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EXHIBIT 10.1    
  

 
  SENIOR PREFERRED FORBEARANCE AGREEMENT    
  

        This SENIOR PREFERRED FORBEARANCE AGREEMENT (this "Agreement") is entered into as of February 27, 2002, by and between Fannie May Holdings, Inc., a
Delaware corporation (the "Company"), and the persons named on the signature pages hereof as Holders (collectively, the "Holders"). 

RECITALS:  

        A.    The
Company and the Holders entered into that certain Stock Purchase Agreement, dated as of August 22, 1991 (as amended, the "Purchase Agreement"). 

        B.    As
a condition to the closing of the transactions contemplated by the Purchase Agreement, the Company adopted and filed with the Secretary of State of the State of
Delaware that certain Certificate of Designation relating to the 5% Senior Preferred Stock, no par value (the "Senior Preferred Stock"), pursuant to which the Senior Preferred Stock was created having
the rights, qualifications, limitations and restrictions set forth therein (the "Original Certificate of Designation"). 

        C.    On
June 28, 2001, the Company and the Holders entered into the Senior Preferred Amendment Agreement (the "Senior Preferred Amendment Agreement"), pursuant to which
the Company and the Holders agreed to certain amendments of the Original Certificate of Designation. The "Amended and Restated Certificate of Designation of 5% Senior Preferred Stock of Fannie May
Holdings, Inc.", which effected such amendments, was filed with the Secretary of State of the State of Delaware on June 28, 2001 (the "Amended Certificate of Designation"; collectively
with the Purchase Agreement, the Senior Preferred Amendment Agreement and the Senior Preferred Stock, the "Senior Preferred Documents"). 

        D.    The
Company and the Holders agree that, as of the date hereof, a total of 1,243.8558 shares of Senior Preferred Stock are issued and outstanding and held of record by the
Holders as set forth on the signature pages hereof (1,000 shares of which were issued in 1991 in connection with the Company's acquisition of Archibald Candy Corporation, an Illinois corporation
("Archibald"), and the remainder of which have been issued as paid-in-kind dividends since such original issuance). 

        E.    The
Company has failed to make a $3.0 million redemption payment to the Holders, which was due to be paid on January 15, 2002 pursuant to the Amended
Certificate of Designation (the "January 15, 2002 Redemption Payment"), and, as a result, all $10.5 million of the remaining redemption payments on the Senior Preferred Stock (the
"Remaining Redemption Payments") became due and owing on February 14, 2002 and has not been paid (the "Senior Preferred Default"). 

        F.    Pursuant
to the Amended Certificate of Designation, upon the Senior Preferred Default, the number of directors constituting the Company's Board of Directors (the "Board")
automatically is increased by one and the holders of the Senior Preferred Stock have the right to elect an individual to fill such newly created directorship and that director (the "Control Director")
shall have 51% of the total voting power of the Board. 

        G.    Archibald
is party to a Financing Agreement dated as of June 28, 2001 (as amended, supplemented or modified from time to time, the "CIT Financing Agreement") with
the lenders party thereto (the "Lenders") and The CIT Group/Business Credit, Inc., as Agent for the Lenders ("Agent"). Certain "Events of Default" (as defined therein) have occurred and are
continuing under the CIT Financing Agreement; however, the Agent and the Lenders have entered into a Forbearance Agreement with Archibald, the Company and Archibald Candy (Canada) Corporation dated as
of December 31, 2001 (as amended, supplemented or otherwise modified from time to time, the "CIT Forbearance Agreement"), pursuant to which the Lenders have agreed to forbear from exercising
their rights under the CIT Financing Agreement and to continue lending to Archibald despite the occurrence and continuance of such Events of Default until no later than March 1, 2002 (the "CIT
Forbearance Termination Date"). 

