------------- ---------------------------- AMENDMENT NO.8 TO SCHEDULE 13D Reference is made to the Statement on Schedule 13D filed on July 10, 2006, as amended on August 7, 2006, November 17, 2006, December 29, 2006, January 5, 2007, February 13, 2007, October 25, 2007 and November 21, 2007 (the "Schedule 13D"), on behalf of Prentice Capital Management, LP ("Prentice Capital Management") and Michael Zimmerman ("Mr. Zimmerman" and, together with Prentice Capital Management, the "Reporting Persons"), relating to the Common Stock, par value $0.001 per share, of Ascendia Brands, Inc., a Delaware corporation (the "Company"). Unless the context otherwise requires, references herein to the "Shares" are to the Common Stock of the Company. Capitalized terms used herein and not otherwise defined have the meanings given to them in the Schedule 13D. The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Act. Each of Prentice Capital Management and Mr. Zimmerman disclaims beneficial ownership of all of the Shares reported in this Schedule 13D. ITEM 4. PURPOSE OF TRANSACTION Item 4 of the Schedule 13D is hereby amended to include the following: On December 14, 2007, Prentice Capital Management and its affiliates and the Company signed a non-binding letter of intent ("LOI") regarding an acquisition of a new series of preferred stock of the Company (the "Series C Preferred Stock"). Pursuant to the LOI, one or more entities managed or advised by Prentice Capital Management (the "Prentice Investors") and other accredited investors that are acceptable to the Prentice Investors (collectively the "Investors") would invest a minimum of $25,000,000 in 25,000 shares of Series C Preferred Stock at a price of $1,000 per share. The LOI represents an indication of intention and does not constitute a binding commitment, and, except for the Binding Provisions (as defined in the LOI), does not create a legal obligation on the part of any party. The description of the LOI contained herein is a summary only, and is qualified in its entirety by the terms of the LOI, which is filed as Exhibit S hereto and is incorporated herein by reference. The Series C Preferred Stock would be senior to all classes of capital stock of the Company with respect to distributions upon liquidation, dissolution, or winding up of the Company and redemption payments. The approval of at least 50.1% of the then outstanding Series C Preferred Stock would be required to approve certain significant corporate actions as described in the LOI. In addition, the LOI contemplates that the Board of Directors of the Company would be reconstituted in a manner satisfactory to Prentice Capital Management, including the right SCHEDULE 13D - --------------------------------- ---------------------------- CUSIP NO. 15670X104 PAGE 5 OF 6 PAGES - --------------------------------- ---------------------------- of affiliates of Prentice Capital Management to appoint a majority of the members of the Board of Directors. Under the terms of the LOI, the Series C Preferred Stock would be convertible into shares of Common Stock at a conversion price of $0.25 per share (subject to renegotiation based on the average closing bid price of the Common Stock prior to closing as described in the LOI). The conversion price will be subject to adjustment as a result of anti-dilution provisions. For so long as the Company and the Investors are proceeding with negotiation of the transaction described in the LOI, the Investors will have access to the books, records and properties of the Company and to the directors, officers, employees, accountants, attorneys and other representatives of the Company and will have access to material nonpublic information. Whether or not the transactions contemplated by the LOI are consummated, the Company will pay the Investors for all reasonable out of pocket fees and expenses incurred in relation to due diligence and investment negotiation and documentation (including third party external legal expenses), such overall fees and expenses not to exceed $400,000 if the closing occurs on or prior to December 31, 2007 (if the closing occurs after December 31, 2007, the Company and the Investors will negotiate in good faith an acceptable fee cap). The Company is responsible for its own fees and expenses. The obligations of the Investors and the Company to consummate the closing of the transactions contemplated in the LOI will be subject to customary conditions precedent as described therein. The LOI contemplates that the closing of the transactions contemplated thereby will occur on or prior to December 31, 2007. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE COMPANY. Item 6 of the Schedule 13D is hereby amended to include the following: As described in Item 4 above, Prentice Capital Management and its affiliates and the Company signed a non-binding letter of intention regarding an acquisition of Series C Preferred Stock. