VENDOR FORBEARANCE AND STANDSTILL AGREEMENT
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This Vendor Forbearance and Standstill Agreement (this "Agreement") is
entered into as of this 16th day of August 1999, by and among, Party City
Corporation (the "Company") and each vendor that has executed a signature page
hereto that has been accepted by the Company in accordance with the terms set
forth in Section 12(c) below (each, a "Vendor," and collectively, the
"Vendors").
RECITALS
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A. Prior to the Effective Date (as defined in Section 1(a) below), the
Company purchased merchandise (the "Merchandise") from the Vendors on credit.
B. The Company has failed to remit timely payment to the Vendors for
Merchandise shipped to the Company (the "Existing Defaults").
C. The Company desires to obtain the agreement of each of the Vendors
to forbear from taking collection actions or other enforcement remedies by
reason of the Existing Defaults, and each of the Vendors is willing to agree to
forbear, on the terms and conditions set forth in this Agreement.
AGREEMENT
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NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the Vendors,
intending to be bound, agree as follows:
1. Definitions.
a. The following terms used in this Agreement shall have the
following meanings:
"Additional Amount" shall have the meaning given to it in Section 3(b)
below.
"Agreement" shall mean this Forbearance and Standstill Agreement, as it
may be amended, supplemented or otherwise modified from time to time.
"Bank Debt" shall mean all outstanding indebtedness owed by the Company
to the Bank Group.
"Bank Forbearance Agreement" shall have the meaning given to it in
Section 4(a) below.
"Bank Group" shall mean the collective reference to PNC Bank National
Association, Fleet Bank, The Chase Manhattan Bank, National City Bank of
Pennsylvania and LaSalle Bank.
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"Capital Infusion" shall mean (a) any indebtedness on account of
borrowed money incurred by the Company other than the Bank Debt and trade credit
(including trade credit that is owed to the Seasonal Vendors), (b) any purchase
of equity in the Company and/or (c) any other infusion of capital in the Company
in an amount greater than $1,000,000, in each case obtained on or after August
1, 1999.
"Company" shall have the meaning assigned to that term in the
introduction to this Agreement.
"Company Termination Event" shall have the meaning given to it in
Section 11 below.
"Enforcement Action" shall mean any right or remedy available to any of
the Vendors on the Effective Date under contract or applicable law (including,
without limitation, (i) suing to recover on its Vendor Claim, (ii) seeking to
recover on its Vendor Claim by way of setoff or recoupment and (iii) initiating,
joining or supporting any proceeding against the Company (A) seeking to
adjudicate it a bankrupt or insolvent, or (B) seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or (C) seeking the entry of an order for relief or the
appointment of a receiver, trustee, or similar official for it or for any
substantial part of its property) on account of or relating to its Vendor Claim
solely by reason of the existence and continuation of the Existing Defaults.
"Effective Date" shall have the meaning given to it in Section 6 below.
"Event of Default" shall have the meaning given to in Section 10 below.
"Existing Defaults" shall have the meaning given to it in Recital B
above.
"Existing Trade Debt" shall mean the outstanding indebtedness as of the
Effective Date that the Vendors claim is owed to them by the Company for the
delivery of Merchandise.
"Interest Payment" shall have the meaning given to it in Section 3(a)
below.
"Interest Payment Date" shall have the meaning given to it in Section
3(a) below.
"Merchandise" shall have the meaning given to it in Recital A above.
"Principal Payment Date" shall have the meaning given to it
in Section 3(a) below.
"Seasonal Vendor Security Agreement" shall mean that certain Vendor
Security Agreement, dated as of the date hereof, by and between the Company,
each of the Seasonal Vendors and the Vendor Trustee (as identified therein), as
the same may be amended, supplemented or otherwise modified from time to time.
"Seasonal Vendor" shall mean any Vendor that is a party to the Seasonal
Vendor Security Agreement.
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"Standstill Period" shall mean the period from the Effective Date to
the Termination Date.
"Termination Date" shall mean the earliest to occur of (a) January 15,
2000, (b) an Event of Default and (c) a Company Termination Event.
"Trade Note" shall mean a promissory note, dated as of the Effective
Date, by the Company in favor of a Vendor in an amount equal to thirty three
percent (33%) of its Vendor Claim.