 

        H.    Archibald
has issued $170 million in aggregate principal amount of its 101/4% Senior Notes due 2004 (the "Notes") pursuant to that certain Indenture
dated as of July 2, 1997 (as amended, supplemented or otherwise modified from time to time, the "Indenture") by and between Archibald and The Bank of New York, as trustee. An "Event of Default"
(as defined therein) has occurred and is continuing under the Indenture; however, certain holders of the Notes (the "Consenting Noteholders") are willing to enter into a forbearance agreement (the
"Noteholders' Forbearance Agreement") with Archibald
pursuant to which the Consenting Noteholders are willing to agree for a limited period of time to forbear from exercising their rights under the Indenture and the Notes despite the occurrence and
continuance of such Event of Default. 

        I.    The
Agent and the Lenders are willing to extend the CIT Forbearance Termination Date beyond March 1, 2002 and the Consenting Noteholders are willing to enter into
the Noteholders' Forbearance Agreement, in each case, only if the Holders are willing to forbear from enforcing their respective rights that arise because of the Senior Preferred Default, subject to
the terms and conditions of this Agreement. 

        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.    

        1.1  The
following terms used in this Agreement shall have the meanings set forth below: 

        "Forbearance
Default" means any of the following: (a) the termination of the Noteholders' Forbearance Agreement without the execution and delivery of another agreement containing
terms reasonably satisfactory to the Holders (other than if the result of a breach by the Holders of their obligations under Section 2.1 hereof); (b) the termination of the CIT
Forbearance Agreement without the execution and delivery of another agreement among Archibald, the Agent and the Lenders containing terms reasonably satisfactory to the Holders (other than if the
result of a breach by the Holders of their obligations under Section 2.1 hereof); (c) the failure of the Company to comply at any time in any material respect with any of its obligations
under this Agreement; or (d) any warranty or representation made by the Company under or in connection with this Agreement shall prove to be false when made. 

        "Termination
Date" means the earlier to occur of (a) April 30, 2002 (or such later date as may be mutually agreed in writing by the Company and Holders owning of record a
majority of the outstanding Senior Preferred Stock) and (b) the date on which the Holders provide written notice to the Company of their election to declare the occurrence of the Termination
Date, which shall be no earlier than the fifth day following the date upon which a Forbearance Default occurs. 

        Section 2.    Agreement to Forbear.    

        2.1  On
the condition that the Lenders extend the CIT Forbearance Termination Date beyond March 1, 2002 and the Consenting Noteholders enter into the Noteholders'
Forbearance Agreement, the Holders shall refrain through the Termination Date from exercising their right to elect a Control Director or
taking any other action or exercising any of their rights and remedies under the Senior Preferred Documents or applicable law that may exist by virtue of the Senior Preferred Default. 

        2.2  Nothing
in this Agreement shall be construed as a waiver of or acquiescence to the Senior Preferred Default, which shall continue in existence subject only to the
agreement of the Holders, as set forth herein, not to enforce their rights or remedies until the Termination Date. 

        2.3  Except
as expressly provided herein, the execution and delivery of this Agreement shall not: (a) constitute an extension, modification or waiver of any aspect of
the Senior Preferred Documents; (b) give rise to any obligation on the part of the Holders to extend, modify or waive any term or condition of the Senior Preferred Documents; or (c) give
rise to any defenses or counterclaims to the 

2

 

right of the Holders to compel payment of the redemption payments or to otherwise enforce their rights or remedies under the Senior Preferred Documents. 

        2.4  Except
as expressly limited herein, the Holders hereby expressly reserve all of their rights and remedies under the Senior Preferred Documents and under applicable law
with respect to the Senior Preferred Default, including, without limitation, the accrual of interest in accordance with Section 1.5 of the Amended Certificate of Designation on the
January 15, 2002 Redemption Payment from January 15, 2002 and on all of the Remaining Redemption Payments from February 14, 2002. From and after the Termination Date, the Holders
shall be entitled to enforce the Senior Preferred Documents in accordance with their terms and applicable law. 