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 of the Schedule 13D is hereby amended to include the following: Exhibit S - Letter of Intention dated as of December 14, 2007, by and among Prentice Capital Management and its affiliates and the Company. SCHEDULE 13D - --------------------------------- ---------------------------- CUSIP NO. 15670X104 PAGE 6 OF 6 PAGES - --------------------------------- ---------------------------- SIGNATURES After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: December 17, 2007 PRENTICE CAPITAL MANAGEMENT, LP By: /S/ MICHAEL WEISS ---------------------------- Name: Michael Weiss Title: Chief Financial Officer MICHAEL ZIMMERMAN /S/ MICHAEL ZIMMERMAN ---------------------------- Michael Zimmerman EX-99 2 exhibits.txt EXHIBIT S PRENTICE CAPITAL MANAGEMENT, LP 623 Fifth Avenue 32nd Floor New York, New York 10022 Telephone (212) 756-8045 Facsimile (212) 756-1480 December 14, 2007 CONFIDENTIAL Ascendia Brands, Inc. 100 American Metro Boulevard Suite 108 Hamilton, NJ 08619 Gentlemen: This letter of intent ("LOI") will set forth the interest of Prentice Capital Management LP. and its affiliates regarding an acquisition of Series C Preferred Stock of Ascendia Brands, Inc. (the "Company") on the terms and conditions generally set forth herein (the "Transaction"). This LOI shall be non-binding except for the Binding Provisions (as defined below). This LOI will furnish a basis for the preparation of definitive documentation evidencing and implementing the Transaction as follows: ISSUER: The Company. INVESTORS: One or more entities managed or advised by Prentice Capital Management, L.P. (the "PRENTICE INVESTORS") and other accredited investors that are acceptable to the Prentice Investors (collectively, the "INVESTORS"). INVESTMENT A minimum of Twenty-Five Million Dollars ($25,000,000) (the AMOUNT: "MINIMUM INVESTMENT AMOUNT"); provided, however, the Investment Amount from the Prentice Investors shall not exceed Twenty-Five Million Dollars ($25,000,000). The Minimum Investment Amount shall include the conversion of the Two Million Dollar ($2,000,000) unsecured loan from Prencen Lending LLC into Shares (as defined below). TYPE OF 25,000 shares (the "Shares") of a new series of preferred SECURITY: stock of the Company, which new series shall be designated Series C Preferred Stock (the "Series C Preferred Stock"), to be issued in respect of the Minimum Investment Amount. The material rights, preferences and privileges of the Series C Preferred Stock are set forth below under "Rights, Preferences and Privileges of the Series C Preferred Stock". The transactions contemplated by this LOI, including the issuance and sale of the Shares, are referred to Ascendia Brands, Inc. December 14, 2007 Page 2 of 8 herein as the "FINANCING". PRICE PER SHARE: $1,000 per share (the "SERIES C ORIGINAL COST") USE OF PROCEEDS: The proceeds from the sale of the Shares shall be used to pay down a certain amount of the Company's revolver (without permanent reduction thereof) and to fund working capital requirements and other general corporate purposes, in each case, as agreed to by the Company and the Investors prior to the Closing (as defined below). RIGHTS, (1) RANKING. The Series C Preferred Stock shall be senior PREFERENCES AND to all classes of capital stock of the Company with PRIVILEGES OF THE respect to distributions upon voluntary or involuntary, SERIES C liquidation, dissolution or winding up of the Company PREFERRED STOCK: and redemption payments. (2) DIVIDEND PROVISIONS. No dividends shall be paid upon any class or series of capital stock of the Company unless the holders of Series C Preferred Stock shall be entitled to receive dividends on a pari passu basis with any dividends paid on such other class or series of capital stock of the Company. (3) LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of Series C Preferred Stock shall be entitled to receive, prior and in preference to any payments on the common stock of the Company (the "COMMON STOCK") or any other class or series of capital stock of the Company, an amount equal to the Series C Original Cost multiplied by the number of then-outstanding shares of Series C Preferred Stock, plus all accrued but unpaid dividends, if any, relating thereto (the "SERIES C LIQUIDATION PREFERENCE AMOUNT"). (4) REDEMPTION. In the event of any Fundamental Transaction (as defined in the Secured Convertible Note issued by the Company to Prencen Lending LLC in the aggregate principal amount of $76 million on February 9, 2007), each holder of Series C Preferred Stock may require the Company to redeem, prior to any payment to any other class or series of capital stock of the Company, such holder's shares of Series C Preferred Stock in cash at a price equal to 120% of the Series C Liquidation Preference Amount for the shares of Series C Preferred Stock being redeemed. (5) CONVERSION. Each holder of shares of Series C Preferred Ascendia Brands, Inc. December 14, 2007 Page 3 of 8 Stock shall have the right, at its option, to convert its shares of Series C Preferred Stock into such number of shares of Common Stock determined by: (i) multiplying the number of shares of Series C Preferred Stock to be converted by the Series C Original Cost (and adding to such product the amount of any accrued but unpaid dividends, if any, with respect to such shares of Series C Preferred Stock to be converted); and (ii) dividing the result obtained pursuant to clause (i) above by the Series C Conversion Price then in effect. The "SERIES C CONVERSION PRICE" shall initially be $0.25, and shall be subject to adjustment as a result of the anti-dilution provisions of the Series C Preferred Stock, which shall include full-ratchet anti-dilution protection in favor of the Investors.1 The Series C Preferred Stock shall contain no prohibitions or restrictions (including blockers) on the ability of the Investors to convert their shares of Series C Preferred Stock into Common Stock. Accordingly, immediately following