"Vendors" shall have the meaning assigned to that term in the
introduction to this Agreement.
"Vendor Claim" shall mean, for each of the Vendors, the amount of
Existing Trade Debt asserted by such Vendor as reflected on the signature page
of such Vendor.
"Vendor Group" means the informal group of Vendors listed on Exhibit B
hereto.
b. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1(a) may, unless
the context otherwise requires, be used in the singular or the plural,
depending on the reference.
2. Vendors' Agreement to Forbear, etc.
a. From and after the Effective Date, and subject to the
terms and conditions contained herein, each of the Vendors shall
forbear from taking any Enforcement Action until the Termination Date.
Upon the Termination Date, each Vendor's agreement to forbear from
taking any Enforcement Action shall automatically expire and be of no
further force or effect.
b. Nothing contained in this Agreement shall be construed to be a
waiver of the Existing Defaults. The Existing Defaults shall continue in
existence subject only to each Vendor's written agreement, as set forth in
this Agreement, not to take Enforcement Actions prior to the Termination
Date.
c. Nothing in this Agreement shall prejudice or limit any of the
rights and remedies of any of the Vendors to take any Enforcement Action
from and after the Termination Date.
d. Each of the Vendors expressly reserves all of its rights and
remedies under applicable law, except as expressly limited herein. Except as
expressly set forth herein, from and after the Termination Date, each of the
Vendors shall be entitled to take any Enforcement Action and pursue all
rights and remedies available to it under any agreements, arrangements or
understandings, including, without limitation, the Vendor Notes, if
applicable, by reason of the occurrence of any defaults, including the
Existing Defaults.
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e. Except as expressly set forth herein, nothing contained herein
shall affect any Seasonal Vendor's rights arising (i) under the Seasonal
Vendor Security Agreement, or (ii) with respect to any extension of credit
made after the Effective Date.
f. Except as otherwise agreed between the Company and any Vendor,
no Vendor shall have any obligation to sell the Company Merchandise after
the Effective Date. To the extent that any Vendor agrees to sell the Company
Merchandise after the Effective Date, such Vendor agrees that (i) it will
apply any payment received from the Company prior to the Termination Date on
account of such purchase only to such purchase and that it will not seek to
setoff or recoup such payment against, or otherwise apply such payment to,
its Vendor Claim and (ii) it will use commercially reasonable efforts to
complete shipping of any Merchandise purchased by the Company within (5)
business days after such Vendor's receipt of appropriate notice and (A) a
payment equal to seventy percent (70%) of the purchase price for such
Merchandise if it is purchased in connection with the Seasonal Vendor
Security Agreement or (B) the payment previously agreed to by the Company
and such Vendor for other Merchandise, provided that in either case such
payment shall be in good funds.
3. Company's Agreements.
a. Within five (5) business days after the Effective Date, the
Company shall deliver to each Vendor a Trade Note. Subject to Section 3(d)
below, each Trade Note shall bear interest at the rate of 10% per annum,
from and after May 1, 1999 until the Principal Payment Date (as defined
below), and, from and after an Event of Default hereunder, shall bear
interest at the rate of 14% per annum until paid in full. The principal
amount of each Trade Note shall be payable in cash on or before November 15,
1999 (the "Principal Payment Date") and interest on each Trade Note (the
"Interest Payment") shall be payable in cash on the earlier to occur (the
"Interest Payment Date") of (i) January 15, 2000 or (ii) the date on which
any refinancing of the entire amount of the Bank Debt is consummated. Each
Trade Note shall be substantially in the form of Exhibit A hereto.
b. In addition to the amounts payable on account of each Trade
Note as set forth in Section 3(a) above and subject to Section 3(d) below,
on or before the Principal Payment Date, but only if there is no Event of
Default under those certain Securities Purchase Agreements, dated as of the
date hereof, by and among the Company and the purchasers named therein, the
Company shall also pay to each Vendor in cash an amount (the "Additional
Amount") based on the formula of: the amount of its Vendor Claim multiplied
by .67 and further multiplied by a fraction, the numerator of which is equal
to the number of stores of the Company that are sold or closed between June
1, 1999 and the Principal Payment Date and the denominator of which is 216.