        2.5  Notwithstanding
anything to the contrary: (a) from and after the Termination Date, the Holders shall be free to exercise any and all of their rights and remedies
under the Senior Preferred Documents or applicable law that may exist by virtue of the Senior Preferred Default, including taking action to collect all Redemption Payments and all interest accrued
thereon; and (b) except for the right to elect the Control Director, the Holders shall retain and may exercise all other voting rights in respect of their Senior Preferred Stock without
restriction or limitation of any kind, including, without limitation, all voting rights under Section 1.7 of the Amended Certificate of Designation. 

        Section 3.    Representations and Warranties.    

        3.1  In
consideration of the agreement of the Holders to the forbearance herein contained, the Company hereby represents and warrants to the Holders as of the date hereof as
follows: 

        (a)  The
execution, delivery and performance of this Agreement by the Company is within its corporate powers and has been duly authorized by all necessary corporate action on
its part. 

        (b)  This
Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 

        3.2  Each
Holder hereby represents and warrants to the Company as of the date hereof that it owns the number of shares of the Senior Preferred Stock set forth on the
signature pages to this Agreement for such Holder. 

        Section 4.    Covenants.    

        In
consideration of the agreement of the Holders to the forbearance herein contained, the Company hereby covenants and agrees with the Holders that, until the Termination Date and at all
times thereafter that the Holders own Senior Preferred Stock and there is no Control Director: 

        4.1  The
Holders shall have the right, voting separately as a single class with each share of Senior Preferred Stock entitled to one vote, to designate an individual (the
"Observer") who shall be entitled to observe all regular and special meetings of the boards of directors of the Company and its subsidiaries and of all committees thereof, whether in person or via
electronic means, and to receive the same prior notice of such meetings as is provided to the members of such boards of directors and committees; provided, however, that the Observer (a) shall
have no voting rights and (b) shall execute and deliver to the Company a confidentiality agreement in form and substance reasonably satisfactory to the Company. The Company shall provide to the
Observer any and all information and documents and other materials that are provided to the members of any such board of directors or committee as and when the same are provided to any such member. 

        4.2  The
Company shall, upon reasonable prior written notice from the Holders and the execution and delivery of appropriate confidentiality agreements, make its and its
subsidiaries' officers and other management personnel available for meeting with the Holders to discuss the affairs, finances, financial condition and business operations of the Company and its
subsidiaries. 

3

 

        4.3  Subject
to the execution and delivery of appropriate confidentiality agreements, the Company shall cooperate fully, and cause its and its subsidiaries' officers and
other management personnel to cooperate fully, in furnishing information as and when reasonably requested by or on behalf of the Holders regarding the affairs, finances, financial condition and
business operations of the Company and its subsidiaries. 

        4.4  The
Company shall promptly notify the Holders if and when a Forbearance Default occurs. 

        Section 5.    Miscellaneous.    

        5.1    Headings.    Section headings in this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose. 

        5.2    GOVERNING LAW.    THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES. 

        5.3    Counterparts.    This Agreement 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. 

        5.4    Continued Effectiveness.    The terms of the Amended Certificate of Designation remain unchanged, and all such
terms shall remain in full force and effect and are hereby confirmed and ratified. 

        5.5    Transfer of Senior Preferred Stock.    Except as expressly provided herein, this Agreement shall not in any way
restrict the right or ability of any Holder to sell, assign, transfer or otherwise dispose of any Senior Preferred Stock; provided, however, that any such transfer prior to the Termination Date shall
not be effective unless and until the transferee delivers to the transferor and the Company a written agreement, in form and substance reasonably satisfactory to the Company, pursuant to which such
transferee assumes the obligations of the transferor hereunder in respect of the Senior Preferred Stock transferred. 

        5.6    Parties.    This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their
successors and permitted assigns. No rights or obligations of any party under this Agreement may be assigned or transferred to any other person or entity, except as provided in Section 5.5
hereof. Nothing in this Agreement, express or implied, shall give to any person or entity, other than the parties hereto, any benefit or any legal or equitable right, remedy or claim under this
Agreement. 