the initial date of issuance of the Shares (assuming the Minimum Investment Amount), the Shares shall be convertible into approximately 100,000,000 shares of Common Stock. (6) VOTING RIGHTS. The Series C Preferred Stock and Common Stock shall vote together as a class except as required by law. The holder of each share of Series C Preferred Stock shall have the right to that number of votes per share equal to the number of shares of Common Stock issuable upon conversion of a share of Series C Preferred Stock. (7) APPROVAL RIGHTS. In addition to the rights set forth in paragraph (6) above, for so long as any shares of Series C Preferred Stock are outstanding, the approval of at least 50.1% of the then outstanding Series C Preferred Stock (the "MAJORITY SERIES C HOLDERS") shall be required to approve certain corporate actions, including, without limitation, (i) entering into or consummating any Fundamental Transaction; (ii) authorizing or issuing any shares of capital stock that are senior to or pari passu with the Series C Preferred Stock; (iii) entering into affiliate transactions; (iv) redeeming any shares of capital stock of the Company (other than the Series C Preferred Stock); (v) declaring or paying any dividends on the capital stock 1. If the average closing bid price of the Common Stock for the ten (10) trading days prior to the Closing is less than $0.20, the Company and the Investors shall renegotiate the initial Series C Conversion Price. Ascendia Brands, Inc. December 14, 2007 Page 4 of 8 of the Company; (vii) amending the Certificate of Incorporation or by-laws of the Company, (viii) approving the restructuring plan of the Company (which restructuring plan shall be satisfactory in all respects to the Majority Series C Holders), (ix) the engagement of any financial advisor or consultant; and (x) to hire or terminate any executive officer of the Company (including all material terms relating thereto) and to amend or modify the terms of any executive officer's contractual arrangements with the Company. CONDITIONS The obligations of the Investors and, with respect to PRECEDENT: clauses (a), (d), (g) and (h) below, the Company to consummate the closing of the Financing (the "CLOSING") shall be subject to customary conditions precedent, which shall include, without limitation: (a) The Company and the Investors shall have executed and delivered a Preferred Stock Purchase Agreement (the "PREFERRED STOCK PURCHASE AGREEMENT") in form and substance satisfactory to the Investors and the Company, including representations, warranties, covenants, indemnities and conditions precedent customary for transactions of this type. The Company and the Investors shall engage in discussions regarding appropriate protections for the minority shareholders to the extent deemed appropriate by the parties for a transaction of this nature and acceptable to each of the parties. (b) No event, circumstance or fact shall have occurred that has had or could reasonably be expected to have a material adverse effect on the business, assets, properties or condition (financial or otherwise) of the Company and its subsidiaries. (c) The Company and its subsidiaries shall have obtained all required licenses, waivers, consents and approvals, governmental and otherwise, in connection with the transactions contemplated hereby. (d) The First Lien Loan Documents and the Second Lien Loan Documents (each as defined below) shall have been amended in a manner acceptable to the Investors (in their sole discretion) and the Company. The term (i) "First Lien Loan Documents" means the credit agreement and the other loan documents by and among the Company, as borrower, the subsidiaries of the Company party thereto, and Wells Fargo Foothill, Inc. and/or the other first lien lenders who are or Ascendia Brands, Inc. December 14, 2007 Page 5 of 8 may become party thereto, and the administrative agent named therein and (ii) "Second Lien Loan Documents" means the credit agreement and the other loan documents by and among the Company, as borrower, the subsidiaries of the Company party thereto, and Watershed Capital Asset Management, L.L.C. and funds managed by Watershed Capital Asset Management, L.L.C. and/or the other second lien lenders who are or may become party thereto, and the administrative agent named therein. (e) The Investors shall have received a satisfactory legal opinion from outside counsel to the Company customary for transactions of this type. (f) The Certificate of Designations for the Series C Preferred Stock shall be acceptable in all respects to the Investors and shall have been filed with the Secretary of State of Delaware. (g) The Investors and the Company shall have received such other agreements, instruments and other documents as they may determine are customary for the Financing, in each case in form and substance reasonably satisfactory to the Investors and the Company. (h) The Company shall have received a fairness opinion from an investment bank acceptable to the Restructuring Committee of the Board of the Directors of the Company and the Investors with respect to the Financing. (i) The Company shall have obtained any and all consents required under the rules and regulations of the American Stock Exchange. (j) The Company shall have previously delivered duly executed voting agreements, in a form acceptable in all respects to the Investors, from certain material shareholders of the Company owning more than fifty