Any payment under this Section 3(b) shall be applied first to the principal
balance of any Vendor Claim.
c. All payments provided for in this Section 3 shall be made on a
pro rata basis among the Vendors.
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d. Notwithstanding the foregoing and provided that an Event of
Default has not occurred, the Company shall not be obligated to make any
Interest Payment or pay any Additional Amount to any Vendor that has
breached any of its obligations hereunder, provided that such breach remains
uncured for a period of five (5) days after the Company provides such Vendor
with written notice of such breach. Notwithstanding the foregoing sentence,
a breach by any Vendor of its obligations hereunder shall not affect the
Interest Payment or Additional Amount payable to any other Vendor hereunder.
4. Conditions Precedent to Each Vendor's Obligations. The Effective
Date shall not occur and this Agreement shall not become effective until
satisfaction or express waiver of the following conditions:
a. The Company and the Bank Group shall have entered into a
forbearance and standstill agreement (the "Bank Forbearance Agreement") in
form and substance acceptable to each of the Vendors (with such acceptance
deemed to be given by delivery of its executed counterpart of this
Agreement).
b. The Company shall have obtained and closed (or shall close
simultaneously with this Agreement) a Capital Infusion in an amount not less
than $30,000,000 on terms and conditions satisfactory to the Vendor Group.
c. After giving effect to the transactions contemplated by this
Agreement, no Event of Default shall exist under this Agreement.
d. The Company shall have accepted the signature page of each
Vendor that is a member of the Vendor Group as set forth in Section 12(c).
5. Conditions Precedent to the Company's Obligations. The
Effective Date shall not occur and this Agreement shall not become effective
until satisfaction or express waiver of the following conditions:
a. Each of the Vendors that is a member of the Vendor Group shall
have executed and delivered an original counterpart of this Agreement to the
Company.
b. The Company and the Bank Group shall have entered into the Bank
Forbearance Agreement in form and substance satisfactory to the Company.
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6. The Effective Date. This Agreement shall become effective
on the date (the "Effective Date") on which all of the conditions set forth in
Sections 4 and 5 have been satisfied or waived by the party(ies) for whose
benefit they are intended; provided that, if the Effective Date does not occur
on or prior to August 20, 1999 (as such date may be extended by the mutual
agreement of the parties hereto), this Agreement shall be deemed null and void
and neither the Company nor any of the Vendors shall be deemed to be obligated
hereunder.
7. Representations and Warranties of the Company. As a
material inducement to the Vendors to enter into the transactions contemplated
hereby, the Company represents and warrants to each of the Vendors as follows:
a. This Agreement has been duly authorized, executed and delivered
by the Company, is a legally valid and binding agreement and is enforceable
against the Company in accordance with its terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally.
b. The execution, delivery and performance by the Company of this
Agreement do not and will not (i) violate any provisions of any law or any
governmental rule or regulation applicable to the Company, the Company's
governing documents or any order, judgment or decree of any court or other
agency of government binding on the Company, (ii) conflict with, result in a
material breach of or constitute (with due notice or lapse of time or both)
a default under any material agreement or contract of the Company, or (iii)
result in or require the creation or imposition of any lien upon any of the
properties or assets of the Company except as expressly contemplated hereby.
8. Representations and Warranties of the Vendors. As a material
inducement to the Company to enter into the transactions contemplated hereby,
each of the Vendors severally represents and warrants to the Company as follows:
a. This Agreement has been duly authorized, executed and delivered
by such Vendor, is a legally valid and binding agreement and is enforceable
against such Vendor in accordance with its terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally.
b. The execution, delivery and performance by such Vendor of this
Agreement do not and will not (i) violate any provisions of any law or any
governmental rule or regulation applicable to such Vendor, such Vendor's
governing documents or any order, judgment or decree of any court or other
agency of government binding on such Vendor, or (ii) conflict with, result
in a material breach of or constitute (with due notice or lapse of time or
both) a default under any material agreement or contract of such Vendor.
c. The amount of its Vendor Claim as set forth on its signature
page is true and correct according to its books and records.
