Exhibit 10.21

FIRST AMENDMENT AGREEMENT

     THIS FIRST AMENDMENT AGREEMENT (this “Amendment”) is entered into as of
February 10, 2005 by and among, on the one hand, the financial institutions from
time to time party to the Loan Agreement referred to below as Lenders (the
“Lenders”), Wells Fargo Retail Finance, LLC, as the arranger, collateral and
administrative agent for the Lender Group and any other holder of Obligations
(in such capacity, “Agent”), and, on the other hand, Party City Corporation, a
Delaware corporation (the “Borrower”).

RECITALS

     Borrower, the Lenders and the Agent have entered into a Loan and Security
Agreement dated as of January 9, 2003 (as amended to the date hereof, as amended
hereby and as further amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”) pursuant to which the Lenders and the Agent
have agreed to make revolving credit loans and to provide other financial
accommodations to Borrower. The parties signatory hereto wish to amend the Loan
Agreement as set forth herein.

     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 respective meanings given such terms in the Loan Agreement.

     2. Amendment. Section 7.1 of the Loan Agreement is hereby amended by
deleting subsection (h) of such Section 7.1 in its entirety and inserting in
lieu thereof the following new subsection (h):

     “(h) Unsecured Indebtedness not otherwise permitted under this Section not
to exceed $1,000,000 in the aggregate at any one time outstanding.”

     3. Conditions Precedent to 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 Amendment.

     (a) After giving effect to this Amendment, 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) After giving effect to this Amendment, no Default or Event of Default
shall have occurred and be continuing on the date hereof, nor shall any Default
or Event of Default result from the consummation of the transactions
contemplated herein;

     (c) This Amendment shall have been executed by Borrower, the Agent and the
Required Lenders and shall be in full force and effect; and

 

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     (d) 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 Borrower, the Agent or any
Lender.

     4. Representations and Warranties. Borrower hereby represents and warrants
to the Agent that:

     (a) the execution, delivery, and performance of this Amendment and of the
Loan Agreement are within Borrower’s corporate, limited liability company and/or
partnership powers, as applicable, have been duly authorized by all necessary
corporate, limited liability company and/or partnership action, as applicable,
and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ or injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter, bylaws or other
operative or formative documents, or of any contract or undertaking to which it
is a party or by which any of its properties may be bound or affected;

     (b) this Amendment has been duly executed and delivered by Borrower;

     (c) this Amendment and the Loan Agreement constitute Borrower’s legal,
valid, and binding obligation, enforceable against Borrower in accordance with
its terms;

     (d) after giving effect to this Amendment, Borrower is in compliance with
all of the terms and provisions set forth in the Loan Agreement and each of the
other Loan Documents, each as previously amended and as amended hereby, on their
part to be observed or performed on or prior to the date hereof;

     (e) after giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing; and

     (f) since December 31, 2004, no Material Adverse Change has occurred.

     5. Choice of Law. The validity of this 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 State of New York.

     6. Counterparts; Telefacsimile Execution. This Amendment may be executed in
any number of counterparts and by different parties in 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 Amendment by
telefacsimile shall be as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.

     7. Reaffirmation. Borrower further reaffirms all of its obligations under
the Loan Agreement and the other Loan Documents.

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     8. Effect on Loan Agreement. The execution, delivery, and performance of
this 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 or any
Lender 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 Amendment and the Loan Agreement.

     10. Miscellaneous.

     (a) Upon and after the effectiveness of this Amendment, each reference in
the Loan Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words
of like import referring to the Loan Agreement, and each reference in the other
Loan Documents to “the Loan Agreement”, “thereunder”, “therein”, “thereof”, or
words of like import referring to the Loan Agreement, shall mean and be a
reference to the Loan Agreement as amended hereby.

     (b) Except to the extent expressly amended hereby, the Loan Agreement and
all other Loan Documents shall be unaffected hereby, shall continue in full
force and effect, are hereby in all respects ratified and confirmed, and shall
constitute the legal, valid, binding and enforceable obligations of Borrower to
the Lenders and the Agent.

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     IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first above written.

                  PARTY CITY CORPORATION
 
           

  By:   /s/ Gregg Melnick              

      Name:    Gregg Melnick    

      Title:      Chief Financial Officer    
 
                WELLS FARGO RETAIL FINANCE, LLC,
as Agent and as a Lender
 
           

  By:   /s/ Lynn S. Whitmore              

      Name:    Lynn S. Whitmore    

      Title:      Vice President    
 
                FLEET RETAIL FINANCE, INC.,
as a Lender
 
           

  By:   /s/ Christine Hutchinson            

      Name:   Christine Hutchinson    

      Title:     Vice President    

Signature Page