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EXHIBIT 7
SECOND AMENDMENT TO
INVESTOR RIGHTS AGREEMENT
THIS SECOND AMENDMENT TO THE INVESTOR RIGHTS AGREEMENT (this
"Amendment") is made and entered into as of November 20, 2000, by and among
Party City Corporation, a Delaware corporation (the "Company"), Xxxx Xxxxxxxxx,
and each of the other parties whose names appear on the signature pages hereto
(such other parties, the "Investors").
RECITAL
On August 16, 1999, the Company entered into an Investor Rights
Agreement (the "IR Agreement"), as amended pursuant to the First Amendment to
Investor Rights Agreement, dated as of October 11, 2000, with Xxxxxxxxxx & Co.,
LLC, TCO/Party City, LLC, Xxxxxxx, Xxxxx & Co., Xxxxxxx Sachs Credit Partners,
L.P., Enhanced Retail Funding, LLC, Richmond Associates, L.P. and Xxxx
Xxxxxxxxx. The parties hereto now desire to amend the IR Agreement in the manner
set forth below. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the IR Agreement.
1. AMENDMENT TO ANNEX I. Annex I of the IR Agreement is hereby
amended by deleting it in its entirety and inserting the following in lieu
thereof:
ANNEX I
SCHEDULE OF INVESTORS
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SHARES OF
COMMON STOCK
(SUBJECT TO
INVESTOR WARRANTS) PROMISSORY NOTES
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Special Value Bond Fund, LLC 3,096,000 - 13.0% Secured Note, due January 31,
2002 in the principal amount of
$2,250,000
- 14.0% Secured Note, due January 31,
2004 in the principal amount of
$4,500,000
- 14.0% Senior Secured Note, due
January 31, 2002 in the principal
amount of $3,250,000
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Special Value Bond Fund II, LLC none - 12.5% Secured Note, due January 31,
2003 in the principal amount of
$5,000,000
- 13.0% Secured Note, due January 31,
2003 in the principal amount of
$2,500,000
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Xxxxxxx Sachs & Co. 2,867,000 none
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Xxxxxxx Xxxxx Credit Partners, L.P. none - 12.5% Secured Note, due January 31,
2003 in the principal amount of
$4,333,333
- 13.0% Secured Note, due January 31,
2003 in the principal amount of
$2,166,667
- 13.0% Secured Note, due January 31,
2002 in the principal amount of
$2,085,000
- 14.0% Secured Note, due January 31,
2004 in the principal amount of
$4,165,000
- 14.0% Senior Secured Note, due
January 31, 2002 in the principal
amount of $3,250,000
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Enhanced Retail Funding, LLC 458,667 - 12.5% Secured Note, due January 31,
2003 in the principal amount of
$666,667
- 13.0% Secured Note, due January 31,
2003 in the principal amount of
$333,333
- 13.0% Secured Note, due January 31,
2002 in the principal amount of
$333,333
- 14.0% Secured Note, due January 31,
2004 in the principal amount of
$666,667
- 14.0% Senior Secured Note, due
January 31, 2002 in the principal
amount of $500,000
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Richmond Associates, L.P. 229,000 - 13.0% Secured Note, due January 31,
2002 in the principal amount of
$165,000
- 14.0% Secured Note, due January 31,
2004 in the principal amount of
$335,000
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Xxxxx Street Investment, LLC 229,333 - 13.0% Secured Note, due January 31,
2002 in the principal amount of
$166,667
- 14.0% Secured Note, due January 31,
2004 in the principal amount of
$333,333
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2. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, and signature pages may be delivered by facsimile, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument, and shall become effective upon its execution by the
Company, a Supermajority in Interest of the Investors and a Supermajority in
Interest of the Warrantholders.
3. FULL FORCE AND EFFECT. Except as expressly modified by this
Amendment, all of the terms, covenants, agreements, conditions and other
provisions of the IR Agreement shall remain in full force and effect in
accordance with their respective terms.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.
PARTY CITY CORPORATION
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: CFO
/s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
INVESTORS:
SPECIAL VALUE BOND FUND, LLC
By: SVIM/MSM, LLC,
its Managing Member
By: XXXXXXXXXX & CO., LLC,
its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Member
SPECIAL VALUE BOND FUND II, LLC
By: SVIM/MSMII, LLC,
its Managing Member
By: XXXXXXXXXX & CO., LLC,
its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Member
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SPECIAL VALUE INVESTMENT MANAGEMENT, LLC
By: XXXXXXXXXX & CO., LLC,
its Managing Member
By: /s/ XXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Managing Member
XXXXXXX, SACHS & CO.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Authorized Signatory
XXXXXXX XXXXX CREDIT PARTNERS, L.P.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Authorized Signatory
ENHANCED RETAIL FUNDING, LLC
By: /s/ XXXX X. XXXXXXXXX
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Name: Xxxx X. Xxxxxxxxx
Title: CFO & EVP
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XXXXX XXXXXX INVESTMENT, LLC
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Managing Member
RICHMOND ASSOCIATES, L.P.
By: MHM MANAGEMENT, INC.,
its General Partner
By: /s/ XXXX X. XXXXXXX
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Name: Xxxx X. Xxxxxxx
Title: VP
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