Exhibit 10.1

EXECUTION VERSION

SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT

SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “Second Amendment”), dated
as of February 16, 2018, among PARTY CITY HOLDINGS INC., a Delaware corporation
(the “Borrower Agent”), PARTY CITY CORPORATION, a Delaware corporation (the
“Subsidiary Borrower” and, together with the Borrower Agent, the “Borrowers”),
PC INTERMEDIATE HOLDINGS, INC., a Delaware corporation (“Holdings”), DEUTSCHE
BANK AG NEW YORK BRANCH (“DBNY”), as administrative agent (in such capacity, the
“Administrative Agent”) and each of the Persons party hereto as 2018 Replacement
Lenders (as defined below). Unless otherwise indicated, all capitalized terms
used herein and not otherwise defined shall have the respective meanings
provided such terms in the Credit Agreement referred to below (as amended by
this Second Amendment).

W I T N E S S E T H:

WHEREAS, the Borrowers, Holdings, the Administrative Agent, DBNY, as collateral
agent (in such capacity, including any permitted successor thereto, the
“Collateral Agent”) under the Loan Documents, the subsidiaries of the Borrowers
from time to time party thereto and each lender from time to time party thereto
(the “Lenders”) have entered into a Credit Agreement, dated as of August 19,
2015 (as amended by the First Amendment to Credit Agreement, dated as of
October 20, 2016, and as otherwise amended, amended and restated, supplemented
or otherwise modified prior to the date hereof, the “Credit Agreement”);

WHEREAS, on the date hereof (prior to giving effect to this Second Amendment),
there are outstanding Term Loans under the Credit Agreement (for purposes of
this Second Amendment, herein called the “Original Replaced Term Loans”) in an
aggregate principal amount of $1,211,267,500;

WHEREAS, in accordance with the provisions of Section 9.02(c) of the Credit
Agreement, Holdings and the Borrowers wish to amend the Credit Agreement to
enable the Borrowers to refinance in full the outstanding Original Replaced Term
Loans with the proceeds of 2018 Replacement Term Loans (as defined below) as
more fully provided herein;

WHEREAS, Holdings, the Borrowers, the Administrative Agent and the 2018
Replacement Lenders wish to amend the Credit Agreement to provide for the
refinancing in full of all outstanding Original Replaced Term Loans with the
2018 Replacement Term Loans on the terms and subject to the conditions set forth
herein; and

WHEREAS, Credit Suisse Securities (USA) LLC (together with any of its
affiliates, “CS”), Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank
of Tokyo Mitsubishi UFJ, Ltd., Barclays Bank PLC, Goldman Sachs Bank USA,
Macquarie Capital (USA) Inc., Morgan Stanley Senior Funding, Inc., Sumitomo
Mitsui Banking Corporation, Wells Fargo Securities, LLC, J.P. Morgan Securities
LLC, Deutsche Bank Securities Inc. and Mizuho Bank Ltd. (in each case, or any
affiliates thereof) shall act as joint lead arrangers and joint bookrunners with
respect to this Second Amendment and the 2018 Replacement Term Loans provided
for hereunder;

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NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is agreed as follows:

SECTION 1. Amendments to Credit Agreement.

(a)    (i) Subject to the satisfaction of the conditions set forth in Section 2
hereof, the 2018 Replacement Lenders hereby severally agree to make 2018
Replacement Term Loans to the Borrowers on the Second Amendment Effective Date
(as defined below) in the aggregate principal amount of $1,211,267,500 to
refinance all outstanding Original Replaced Term Loans in accordance with the
relevant requirements of the Credit Agreement (as amended hereby) and this
Second Amendment. It is understood and agreed that the 2018 Replacement Term
Loans being made pursuant to this Second Amendment and the Credit Agreement (as
modified hereby) shall constitute “Replacement Term Loans” as defined in, and
pursuant to, Section 9.02(c) of the Credit Agreement and the Original Replaced
Term Loans being refinanced shall constitute “Replaced Term Loans” as defined
in, and pursuant to, Section 9.02(c) of the Credit Agreement. Except as
expressly provided in this Second Amendment (including as to the Applicable Rate
and call protection) and the Credit Agreement (as modified hereby), the 2018
Replacement Term Loans shall be on terms identical to the Original Replaced Term
Loans (including as to maturity, Guarantors, Collateral (and ranking) and
payment priority).