        5.7    Notices.    All notices hereunder shall be deemed given if in writing and delivered or sent by telecopy,
courier or by registered or certified mail (return receipt requested) to the addresses or telecopier numbers indicated on the signature pages hereto (or at such other addresses or telecopier numbers
as shall be specified by like notice). Any notice given by delivery, mail or courier shall be effective when received. Any notice given by telecopier shall be effective upon oral or machine
confirmation of transmission. 

        5.8    Amendment.    This Agreement may not be amended except by written agreement of the Company and Holders owning
of record a majority of the outstanding Senior Preferred Stock. 

[signature
pages follow] 

4

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Senior Preferred Forbearance Agreement to be executed as of the date first set forth above by their respective duly authorized
officers. 

	COMPANY:	 	FANNIE MAY HOLDINGS, INC.
	
Address:

1137 W. Jackson Boulevard

Chicago, IL 60607

Attention: President

Telephone: 312-432-3409

Facsimile: 312-243-3992	
 	

By:	
 	

/s/ TED A. SHEPHERD
 Ted A. Shepherd

President and Chief Operating Officer
	

HOLDERS:	
 	

 	
 	

 
	

78.1639 Shares of Senior Preferred Stock	
 	

JOHN D. THORNE TRUST UNDER PARAGRAPH 1 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ JOHN D. THORNE
 John D. Thorne, Trustee
	

78.1639 Shares of Senior Preferred Stock	
 	

MARTHA THORNE MORROW TRUST UNDER PARAGRAPH 1 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ MARTHA THORNE MORROW
 Martha Thorne Morrow, Trustee
	

78.1639 Shares of Senior Preferred Stock	
 	

SUSAN THORNE KRILEY TRUST
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ SUSAN THORNE KRILEY
 Susan Thorne Kriley, Trustee
	

78.1639 Shares of Senior Preferred Stock	
 	

KATHERINE THORNE TRUST UNDER PARAGRAPH 1 OF ARTICLE IV OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ SUSAN THORNE KRILEY

	 	 	By:	 	/s/ MARTHA THORNE MORROW
 Susan Thorne Kriley and Martha Thorne Morrow, Co-Trustees

5

 

	

232.8001 Shares of Senior Preferred Stock	
 	

JOHN D. THORNE TRUST UNDER PARAGRAPH 2 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ JOHN D. THORNE
 John D. Thorne, Trustee
	

232.8001 Shares of Senior Preferred Stock	
 	

MARTHA THORNE MORROW TRUST UNDER PARAGRAPH 2 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ MARTHA THORNE MORROW
 Martha Thorne Morrow, Trustee
	

232.8001 Shares of Senior Preferred Stock	
 	

SUSAN THORNE KRILEY TRUST UNDER PARAGRAPH 2 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ SUSAN THORNE KRILEY
 Susan Thorne Kriley, Trustee
	

232.8001 Shares of Senior Preferred Stock	
 	

KATHERINE THORNE TRUST UNDER PARAGRAPH 2 OF ARTICLE III OF THE JEAN D. THORNE TRUST DATED DECEMBER 2, 1985
	
Address:

c/o John D. Thorne

124 South Cliffwood Avenue

Los Angeles, California 90049	
 	

By:	
 	

/s/ SUSAN THORNE KRILEY

	 	 	By:	 	/s/ MARTHA THORNE MORROW
 Susan Thorne Kriley and Martha Thorne Morrow, Co-Trustees

6

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EXHIBIT 10.1

SENIOR PREFERRED FORBEARANCE AGREEMENTQuickLinks
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EXHIBIT 10.2    
  

 
  FORBEARANCE AGREEMENT    
  

        This FORBEARANCE AGREEMENT (this "Agreement") is entered into as of February 28, 2002, by and among Archibald Candy Corporation, an Illinois corporation
(the "Company"), and each of the entities identified on the signature pages hereto as "Noteholders" (collectively, the "Consenting Holders"). 