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9. Covenants of the Company. The Company covenants and agrees as
follows:
a. The Company shall not make any unscheduled principal payment,
redeem any equity or declare and distribute any cash dividend on account of
or in connection with any Capital Infusion prior to the Termination Date.
b. The Company shall simultaneously provide Xxxxxx & Xxxxxxx and
Ernst & Young, the Vendor Group's advisors, with any and all written
information that it provides to the Bank Group, including, without
limitation, periodic reports on efforts to obtain a Capital Infusion.
c. The Company shall provide Ernst & Young with access on a
reasonable, confidential basis to information that the Company makes
available to any prospective sources of a Capital Infusion.
d. The Company shall pay the indebtedness evidenced by the Trade
Notes and perform each and all of the conditions and covenants required to
be performed by the Company thereunder.
e. The Company shall provide notice to each Vendor of the
occurrence of an Event of Default as to any Vendor or Vendors promptly after
becoming aware thereof.
10. Events of Default. Any Vendor has the right to terminate this
agreement as it applies to such Vendor upon the occurrence of any of the
following events (each an "Event of Default"); provided, however, that only a
Vendor party to the Seasonal Vendor Security Agreement may rely on Section
10(e):
a. The Company shall breach any of its obligations under Section 3
of this Agreement including, without limitation, failing to pay any amounts
under the Trade Notes on the dates when such amounts are due;
b. Any of the Company's representations and warranties in Section
7 of this Agreement shall prove to have been materially incorrect when made
and shall remain incorrect for a period of five (5) days after written
notice thereof shall have been given to the Company by any Vendor;
c. The Company shall fail to perform or observe any covenant
contained in Section 9(a) of this Agreement;
d. The Company (i) shall fail to perform or observe any covenant
contained in Section 9(d) or (e) of this Agreement and such failure shall
continue for a period of five (5) days after written notice thereof shall
have been given to the Company by any Vendor or (ii) shall fail to perform
or observe any covenant contained in Section 9(b) or (c) of this Agreement
and such failure shall continue for a period of fifteen (15) days after
written notice thereof shall have been given to the Company by any Vendor;
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e. The Company shall fail to perform or observe any term,
condition, covenant or agreement contained in the Seasonal Vendor Security
Agreement and such failure shall continue after the applicable grace period,
if any, specified therein;
f. An Event of Default (as such term is defined in the Bank
Forbearance Agreement) shall have occurred and be continuing under the Bank
Forbearance Agreement;
g. The Company shall fail to perform or observe any term,
condition, covenant or agreement contained in any document governing,
relating to or arising from the Capital Infusion and such failure shall
continue after the applicable grace period, if any, specified therein,
unless such failure is expressly waived by the party or parties providing
such Capital Infusion (to the extent such waiver is permitted under such
document);
h. From and after the Effective Date, any proceeding shall be
instituted by or against the Company seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently contested by
it in good faith, either such proceeding shall remain undismissed or
unstayed for a period of sixty (60) days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or any substantial part of its property)
shall occur, or the Company shall take any corporate action to authorize any
of the actions set forth in this Section 10(h).
Upon the occurrence of an Event of Default under Section 10(a) or (h)
above, the Trade Notes shall immediately become due and payable and the Vendor
shall no longer be deemed to have any obligation under Section 2(a) of this
Agreement. Upon the occurrence of an Event of Default under Section 10(b), (c),
(d), (e), (f) or (g), the Trade Note of any Vendor shall become immediately due
and payable upon such Vendor's delivery of notice of such Event of Default to
the Company pursuant to Section 12(i) hereof. Moreover, from and after an Event
of Default as to any Vendor, the principal amount due under such Vendor's Trade
Note shall accrue interest at the default interest rate set forth therein until
the Notes are paid in full.