percent (50%) of the outstanding Common Stock whereby such shareholders agree to vote their shares in favor of the Financing. BOARD The Board of Directors of the Company shall be reconstituted COMPOSITION AND in a manner satisfactory to Prentice Capital Management, LP., REPRESENTATION: which shall include the right of affiliates of Prentice Capital Management, LP to appoint a majority of the members of the Board of Directors of the Company (certain of the Board members appointed by Prentice shall qualify as "independent" directors Ascendia Brands, Inc. December 14, 2007 Page 6 of 8 under the rules and regulations of the American Stock Exchange, such that a majority of the Board shall be "independent"). TIMING: In light of the Investors' understanding of the Company's liquidity needs, the Preferred Stock Purchase Agreement shall be executed by no later than December 20, 2007 and the Closing shall occur on or prior to December 31, 2007. ACCESS: For so long as the Company and the Investors are proceeding with negotiation of the transaction described in this LOI, the Company shall afford the Investors and their respective counsel and other representatives reasonable access to the books, records and properties of the Company and to the directors, officers, employees, accountants, attorneys and other representatives of the Company, in each case so as to enable the Investors to make such investigations of the Company in connection with the Financing contemplated hereby as the Investors reasonably deem appropriate, provided that Investors do not interfere with normal operating requirements of the Company and provided that the Investors and their counsel and representatives agree to maintain the confidentiality of any information received as a result of such access and to use any such information solely for purposes of evaluating a potential transaction with the Company as contemplated by this LOI. Upon execution of this LOI, the Prentice Investors shall have the right, in coordination with the Company, to negotiate with the lenders party to the First Lien Loan Documents and Second Lien Loan Documents. FEES AND Whether or not the transactions contemplated hereby are EXPENSES: consummated, the Company shall pay the Investors for all reasonable out of pocket fees and expenses incurred in relation to due diligence and investment negotiation and documentation (including third party external legal expenses), such overall fees and expenses not to exceed $400,000 if the Closing occurs on or prior to December 31, 2007 (if the Closing occurs after December 31, 2007, the Company and the Investors shall negotiate in good faith an acceptable fee cap). The Company shall be responsible for its own fees and expenses. ALTERNATIVE In the event the Company determines that it will not be able FINANCING to obtain the requisite consent of the shareholders to approve TERMS: the Financing, the Company and the Investors shall, in good faith, discuss the terms of an alternative financing that are mutually acceptable to the Company and the Investors. NATURE OF This LOI represents an indication of intention and does not OBLIGATIONS: constitute a binding commitment with respect to a transaction, and, except for the matters described under "Access", "Fees and Ascendia Brands, Inc. December 14, 2007 Page 7 of 8 Expenses", "Nature of Obligations", "Expiration" and "Governing Law" (which are intended to be, and are, the sole binding provisions (the "BINDING PROVISIONS")), does not create a legal obligation on the part of any party. A binding commitment with respect to the Financing will result only from execution of definitive written transaction agreements acceptable to each of the Company (as approved by the Board's Restructuring Committee in its sole discretion and the Company's full Board thereafter in its sole discretion) and the Investors in their sole discretion. Accordingly, except for the express terms of the Binding Provisions, neither party shall have any obligation under this LOI (express or implied) and is not restricted in any way hereunder, and shall have no liability to the other hereunder. EXPIRATION: This LOI shall expire unless executed by the Company on or prior to 5:00 p.m. New York time on December 14, 2007. Once executed, this LOI may be terminated by either party upon at least 12 hours' advance written notice (including without limitation via email) to a representative of the other party (which, in the case of the Prentice Investors, shall be addressed to both Mathew Hoffman and Michael Gross), except that the Binding Provisions of this LOI shall survive any termination of this LOI by either party and provided that either party may cease or terminate or suspend discussions or negotiations at any time for any reason or no reason. GOVERNING LAW: New York. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Ascendia Brands, Inc. December 14, 2007 Page 8 of 8 If the foregoing terms and conditions are acceptable to you, please so indicate by signing this LOI where indicated below and returning the same to the undersigned via facsimile no later than 5:00 p.m. (New York time) on December 14, 2007. Sincerely, Agreed to and Accepted: Prentice Capital Management, LP Ascendia Brands, Inc. By: /s/ Mathew Hoffman By: /s/ Andrew Sheldrick ------------------------------- ------------------------------- Name: Mathew Hoffman Name: Andrew Sheldrick Title: General Counsel Title: General Counsel -----END PRIVACY-ENHANCED MESSAGE-----