RECITALS:  

        A.    The
Consenting Holders hold certain 101/4% Senior Notes due 2004 (the "Notes"), which were issued pursuant to that certain Indenture dated as of
July 2, 1997 (as amended, supplemented or otherwise modified from time to time, the "Indenture") by and between the Company and The Bank of New York, as trustee (the "Trustee"). 

        B.    The
Company has failed to make the interest payment on the Notes that was due on January 2, 2002 (the "Existing Default"). 

        C.    The
Consenting Holders are willing to forbear from enforcing their respective rights that arise because of the Existing Default for a limited period of time, subject to
the terms and conditions of this Agreement. 

        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.    

        1.1  All
capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Indenture. 

        1.2  The
following terms used in this Agreement shall have the meanings set forth below: 

        "Advisers"
means any attorneys, auditors, consultants, appraisers, investment bankers or other professionals designated by the Consenting Holders. 

        "Credit
Agreement" means that certain Financing Agreement dated as of June 28, 2001 by and among the Company, Sweet Factory, Inc., a Delaware corporation, The CIT
Group/Business Credit, Inc., as agent, and the lenders thereunder, as amended, restated, supplemented or otherwise modified from time to time. 

        "Forbearance
Default" means any of the following: (a) the occurrence after the date hereof of any Indenture Default, other than the Existing Default or any Indenture Default that
is the subject of a valid and binding forbearance agreement to which the Consenting Holders are parties; (b) the termination of that certain Forbearance Agreement dated as of
December 31, 2001 (as amended by Amendment No. 1 thereto dated as of January    , 2002 and Amendment No. 2 thereto dated as of February    , 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); (c) the
termination of that certain Senior Preferred Forbearance Agreement dated as of February 27, 2002 among the Company, Holdings and the holders of the Senior Preferred Stock 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); (d) the failure of the Company to comply at any time in any material respect with any of its obligations under this Agreement; (e) any warranty or
representation made by the Company under or in connection with this Agreement shall prove to be false in any respect as of the date when made; (f) any election by the holders of the Senior
Preferred Stock of a director having 51% of the total voting power of Holdings' Board of Directors; (g) any payment or distribution by the Company to the holders of 

 

the Senior Preferred Stock, the Class A Preferred Stock or the Class B Preferred Stock or any other capital stock or equity interests of Holdings or to Holdings for payment to the
holders of the Senior Preferred Stock, the Class A Preferred Stock or the Class B Preferred Stock or any other capital stock or equity interests of Holdings; or (h) the
declaration that the unpaid principal and interest under the Notes is immediately due and payable pursuant to Section 6.2 of the Indenture or any other acceleration of the indebtedness of the
Company under the Indenture and/or any of the Notes (in any case, other than if the result of a breach by the Consenting Holders of their obligations under Section 2.1 hereof). 

        "Holdings"
means Fannie May Holdings, Inc., a Delaware corporation. 

        "Indenture
Default" means any Event of Default under the Indenture. 

        "Termination
Event" means the earliest to occur of (a) April 30, 2002 (or such later date as may be mutually agreed in writing by the Company and the Consenting Holders),
(b) an Indenture Event of Default under clause (9) or (10) of Section 6.1 of the Indenture and (c) the Consenting Holders owning a majority of the aggregate
principal amount of the Notes held by all Consenting Holders provide written notice to the Company of their election to terminate this Agreement after the occurrence of a Forbearance Default. 

        Section 2.    Agreement to Forbear.    

        2.1  The
Consenting Holders shall refrain through the Termination Event from taking any action to accelerate the Notes or exercising (including, by giving all necessary
instructions permitted in accordance with the Indenture to the Trustee) any of their rights and remedies under the Indenture, the Notes, the Security Documents or applicable law that may exist by
virtue of the Existing Default. 

        2.2  Nothing
in this Agreement shall be construed as a waiver of or acquiescence to the Existing Default, which shall continue in existence subject only to the agreement of
the Consenting Holders, as set forth herein, not to enforce their rights or remedies or to direct the Trustee to enforce their rights or remedies until the Termination Event. 