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11. Company Termination Event. The Company shall have the right to
terminate this Agreement (a "Company Termination Event") if (i) prior to August
31, 1999 this Agreement has not been executed and delivered to the Company by
Vendors holding in the aggregate at least $38,000,000 of Existing Trade Debt,
and representing at least 90% of anticipated purchases to be made pursuant to or
in connection with the Seasonal Vendor Security Agreement and (ii) the Company
provides written notice to all Vendors who have executed this Agreement as of
such date no later than August 31, 1999 that it is nullifying this Agreement
pursuant to this Section 11. If the Company does not provide such notice on or
prior to August 31, 1999, no Company Termination Event shall be deemed to have
occurred and this Agreement shall continue to be the binding obligation of each
of the parties hereto. From and after a Company Termination Date, this Agreement
and the Trade Notes shall be deemed to be null and void, and none of the parties
hereto shall be deemed to have any obligation hereunder or thereunder. In
furtherance of the foregoing and not in limitation thereof, from and after the
occurrence of a Company Termination Event, none of the Vendors shall be deemed
to have any obligation under Section 2 hereof and the Company shall not be
deemed to have any obligation under Section 3 hereof. Notwithstanding the
foregoing, however, a Company Termination Event shall not be deemed to relieve
the Company from any of its obligations under the Seasonal Vendor Security
Agreement or any instruments entered into in connection therewith.
12. Miscellaneous Provisions.
a. The Company hereby authorizes and allows each of the Vendors to
communicate freely, and share information with, any member of the Bank Group
and their advisors.
b. Whether or not the transactions contemplated by this Agreement
shall be consummated, the Company agrees to pay on demand all costs and
expenses (including all reasonable direct out-of-pocket expenses of each
member of the Vendor Group and all reasonable fees and expenses of the
Vendor Group's legal counsel and financial advisors) incurred by each member
of the Vendor Group in connection with negotiating, documenting and
implementing this Agreement prior to the Effective Date. The Company further
agrees to pay on demand all reasonable fees and expenses of (i) Xxxxxx &
Xxxxxxx, counsel to the Vendor Group, in an aggregate amount not to exceed
$50,000 and (ii) Ernst & Young, financial advisor to the Vendor Group, in an
aggregate amount not to exceed $150,000 plus reasonable out-of-pocket
expenses, in either case from the Effective Date through the Termination
Date. From and after the occurrence of an Event of Default, the Company
agrees to reimburse on demand all costs and expenses (including all
reasonable direct out-of-pocket expenses of each of the Vendors and the fees
of Xxxxxx & Xxxxxxx and Xxxxx & Xxxxx, as advisors to the Vendor Group)
incurred by any of the Vendors or the Vendor Group in enforcing its rights
or in collecting any payment due from the Company under this Agreement or
the Trade Notes.
c. This Agreement shall not become binding as to any Vendor unless
and until (i) such Vendor has completed, executed and delivered to the
Company a signature page to this Agreement and (ii) the Company has
manifested its acceptance of such signature page by executing in the space
provided thereon and returning an original executed counterpart thereof to
such Vendor. Simultaneously with returning an accepted
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signature page to any Vendor, the Company shall forward a copy of such
signature page to Ernst & Young and Xxxxxx & Xxxxxxx at the addresses set
forth below. Upon request from any Vendor, the Company shall provide such
Vendor with a list of all Vendors who are party hereto; provided, however,
that the Company will keep confidential the amount of each individual Vendor
Claim.
d. By accepting the signature page of any Vendor as set forth in
Section 12(c) above, the Company agrees to and acknowledges the amount of
such Vendor's Vendor Claim as set forth on its signature page, except to the
extent the Company expressly disputes the amount of such Vendor Claim in a
writing sent to such Vendor within sixty (60) days after the Effective Date
and expressly specifies in such writing the amount the Company believes is
owed to such Vendor on account of its Existing Trade Debt.
e. The Company hereby acknowledges that it has been represented by
counsel of its choice in negotiating, executing and delivering this
Agreement and the Trade Notes. The Vendors acknowledge that Xxxxxx & Xxxxxxx
has acted as counsel and Ernst & Young has acted as financial advisor to the
Vendor Group but neither Xxxxxx & Xxxxxxx nor Xxxxx & Xxxxx has represented
any individual Vendor in connection with the negotiation, execution and
delivery of this Agreement and the Trade Notes. Each Vendor acknowledges
that it has had the opportunity to obtain independent legal advice from
counsel of its choice.
f. This Agreement may be executed in any number of counterparts
with the same effect as if all parties hereto had signed the same document.