(ii)    On the Second Amendment Effective Date, all then outstanding Original
Replaced Term Loans shall be refinanced in full as follows:

(w)    The outstanding principal amount of the Original Replaced Term Loan of
each Lender which (i) is an existing Lender under the Credit Agreement prior to
giving effect to this Second Amendment (each, an “Existing Lender”) and (ii) is
not party hereto as a 2018 Replacement Lender (a Lender meeting the requirements
of clauses (i) and (ii), each, a “Non-Converting Lender”) shall be repaid in
full in Cash.

(x)    To the extent any Existing Lender has a 2018 Replacement Term Loan
Conversion Amount (as defined in the Credit Agreement as amended hereby) that is
less than the full outstanding principal amount of the Original Replaced Term
Loan of such Lender, such Lender shall be repaid in Cash in an amount equal to
the difference between the outstanding principal amount of the Original Replaced
Term Loan of such Lender and such Lender’s 2018 Replacement Term Loan Conversion
Amount (the “Non-Converting Portion”).

(y)    The outstanding principal amount of the Original Replaced Term Loan of
each Existing Lender which has executed this Second Amendment as a “2018
Converting Lender” (each, a “2018 Converting Lender”) shall automatically be
converted into a term loan (each, a “Converted 2018 Replacement Term Loan”) in a
principal amount equal to such 2018 Converting Lender’s 2018 Replacement Term
Loan Conversion Amount (each such conversion, a “2018 Term Loan Conversion”).

 

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(z)    Each Person that has executed this Second Amendment as a “New 2018
Replacement Lender” (each, a “New 2018 Replacement Lender” and, together with
the 2018 Converting Lenders, collectively, the “2018 Replacement Lenders”)
severally agrees to make to the Borrowers a new term loan (each, a “New 2018
Replacement Term Loan” and, collectively, the “New 2018 Replacement Term Loans”
and, together with the Converted 2018 Replacement Term Loans, the “2018
Replacement Term Loans”) in Dollars in a principal amount equal to the amount
set forth opposite such New 2018 Replacement Lender’s name on Exhibit A hereto
(as to any New 2018 Replacement Lender, its “2018 Replacement Term Loan
Commitment”) on the Second Amendment Effective Date.

(iii)    Each 2018 Replacement Lender hereby agrees to “fund” its 2018
Replacement Term Loan as follows: (x) each 2018 Converting Lender shall “fund”
its 2018 Replacement Term Loan to the Borrowers by converting all or a portion
of its then outstanding principal amount of Original Replaced Term Loan into a
2018 Replacement Term Loan in a principal amount equal to such 2018 Converting
Lender’s 2018 Replacement Term Loan Conversion Amount as provided in clause
(ii)(y) above and (y) each New 2018 Replacement Lender shall fund in Cash to the
Borrowers an amount equal to such New 2018 Replacement Lender’s 2018 Replacement
Term Loan Commitment.