        2.3  Except
as expressly provided herein, the execution and delivery of this Agreement shall not: (a) constitute an extension, modification or waiver of any aspect of
the Indenture, the Notes or any Security Document; (b) extend the terms of the Indenture, the Notes or any Security Document or the due date of any of the principal or interest payments due on
the Notes; (c) give rise to any obligation on the part of the Consenting Holders to extend, modify or waive any term or condition of the Indenture, the Notes or any Security Document; or
(d) give rise to any defenses or counterclaims to the right of the Consenting Holders to compel payment of the principal or interest payments due on the Notes or to otherwise enforce their
rights or remedies under the Indenture, the Notes or any Security Document. 

        2.4  Except
as expressly set forth herein, the Consenting Holders hereby expressly reserve all of their rights and remedies under the Indenture, the Notes and the Security
Documents and under applicable law with respect to the Existing Default. From and after the Termination Event, the Consenting Holders shall be entitled to enforce the Indenture, the Notes and the
Security Documents in accordance with their terms and applicable law. 

        Section 3.    Representations and Warranties.    

        3.1  In
consideration of the agreement of the Consenting Holders to the forbearance herein contained, 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 Agreement by the Company is within its corporate powers and has been duly authorized by all necessary corporate action on
its part, and 

2

 

this Agreement 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 Agreement, 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. 

        Section 4.    Covenants.    

        In
consideration of the agreement of the Consenting Holders to the forbearance herein contained, the Company hereby covenants and agrees with the Consenting Holders as follows: 

        4.1  Upon
reasonable prior written notice from, and the execution and delivery of reasonable and appropriate confidentiality agreements by, the Consenting Holders or their
Advisers, as applicable, the Company shall make its and its subsidiaries' officers and other management personnel available for meeting with the Consenting Holders or their Advisers, as applicable, to
discuss the affairs, finances, financial condition and business operations of the Company and its subsidiaries. 

        4.2  Subject
to the execution and delivery of appropriate confidentiality agreements by the Consenting Holders or their Advisers, as applicable, the Company shall cooperate
fully, and cause its and its subsidiaries' officers and other management personnel to cooperate fully, in furnishing information as and when reasonably requested by the Consenting Holders or their
Advisers regarding the affairs, finances, financial condition and business operations of the Company and its subsidiaries. 

        4.3  The
Company shall continue to perform and observe all terms and conditions contained in the Indenture, the Notes and the Security Documents that are not specifically
subject to the forbearance provided in this Agreement. 

        4.4  The
Company shall promptly notify the Consenting Holders if and when a Forbearance Default occurs. 

        Section 5.    Miscellaneous.    

        5.1    Headings.    Section heading in this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose. 

        5.2    GOVERNING LAW.    THIS AGREEMENT 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. 

        5.3    Counterparts.    This Agreement 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. 

        5.4    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. 

        5.5    No Novation.    This Agreement shall not be deemed or construed to be a satisfaction, reinstatement, novation
or release of the Indenture, the Notes or any Security Document or a waiver 

3

 

by any Consenting Holder of any of its rights and remedies under the Indenture, the Notes or any Security Document. 

        5.6    Transfer of Notes.    Except as expressly provided herein, this Agreement shall not in any way restrict the
right or ability of any Consenting Holder to sell, assign, transfer or otherwise dispose of any Notes; provided, however, that any such transfer prior
to the Termination Event shall not be effective unless and until the transferee delivers to the transferor and the Company a written agreement, in form and substance reasonably satisfactory to the
Company, pursuant to which such transferee assumes the obligations of the transferor hereunder in respect of the Notes transferred. The Company shall not transfer or assign any of its rights or
obligations hereunder. 

        5.7    Parties.    This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their
successors and permitted assigns. No rights or obligations of any party under this Agreement may be assigned or transferred to any other Person, except as provided in Section 5.6 hereof.
Nothing in this Agreement, 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 Agreement. 