All such counterparts shall be construed together and shall constitute one
instrument, but in making proof hereof it shall only be necessary to produce
one such counterpart. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
g. This Agreement shall be binding upon and inure to the benefit
of the Company, each of Vendors and their respective successors and assigns,
except that the Company may not assign or transfer any of its rights or
obligations under this Agreement as to any Vendor, or the Trade Note of such
Vendor without the prior written consent of such Vendor.
h. The Company and each of the Vendors shall take further actions
as are reasonably required and within its powers in order to carry out its
obligations under this Agreement and the Trade Notes.
i. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy)
and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made when delivered, or three business days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of the Company, and as set
forth on the signature page for each Vendor, or to such other address as may
be hereafter notified by the respective parties hereto:
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Party City Corporation
000 Xxxxxxx Xxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxx
Copies of all notices delivered pursuant to this Section 12(i) should
be sent to:
Xxxxxx & Xxxxxxx
Sears Tower, Suite 5800
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
Ernst & Young, LLP
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Facsimile: (000) 000-0000
Xxxx Associates, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxx
Facsimile: (000) 000-0000
j. The Company hereby waives any defenses or counterclaims it has
to any of the Trade Notes or its obligations evidenced thereby except for
the defense of a Vendor's breach of this Agreement. The Company agrees that
it will not exercise any right of offset it may have against any amounts
payable under any of the Trade Notes on account of any amounts owed to it by
any Vendor whether prior to or after the Effective Date except to the extent
that the amounts owed to the Company by such Vendor exceed any and all
amounts (other than the amounts payable under such Vendor's Trade Note)
payable to such Vendor by the Company.
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k. Time is of the essence of this Agreement and all of the terms,
provisions, covenants and conditions hereof.
l. The Company shall not offer any trade creditor not a party to
this Agreement with treatment on account of any obligation owed to such
trade creditor as of the Effective Date that is more favorable than that
provided to the Vendors herein without offering such treatment to each of
the Vendors; provided, however, that notwithstanding the foregoing, the
Company may in its discretion settle any obligation owed to a trade creditor
not a party to this Agreement that is outstanding as of the Effective Date
so long as the aggregate settlement payment to any single trade creditor
prior to the Principal Payment Date is equal to or less than $100,000.
m. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Signature pages to follow.]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: _________, 1999 AMSCAN, INC.
[Name of Vendor]
By: /s/Xxxxx X. Xxxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
Vendor Claim Amount: $15,800,000
Notice Address:
00 Xxxxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: Xxxxxx 00, 0000 XXXXX DISTRIBUTION USA, INC.
[Name of Vendor]
By: /s/Xxxxxx Xxxx
--------------
Name: Xxxxxx Xxxx
Title: Secretary and General Counsel
Vendor Claim Amount: $1,379,848.36
Notice Address:
000 Xxxxxxx Xxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 12, 1999 CREATIVE EXPRESSIONS
[Name of Vendor]
By: /s/Xxx X. XxXxxx
----------------
Name: Xxx X. XxXxxx
Title: VP and GM
Vendor Claim Amount: $5,153,229.77
Notice Address:
7240 Shadeland Station *300
Xxxxxxxxxxxx, XX 00000
Attn: Xxx X. XxXxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 16, 1999 EASTER UNLIMITED, INC. AND FUN WORLD
DIV. OF EASTER UNLIMITED, INC.
[Name of Vendor]
By: /s/Xxxxxxx Xxxxxx
-----------------
Name: Xxxxxxx Xxxxxx
Title: President
Vendor Claim Amount: $259,741.27
Notice Address:
Fun World
00 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 14, 1999 XXXXXX GREETINGS, INC.
[Name of Vendor]
By: /s/Xxxxxx X. Xxxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
Vendor Claim Amount: $2,585,473.29
Notice Address:
Xxxxxx Greetings, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 12, 1999 MARYLAND PLASTICS, INC.
[Name of Vendor]
By: /s/Xxxx X. Xxxxx, Xx.
---------------------
Name: Xxxx X. Xxxxx, Xx.
Title: Controller
Vendor Claim Amount: $409,192.00
Notice Address:
000 Xxxx Xxxxxxx Xxx.
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 16, 1999 PLASTICS, INC.