(iv)    The Converted 2018 Replacement Term Loans subject to the 2018 Term Loan
Conversion shall be allocated ratably to the outstanding Borrowings of Original
Replaced Term Loans (based upon the relative principal amounts of Borrowings of
Original Replaced Term Loans subject to different Interest Periods immediately
prior to giving effect thereto). Each resulting “borrowing” of Converted 2018
Replacement Term Loans shall constitute a new “Borrowing” under the Credit
Agreement and be subject to the same Interest Period (and the same LIBO Rate)
applicable to the Borrowing of Original Replaced Term Loans to which it relates,
which Interest Period shall continue in effect until such Interest Period
expires and a new Type of Borrowing is selected in accordance with the
provisions of Section 2.08 of the Credit Agreement. New 2018 Replacement Term
Loans shall be initially incurred pursuant to “borrowings” of LIBO Rate Loans
which shall be allocated ratably to the outstanding “deemed” Borrowings of
Converted 2018 Replacement Term Loans on the Second Amendment Effective Date
(based upon the relative principal amounts of the deemed Borrowings of Converted
2018 Replacement Term Loans subject to different Interest Periods on the Second
Amendment Effective Date after giving effect to the foregoing provisions of this
clause (iv)). Each such “borrowing” of New 2018 Replacement Term Loans shall
(A) be added to (and made a part of) the related deemed Borrowing of Converted
2018 Replacement Term Loans and (B) be subject to (x) an Interest Period which
commences on the Second Amendment Effective Date and ends on the last day of the
Interest Period applicable to the related deemed Borrowing of Converted 2018
Replacement Term Loans to which it is added and (y) the same LIBO Rate
applicable to such deemed Borrowing of Converted 2018 Replacement Term Loans.

(v)    On the Second Amendment Effective Date, the Borrowers shall pay in Cash
(a) all accrued and unpaid interest on the Original Replaced Term Loans through
the Second Amendment Effective Date and (b) to each Non-Converting Lender and
each 2018 Converting Lender with a Non-Converting Portion (solely with respect
to such Non-Converting Portion), any breakage loss or expenses due under
Section 2.16 of the Credit Agreement (it being understood that existing

 

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Interest Periods of the Original Replaced Term Loans held by 2018 Replacement
Lenders prior to the Second Amendment Effective Date shall continue on and after
the Second Amendment Effective Date pursuant to preceding clause (iv) and shall
accrue interest in accordance with Section 2.13 of the Credit Agreement (as
modified hereby) on and after the Second Amendment Effective Date as if the
Second Amendment Effective Date were a new Borrowing date). Notwithstanding
anything to the contrary herein or in the Credit Agreement, each 2018 Converting
Lender agrees, and each Existing Lender agrees (by execution of an Assignment
and Assumption with respect to any 2018 Replacement Term Loans), to waive any
entitlement to any breakage loss or expenses due under Section 2.16 of the
Credit Agreement with respect to the repayment of any Original Replaced Term
Loans of any such Lender with the proceeds of 2018 Replacement Term Loans on the
Second Amendment Effective Date.

(vi)    Promptly following the Second Amendment Effective Date, all Promissory
Notes, if any, evidencing the Original Replaced Term Loans shall be cancelled
and returned to the Borrowers, and any 2018 Replacement Lender may request that
its 2018 Replacement Term Loan be evidenced by a Promissory Note pursuant to
Section 2.10(e) of the Credit Agreement.

(vii)    Notwithstanding anything to the contrary contained in the Credit
Agreement, all proceeds of the New 2018 Replacement Term Loans (if any) will be
used solely to repay outstanding Original Replaced Term Loans of Non-Converting
Lenders (if any) and outstanding Original Replaced Term Loans of 2018 Converting
Lenders in an amount equal to the Non-Converting Portion (if any) of such 2018
Converting Lenders’ Original Replaced Term Loans, in each case, on the Second
Amendment Effective Date.