        5.8    Notices.    All notices hereunder shall be deemed given if in writing and delivered or sent by telecopy,
courier or by registered or certified mail (return receipt requested) to the addresses or telecopier numbers indicated on the signature pages hereto (or at such other addresses or telecopier numbers
as shall be specified by like notice). Any notice given by delivery, mail or courier shall be effective when received. Any notice given by telecopier shall be effective upon oral or machine
confirmation of transmission. 

        5.9    Amendment.    This Agreement may not be amended except by written agreement of the Company and all of the
Consenting Holders. 

[signature
pages follow] 

4

 

        IN
WITNESS WHEREOF, the parties hereto have caused this 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

	1137 W. Jackson Boulevard

Chicago, IL 60607

Attention: President

Telephone: 312-432-3409

Facsimile: 312-243-3992	 	 	Name:

Title:	Ted. A. Shepherd

President and Chief Operating Officer

5

 

	NOTEHOLDERS:	 	 	 	 
	

 	
 	

MASSACHUSETTS MUTUAL LIFE

INSURANCE COMPANY
	
Address:	
 	

By:	

/s/ STEVEN J. KATZ

	MASS MUTUAL

C/O D.L. BABSON & Co.

1500 Main Street

Suite 2800

Springfield, MA 01115

Attn: Steven J. Katz

Telephone: 413-226-1059

Fax: 413-226-2059	 	 	Name:

Title:	Steven J. Katz

Second Vice President and

Associate General Counsel
	 	 	MASSMUTUAL/DARBY CBO LLC
	 	 	By:	MassMutual/Darby CBO IM, Inc. as

LLC Manager
	
Address:	
 	

By:	

/s/ CHARLES MCCOBB

	Same as above	 	 	Name:	Charles McCobb
	 	 	 	Title:	Managing Director
	

 	
 	
MASSMUTUAL HIGH YIELD

PARTNERS II, LLC
	 	 	By:	HYP Management, Inc.

As Managing Member
	
Address:	
 	

By:	

/s/ CHARLES MCCOBB

	Same as above	 	 	Name:	Charles McCobb
	 	 	 	Title:	Managing Director

6

 

	 	 	SAAR HOLDINGS CDO LIMITED
	 	 	By:	Mass Mutual Life Insurance Co.,

As Collateral Manager
	
Address:	
 	

By:	

/s/ STEVEN J. KATZ

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	Title:	Second Vice President and

Associate General Counsel
	

 	
 	
PERSEUS CDO I, LIMITED
	 	 	By:	Mass Mutual Life Insurance Co. as

Portfolio Manager
	
Address:	
 	

By:	

/s/ STEVEN J. KATZ

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	Title:	Second Vice President and

Associate General Counsel
	

 	
 	
SOMERS CDO, LIMITED
	 	 	By:	Mass Mutual Life Insurance Co. as

Collateral Manager
	
Address:	
 	

By:	

/s/ STEVEN J. KATZ

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	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

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	Title:	Second Vice President and

Associate General Counsel

7

 

	 	 	SIMSBURY CLO, LIMITED
	 	 	By:	Mass Mutual Life Insurance Co.

As Collateral Manager
	
Address:	
 	

By:	

/s/ STEVEN J. KATZ

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	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

	Same as above	 	 	Name:	Steven J. Katz
	 	 	 	Title:	Second Vice President and

Associate General Counsel

8

 

	 	 	BARCLAYS BANK PLC
	
Address:	
 	

By:	

/s/ STEVEN LANDZBERG

	Barclays Capital

222 Broadway Avenue, 10th Floor

New York, New York 10038	 	 	Name:

Title:	Steven Landzberg

Director

9

 

	 	 	DELAWARE STREET CAPITAL, L.L.C.
	
