Amendment No. 2 to Forbearance Agreement between Archibald Candy Corporation and Noteholders

Summary

This amendment updates the Forbearance Agreement between Archibald Candy Corporation and several noteholders, including Massachusetts Mutual Life Insurance Company and related entities. The amendment changes certain definitions, extends the termination date to June 7, 2002, and confirms that all other terms of the original agreement remain in effect. Both the company and the noteholders confirm their authority to enter into this amendment, and its effectiveness is contingent on the execution of a related amendment with other parties.

EX-4.2 4 a2084294zex-4_2.txt EXHIBIT 4.2 EXHIBIT 4.2 AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT This AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT (this "Amendment") is entered into as of May 30, 2002, by and among Archibald Candy Corporation, an Illinois corporation (the "Company"), and each of the entitles identified on the signature pages hereto as "Noteholders" (collectively, the "Consenting Holders"). RECITALS: A. The Company and certain of the Consenting Holders are parties to the Forbearance Agreement dated as of February 28, 2002, as amended by Amendment No. 1 thereto dated as of April 30, 2002 (the "Forbearance Agreement"). B. The Company and the Consenting Holders desire to modify certain terms and provisions of the Forbearance Agreement, including, without limitation, modifying the definition of "Termination Event." NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. DEFINITIONS. All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Forbearance Agreement. Section 2. AMENDMENTS TO FORBEARANCE AGREEMENT. The Forbearance Agreement is, as of the Effective Date (as defined below), hereby amended as follows: 2.1 Section 1.2 of the Forbearance Agreement is amended by amending and restating clause (b) of the definition of "Forbearance Default" in its entirety as follows: (b) the termination of that certain Forbearance Agreement dated as of December 31, 2001 (as amended by Amendment No. 1 thereto dated as of February __, 2002, Amendment No. 2 thereto dated as of March 1, 2002, Amendment No. 3 thereto dated as of April 30, 2002 and Amendment No. 4 thereto dated as of May 30, 2002) among the Company, Holdings, Archibald Candy (Canada) Corporation, a Canadian corporation, and the "Agent" and "Lenders" under the Credit Agreement without the execution and delivery of another agreement containing terms reasonably satisfactory to the Consenting Holders (other than if the result of a breach by the Consenting Holders of their obligations under Section 2.1 hereof). 2.2 Section 1.2 of the Forbearance Agreement is further amended by amending the definition of "Termination Event" by deleting the reference to "May 31, 2002" contained therein and substituting "June 7, 2002" therefor. Section 3. REPRESENTATIONS, WARRANTIES AND CONSENT. 3.1 In consideration of the agreement of the Consenting Holders to the amendments to the Forbearance Agreement contained herein, the Company hereby represents and warrants to the Consenting Holders as of the date hereof as follows: (a) The execution, delivery and performance of this Amendment by the Company is within its corporate powers and has been duly authorized by all necessary corporate action on its part, and this Amendment constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. (b) The Indenture, the Notes and the Security Documents to which the Company is a party constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms. (c) Except for the Existing Default, no Default or Indenture Event of Default exists. 3.2 Each Consenting Holder hereby represents and warrants severally as to itself (and not jointly or jointly and severally) to the Company as of the date hereof that it owns Notes. Concurrently with the execution and delivery of this Amendment, Ropes & Gray, counsel to the Consenting Holders, is providing the Company a schedule stating the aggregate face amount of Notes held by the Consenting Holders. 3.3 Each Consenting Holder hereby acknowledges, agrees and consents to the Company's execution and delivery of Amendment No. 4 to the Forbearance Agreement among the Company, Holdings, Archibald Candy (Canada) Corporation, a Canadian corporation, and the "Agent" and "Lenders" under the Credit Agreement, substantially in the form of EXHIBIT A attached hereto ("Amendment No. 4 to CIT Forbearance Agreement"), and to the Company's taking all actions expressly contemplated thereby. Section 4. RATIFICATION. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Forbearance Agreement are ratified and confirmed and shall continue in full force and effect. Section 5. CONDITIONS TO EFFECTIVENESS. The Amendment shall become effective as of the date (the "Effective Date") each of the following conditions precedent is satisfied: 5.1 The Company and the Consenting Holders shall have executed and delivered this Amendment. 5.2 Amendment No. 4 to CIT Forbearance Agreement shall have been executed and delivered. -2- Section 6. MISCELLANEOUS. 6.1 HEADINGS. Section heading in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 6.2 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES. 6.3 COUNTERPARTS. This Amendment may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. 6.4 CONTINUED EFFECTIVENESS. The terms of the Indenture remain unchanged, and all such terms shall remain in full force and effect and are hereby confirmed and ratified. 6.5 PARTIES. This Amendment shall be binding upon, and inure to the benefit of, the parties hereto and their successors and permitted assigns. Nothing in this Amendment, express or implied, shall give to any Person, other than the parties hereto, any benefit or any legal or equitable right, remedy or claim under this Amendment. [signature pages follow] -3- IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to Forbearance Agreement to be executed as of the date first set forth above by their respective duly authorized officers. COMPANY: ARCHIBALD CANDY CORPORATION ADDRESS: By: /s/ Ted. A. Shepherd ---------------------------------- Name: Ted. A. Shepherd 1137 W. Jackson Boulevard Title: President and Chief Chicago, IL 60607 Operating Officer Attention: President Telephone: 312 ###-###-#### Facsimile: 312 ###-###-#### -4- NOTEHOLDERS: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY ADDRESS: By: /s/ Steven J. Katz ---------------------------------- Name: Steven J. Katz MASS MUTUAL Title: Second Vice President and C/O D.L. BABSON & Co. Associate General Counsel 1500 Main Street Suite 2800 Springfield, MA 01115 Attn: Steven J. Katz Telephone: 413 ###-###-#### Fax: 413 ###-###-#### MASSMUTUAL/DARBY CBO LLC By: MassMutual/Darby CBO IM, Inc. as LLC Manager ADDRESS: By: /s/ [ILLEGIBLE] ---------------------------------- Name: Same as above Title: Vice President MASSMUTUAL HIGH YIELD PARTNERS II, LLC By: HYP Management, Inc. As Managing Member ADDRESS: By: /s/ [ILLEGIBLE] ---------------------------------- Name: Same as above Title: Vice President -5- SAAR HOLDINGS CDO LIMITED By: Mass Mutual Life Insurance Co., As Collateral Manager ADDRESS: By: /s/ Steven J. Katz ---------------------------------- Name: Steven J. Katz Same as above Title: Second Vice President and Associate General Counsel PERSEUS CDO I, LIMITED By: Mass Mutual Life Insurance Co. as Portfolio Manager By: /s/ Steven J. Katz ---------------------------------- ADDRESS: Name: Steven J. Katz Title: Second Vice President and Same as above Associate General Counsel SOMERS CDO, LIMITED By: Mass Mutual Life Insurance Co. as Collateral Manager ADDRESS: By: /s/ Steven J. Katz ---------------------------------- Name: Steven J. Katz Same as above Title: Second Vice President and Associate General Counsel MASSMUTUAL GLOBAL CBO I, LIMITED By: Mass Mutual Life Insurance Co. As Collateral Manager ADDRESS: By: /s/ Steven J. Katz ----------------------------------- Name: Steven J. Katz Same as above Title: Second Vice President and Associate General Counsel -6- SIMSBURY CLO, LIMITED By: Mass Mutual Life Insurance Co. As Collateral Manager ADDRESS: By: /s/ Steven J. Katz ---------------------------------- Name: Steven J. Katz Same as above Title: Second Vice President and Associate General Counsel MASSMUTUAL CORPORATE VALUE PARTNERS LIMITED By: Mass Mutual Life Insurance Co. As Investment Manager ADDRESS: By: /s/ Steven J. Katz ---------------------------------- Name: Steven J. Katz Same as above Title: Second Vice President and Associate General Counsel -7- BARCLAYS BANK PLC ADDRESS: By: /s/ Steven J. Landzberg ---------------------------------- Name: Steven J. Landzberg Barclays Capital Title: Director 222 Broadway Avenue, 10th Floor New York, New York 10038 -8- DELAWARE STREET CAPITAL, L.L.C. ADDRESS: By: /s/ Andrew G. Bluhm ---------------------------------- Name: Andrew G. Bluhm 900 N. Michigan Avenue Title: Managing Partner Chicago, IL 60611 Phone: (312) 915-2842 Fax: (312) 915-3053 -9- CREDIT SUISSE ASSET MANAGEMENT, LLC As Agent for the attached list of thirty-three Beneficial Owners holding an aggregate $12,205,500 Face amount Archibald Candy 10.25% Senior Notes. ADDRESS: By: /s/ Philip L. Schantz ----------------------------------- Name: Philip L. Schantz 15th Floor Title: Director 456 Lexington Avenue New York, NY 10017-3140 -10- CSAM-SYDNEY CSAM HIGH GRADE BOND FUND POLICEMEN & FIREMEN RETIRE SYSTEM--DETROIT DIOCESE OF BUFFALO FIXED EXIDE CORP MASTER RETIREMENT TR--FIXED FIARFAX CTY URS - FIXED INCOME PORTFOLIO CREDIT SUISSE ASSET MANAGEMENT INCOME FD PUBLIC EMPLOYEES RETIREMENT SYS OF IDAHO MEDIOLANUM TOP MANAGERS GLOBAL HY FUND NESTLE USA CITY OF NEW YORK EMP RET SYS HIGH YIELD CITY OF NEW YORK POLICE PEN FD HIGH YLD CITY OF NEW YORK TEACHER'S RETIREMENT SYSTEM NORTHWESTERN UNIVERSITY HYP--FONDS (NY) PE CORPORATION (NY) CREDIT SUISSE INSTITUTIONAL U.S. CORE CREDIT SUISSE INSTITUTIONAL HIGH YIELD NABISCO FOODS RTR TOBACCO CO--DOMESTIC HIGH YIELD SAKS FIFTH AVENUE PENSION PLAN SEI GLOBAL - HIGH YIELD FIXED INCOME UNITED PARCEL SERVICE RETIREMENT PLAN MATSUSHITA ELECTRIC EMP. PENSION PLAN UNIVERSITY OF MARYLAND NORTHROP GRUMMAN CORP--HY PORTFOLIO TOYOTA MOTOR EMPLOYEES PENSION CREDIT SUISSE FIXED INCOME FUND CS GLOBAL CORE PLUS FIXED INCOME MOTHER CREDIT SUISEE HIGH YIELD BOND FUND DIOCESE OF BUFFALO DIOCESE OF BUFFALO WESTMORELAND COUNTY CS GLOBAL FIXED INCOME FUND -11- CSAM HY FOCUS ADDRESS: By: /s/ David H. Lemer ---------------------------------- Name: David H. Lemer 466 Lexington Avenue, 14th Floor Title: Authorized Signatory New York, NY 10017 BEACBO-1 ADDRESS By: /s/ David H. Lemer ---------------------------------- Name: David H. Lemer Same as above Title: Authorized Signatory BEACBO-2 ADDRESS By: /s/ David H. Lemer ---------------------------------- Name: David H. Lemer Same as above Title: Authorized Signatory -12- DEBT STRATEGIES FUND, INC. ADDRESS By: /s/ Michael Brown ---------------------------------- Name: Michael Brown 800 Scudders Mill Road-Section 1B Title: Authorized Signatory Plainsboro, New Jersey 08536 MASTER U.S. HIGH YIELD TRUST ADDRESS: By: /s/ Michael Brown ---------------------------------- Name: Michael Brown Same as above Title: Authorized Signatory MERRILL LYNCH VARIABLE SERIES FUND, INC. - MERRILL LYNCH HIGH CURRENT INCOME FUND ADDRESS: By: /s/ Michael Brown ---------------------------------- Name: Michael Brown Same as above Title: Authorized Signatory MERRILL LYNCH GLOBAL CURRENCY BOND SERIES - U.S. HIGH YIELD PORTFOLIO ADDRESS: By: Merrill Lynch Investment Managers, L.P. as Investment Advisor By: /s/ Michael Brown ---------------------------------- Name: Michael Brown Same as above Title: Authorized Signatory -13- PUTNAM HIGH YIELD TRUST PUTNAM HIGH YIELD ADVANTAGE FUND PUTNAM VARIABLE TRUST--PUTNAM VT HIGH YIELD TRUST PUTNAM MASTER INCOME TRUST PUTNAM PREMIER INCOME TRUST PUTNAM MASTER INTERMEDIATE INCOME TRUST PUTNAM DIVERSIFIED INCOME FUND PUTNAM FUNDS TRUST--PUTNAM HIGH YIELD TRUST II PUTNAM MANAGED HIGH YIELD TRUST PUTNAM STRATEGIC INCOME FUND PUTNAM VARIABLE TRUST--PUTNAM VT DIVERSIFIED INCOME FUND TRAVELERS SERIES FUND, INC.--PUTNAM DIVERSIFIED INCOME PORTFOLIO ADDRESS: By: Putnam Investment Management, LLC By: /s/ John R. Verani ---------------------------------- Name: John R. Verani Title: Senior Vice President PUTNAM HIGH YIELD MANAGED TRUST PUTNAM HIGH YIELD FIXED INCOME FUND, LLC ADDRESS: By: Putnam Fiduciary Trust Company By: /s/ John R. Verani ---------------------------------- Name: John R. Verani Title: Senior Vice President STRATEGIC GLOBAL FUND--HIGH YIELD FIXED INCOME (PUTNAM) FUND PUTNAM WORLD TRUST II--PUTNAM YIELD BOND FUND MARSH & MCLENNAN COMPANIES, INC. U.S. RETIREMENT FUND ADDRESS: By: The Putnam Advisory Company, LLC By: /s/ John R. Verani ---------------------------------- Name: John R. Verani Title: Senior Vice President -14- SAGAMORE HILL HUB FUND LTD. ADDRESS: By: /s/ Mark May ------------------------------- Name: Mark May c/o Sagamore Hill Capital Title: 2 Greenwich Office Park ------------- Greenwich, CT 06831 -15- EXHIBIT A FORM OF AMENDMENT NO. 4 TO THE CIT FORBEARANCE AGREEMENT [TO FOLLOW] -16-