THIRD AMENDMENT AGREEMENT
Exhibit 99.1
THIS THIRD AMENDMENT AGREEMENT, (hereinafter, this “Third Amendment”) is entered into
as of November 6, 2007 by and among Factory Card Outlet of America Ltd., an Illinois corporation
(“Borrower”), the lenders signatory hereto (“Lenders”) and Xxxxx Fargo Retail
Finance, LLC as agent for the Lenders (in such capacity, “Agent”).
RECITALS
WHEREAS, Borrower, Agent and Lenders are parties to a Loan and Security Agreement dated as of
April 9, 2002 (as amended from time to time prior to the date hereof, the “Loan Agreement”)
pursuant to which the Lenders agreed to make certain revolving credit advances and to provide
certain other financial accommodations to Borrower; and
WHEREAS, Amscan Acquisition, Inc., a wholly-owned direct subsidiary of Amscan Holdings, Inc.
(“Amscan”) has initiated a tender offer (the “Tender Offer”) to acquire the
outstanding shares (the “Shares”) of Factory Card & Party Outlet Corp., the parent of
Borrower;
WHEREAS, the completion of the Tender Offer (the “Acquisition”) constitutes a Change
in Control and, consequently, an Event of Default under the Loan Agreement;
WHEREAS, the Borrower has requested that the Lenders agree that the Acquisition does not
result in a Change of Control under the Loan Agreement for a short period of time; and
WHEREAS, the undersigned Lenders constitute the Lenders necessary to agree to this Third
Amendment pursuant to Section 15.1 of the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties signatory hereto agree as follows.
1. Definitions. Capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Loan Agreement.
2. Amendment to the Loan Agreement. Subject to the terms and conditions of this Third
Amendment, including compliance with paragraph 3 below, the Lenders agree that, notwithstanding
anything to the contrary set forth in the Loan Agreement, (a) the Acquisition does not constitute a
Change of Control under the Loan Agreement and (b) the Acquisition in and of itself will not
otherwise constitute a Default or Event of Default under the Loan Agreement. The Lenders further
agree, subject to the terms and conditions of this Third Amendment, to waive compliance by the
Borrower with Section 3.6 of the Loan Agreement with respect to repayment of the Obligations as
provided in Section 3(a) below. The Borrower’s failure to satisfy the covenants set forth in
paragraph 3 below on or before January 2, 2008 shall constitute Events of Default under Sections
8.1 and 8.2 of the Loan Agreement.
3. Payoff Amount. Borrower hereby agrees that, on or before January 2, 2008, it will:
(a) pay to the Agent, in full and in cash, the full amount of (i) the Obligations,
plus (ii) a fee equal to $87,332.04, which fee shall be fully earned as of the date of the
execution of this Third Amendment and which represents a premium payable by the Borrower to the
Agent to compensate the Lenders for lost profits and damages resulting from the Borrower’s failure
to comply with Section 3.6 of the Loan Agreement; and
(b) execute and deliver to the Agent a payoff letter satisfactory to the Agent in its
reasonable discretion, in substantially the form attached hereto as Exhibit A.
4. Conditions Precedent to Third Amendment. The satisfaction of each of the
following, unless waived or deferred by the Agent, in its Permitted Discretion, shall constitute
conditions precedent to the effectiveness of this Third Amendment:
(a) The representations and warranties in the Loan Agreement and the other Loan Documents
shall be true and correct in all material respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate solely to an
earlier date);
(b) No Default or Event of Default (other than any Default or Event of Default that arises
solely by reason of the Acquisition) shall have occurred and be continuing on the date hereof, nor,
after taking into account the terms of this Third Amendment, shall any Default or Event of Default
result from the consummation of the Acquisition; and
(c) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein or by the Loan Documents
shall have been issued and remain in force by any Governmental Authority against the Borrower, the
Agent or any Lender.
5. Choice of Law. The validity of this Third Amendment, its construction,
interpretation and enforcement, and the rights of the parties hereunder, shall be determined under,
governed by, and construed in accordance with the laws of The Commonwealth of Massachusetts.
6. Counterparts; Telefacsimile or Electronic Delivery. This Third Amendment may be
executed in any number of counterparts and by different parties and separate counterparts, each of
which when so executed and delivered, shall be deemed an original, and all of which, when taken
together, shall constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Third Amendment by telefacsimile or electronic mail shall be as effective as
delivery of a manually executed counterpart of this Third Amendment. Any party delivering an
executed counterpart of this Third Amendment by telefacsimile or electronic mail also shall deliver
a manually executed counterpart of this Third Amendment but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and binding effect of this
Third Amendment.
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7. Reaffirmation. Borrower reaffirms all of its obligations under the Loan Agreement
and the other Loan Documents.
8. Effect on Loan Agreement. The Loan Agreement shall be and remain in full force and
effect in accordance with its respective terms and such Loan Agreement, together with each of the
other Loan Documents, hereby is ratified and confirmed in all respects. The execution, delivery,
and performance of this Third Amendment, except as expressly set forth herein, shall not operate as
a waiver of or as an amendment of, any right, power, or remedy of the Agent under the Loan
Agreement.
9. Further Assurances. Borrower shall execute and deliver all agreements, documents,
and instruments, in form and substance satisfactory to Agent, and take all actions as Agent may
reasonably request from time to time, to perfect and maintain the perfection and priority of the
security interest in the Collateral held by Agent and to fully consummate the transactions
contemplated under this Third Amendment and the Loan Agreement.
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IN
WITNESS WHEREOF, the parties have entered into this Third Amendment as of the date first
above written.
BORROWER FACTORY CARD OUTLET OF AMERICA LTD. |
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By: | /s/ Xxxxxxx X. Xxxxxx | |||
Xxxxxxx X. Xxxxxx, | ||||
Vice President, Treasurer and Chief Financial Officer |
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AGENT AND LENDER: XXXXX FARGO RETAIL FINANCE II, LLC, as Agent and Lender |
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By: | /s/ Xxxxxx X. Xxxxxxxxx | |||
Xxxxxx X. Xxxxxxxxx, | ||||
Vice President | ||||