Address:	
 	

By:	

/s/ ANDREW G. BLUHM

	900 N. Michigan Avenue

Chicago, IL 60611

Phone: (312) 915-2842

Fax: (312) 915-3053	 	 	Name:

Title:	Andrew G. Bluhm

Managing Partner

10

 

	 	 	CREDIT SUISSE ASSET

MANAGEMENT, LLC
	
Address:	
 	

By:	

/s/ PHILIP L. SCHANTZ

	15th Floor

466 Lexington Avenue

New York, NY 10017-3140	 	 	Name:

Title:	Philip L. Schantz

Director

11

 

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

RJR 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 SUISSE HIGH YIELD BOND FUND

DIOCESE OF BUFFALO

DIOCESE OF BUFFALO

WESTMORELAND COUNTY

CS GLOBAL FIXED INCOME FUND 

12

 

	 	 	CSAM HY FOCUS
	
Address:	
 	

By:	

/s/ ANDREW H. MARSHAK

	466 Lexington Avenue, 14th Floor

New York, NY 10017	 	 	Name:

Title:	Andrew H. Marshak

Authorized Signatory
	

 	
 	
BEACBO-1
	
Address:	
 	

By:	

/s/ ANDREW H. MARSHAK

	Same as above	 	 	Name:	Andrew H. Marshak
	 	 	 	Title:	Authorized Signatory
	

 	
 	
BEACBO-2
	
Address:	
 	

By:	

/s/ ANDREW H. MARSHAK

	Same as above	 	 	Name:	Andrew H. Marshak
	 	 	 	Title:	Authorized Signatory

13

 

	 	 	DEBT STRATEGIES FUND, INC.
	

 	
 	

By:	

/s/ KEVIN BOOTH

	 	 	 	Name:	Kevin Booth
	 	 	 	Title:	Authorized Signatory
	

 	
 	
MASTER U.S. HIGH YIELD TRUST
	

 	
 	

By:	

/s/ VINCENT LATHBURY

	 	 	 	Name:	Vincent Lathbury
	 	 	 	Title:	Authorized Signatory
	

 	
 	
MERRILL LYNCH VARIABLE SERIES

    FUND, INC.—MERRILL LYNCH

    HIGH CURRENT INCOME FUND
	

 	
 	

By:	

/s/ VINCENT LATHBURY

	 	 	 	Name:	Vincent Lathbury
	 	 	 	Title:	Authorized Signatory
	

 	
 	
MERRILL LYNCH GLOBAL

    CURRENCY BOND SERIES—U.S.

    HIGH YIELD PORTFOLIO
	 	 	By:	Merrill Lynch Investment

Managers, L.P. as Investment Advisor
	

 	
 	

By:	

/s/ VINCENT LATHBURY

	 	 	 	Name:	Vincent Lathbury
	 	 	 	Title:	Authorized Signatory

14

 

	 	 	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 TRUST

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
	 	 	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 IMCOME

    FUND, LLC
	 	 	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
	 	 	By:	The Putnam Advisory Company, LLC
	

 	
 	

By:	

/s/ JOHN R. VERANI

	 	 	 	Name:	John R. Verani
	 	 	 	Title:	Senior Vice President

15

 

	 	 	GREAT POINT CLO 1999-1 LTD.
	

 	
 	

By:	

Sankaty Advisors,

As Collateral Manager
	

 	
 	

By:	

/s/ TIM BARNS

	 	 	 	Name:	Tim Barns
	 	 	 	Title:	 
	

 	
 	
GREAT POINT CBO 1998-1 LTD.
	

 	
 	

By:	

Sankaty Advisors,

As Collateral Manager
	

 	
 	

By:	

/s/ TIM BARNS

	 	 	 	Name:	Tim Barns
	 	 	 	Title:	 
	

 	
 	
BRANT POINT CLO 1999-1, LTD.
	

 	
 	

By:	

Sankaty Advisors,

As Collateral Manager
	

 	
 	

By:	

/s/ TIM BARNS

	 	 	 	Name:	Tim Barns
	 	 	 	Title:	 

16

QuickLinks

EXHIBIT 10.2

FORBEARANCE AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00037-of-00352.parquet"}]]