[Name of Vendor]
By: /s/Xxxxx Xxxxxx
---------------
Name: Xxxxx Xxxxxx
Title: President - GM
Vendor Claim Amount: $320,092
Notice Address:
000 Xxxxxx Xxxx
Xxxxx, XX 00000
Attn: Controller
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 16, 1999 RUBIE'S COSTUME CO., INC.
[Name of Vendor]
By: /s/Xxxx X. Beige
----------------
Name: Xxxx X. Beige
Title: President
Vendor Claim Amount: $195,361.09
Notice Address:
Xxx Xxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx X. Beige
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 16, 1999 THE BEISTLE COMPANY
[Name of Vendor]
By: /s/Xxxxxxxx X. Xxxx
-------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice President
Vendor Claim Amount: $700,978.93
Notice Address:
Xxxxxxxx X. Xxxx, VP
0 Xxxxxxx Xxxxx, XX Xxx 00
Xxxxxxxxxxxx, XX 00000
Attn: ________________
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 12, 1999 TURN UP THE MUSIC, INC.
[Name of Vendor]
By: /s/Xxxxxxx X. Xxxxxx
--------------------
Name: Xxxxxxx X. Xxxxxx
Title: Exec. VP-CEO
Vendor Claim Amount: $317,182.49
Notice Address:
000 Xxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 13, 1999 U.S. BALLOON MFG. CO., INC.
[Name of Vendor]
By: /s/Xxxxxxx Xxxxxx
-----------------
Name: Xxxxxxx Xxxxxx
Title: President
Vendor Claim Amount: $673,301.38
Notice Address:
U.S. Balloon Mfg. Co., Inc.
000 00 Xx.
Xxxxxxxx, XX
Attn: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers.
Date: August 12, 1999 UNIQUE INDUSTRIES, INC.
[Name of Vendor]
By: /s/Xxxxxxx Xxxxx
------------------
Name: Xxxxxxx Xxxxx
Title: Chairman/CEO
Vendor Claim Amount: $2,863,291.94
Notice Address:
Unique Industries, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Facsimile: (000) 000-0000
Agreed to and Accepted,
Date: August 16, 1999
PARTY CITY CORPORATION
By: /s/Xxxxxx X. Xxxxxx
-------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
EXHIBIT A - FORM OF TRADE NOTE
U.S. $_______________ Dated: August __, 1999
FOR VALUE RECEIVED, the undersigned, PARTY CITY CORPORATION, a Delaware
corporation (the "Company"), HEREBY PROMISES TO PAY to the order of
____________________ (the "Vendor") on November 15, 1999 (the "Payment Date")
the principal sum of U.S. $_______________ pursuant to that certain Vendor
Forbearance and Standstill Agreement, dated as of August ___, 1999 (as amended
or modified from time to time, the "Vendor Agreement"; the terms defined therein
being used herein as therein defined), by and among the Company and each of
those certain vendors (including the Vendor) that has executed a signature page
thereto that has been accepted by the Company in accordance with the terms set
forth therein.
The Company promises to pay interest at the rate of ten percent (10%)
per annum on the unpaid principal amount of this Trade Note from May 1, 1999
until the Payment Date. Such interest shall be due and payable in cash on the
earlier to occur (the "Interest Payment Date") of (i) January 15, 1999 or (ii)
the date on which a refinancing of the entire amount of the Bank Debt is
consummated. From and after an Event of Default, the Company agrees to pay
default interest at the rate of fourteen percent (14%) on any and all unpaid
principal until paid in full in cash.
Both principal and interest are payable in lawful money of the United
States of America to Vendor in same day funds.
This Trade Note is one of the Trade notes referred to in, and is
entitled to the benefits of, the Vendor Agreement. The Vendor Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events.
PARTY CITY CORPORATION
By:________________________
Name:______________________
Title:_____________________
EXHIBIT B
---------
Members of the Vendor Group
Amscan Bunzl Distribution, Inc.
Creative Expressions Fun World
Xxxxxx Greetings, Inc. Maryland Plastics, Inc.
Plastics, Inc. Rubie's
The Beistle Company Turn Up the Music, Inc.
U.S. Balloon Company Unique Industries, Inc.