(b)    Subject to the satisfaction of the conditions set forth in Section 2
hereof, upon the making of the 2018 Replacement Term Loans, the Credit Agreement
is hereby amended as follows:

(i)    The definition of “Applicable Rate” appearing in Section 1.01 of the
Credit Agreement is hereby amended by amending and restating such definition in
its entirety as follows:

“Applicable Rate” means, for any day, with respect to any ABR Term Loan or LIBO
Rate Term Loan, the applicable rate per annum set forth below under the caption
“LIBO Rate Spread” or “ABR Spread”, as the case may be, based upon the Senior
Secured Leverage Ratio as of the most recent Adjustment Date; provided that
until the first Adjustment Date occurring at least one full Fiscal Quarter ended
after the Second Amendment Effective Date, the “Applicable Rate” shall be the
applicable rate per annum set forth below in Category 1:

 

Senior Secured Leverage Ratio    LIBO Rate Spread     ABR Spread  

Category 1

    

Senior Secured Leverage Ratio greater than 3.20 to 1.00

     2.75 %      1.75 % 

Category 2

    

Senior Secured Leverage Ratio equal to or less than 3.20 to 1.00

     2.50 %      1.50 % 

 

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The Applicable Rate shall be adjusted quarterly on a prospective basis on each
Adjustment Date based upon the Senior Secured Leverage Ratio in accordance with
the table above; provided that for so long as a Default or Event of Default has
occurred and is continuing, the Applicable Rate shall not be subject to
adjustment to any stepdown based on lower Senior Secured Leverage Ratio as
provided herein.

(ii)    The definition of “Commitment” in Section 1.01 of the Credit Agreement
is hereby amended by amending and restating it in its entirety as follows:

“Commitment” means (i) with respect to each Lender on the Closing Date, the
commitment of such Lender to make the Term Loans hereunder in an aggregate
amount not to exceed the amount set forth opposite such Lender’s name on the
Commitment Schedule as such amount may be adjusted from time to time in
accordance with this Agreement, (ii) with respect to each New 2016 Replacement
Lender on the First Amendment Effective Date, the commitment of such Lender to
make the 2016 Replacement Term Loans as provided in Section 1 of the First
Amendment in an aggregate amount not to exceed the 2016 Replacement Term Loan
Commitment of such New 2016 Replacement Lender, as such amount may be adjusted
from time to time in accordance with this Agreement and (iii) with respect to
each New 2018 Replacement Lender on the Second Amendment Effective Date, the
commitment of such Lender to make the 2018 Replacement Term Loans as provided in
Section 1 of the Second Amendment in an aggregate amount not to exceed the 2018
Replacement Term Loan Commitment of such New 2018 Replacement Lender, as such
amount may be adjusted from time to time in accordance with this Agreement. The
aggregate amount of the Lenders’ Commitments on the Closing Date (immediately
prior to the incurrence of the Term Loans on such date) is $1,340,000,000. The
aggregate amount of the Lenders’ Commitments on the First Amendment Effective
Date (immediately prior to the incurrence of the 2016 Replacement Term Loans on
such date) is $1,226,600,000 less the aggregate principal amount of all 2016
Replacement Term Loan Conversion Amounts. The aggregate amount of the Lenders’
Commitments on the Second Amendment Effective Date (immediately prior to the
incurrence of the 2018 Replacement Term Loans on such date) is $1,211,267,500
less the aggregate principal amount of all 2018 Replacement Term Loan Conversion
Amounts.

(iii)    The definition of “Term Loans” in Section 1.01 of the Credit Agreement
is hereby amended by amending and restating it in its entirety as follows:

“Term Loans” means (a) prior to the First Amendment Effective Date and the
making of the 2016 Replacement Term Loans pursuant to the First Amendment, a
Loan by a Lender to the Borrowers pursuant to Section 2.01(a) , (b) on and after

 

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the First Amendment Effective Date and upon the making of the 2016 Replacement
Term Loans pursuant to the First Amendment but prior to the Second Amendment
Effective Date and the making of the 2018 Replacement Term Loans pursuant to the
Second Amendment, the 2016 Replacement Term Loans made pursuant to, and in
accordance with the terms of, Section 2.01(b) and the First Amendment (including
by way of the 2016 Term Loan Conversion) and (c) on and after the Second
Amendment Effective Date and upon the making of the 2018 Replacement Term Loans
pursuant to the Second Amendment, the 2018 Replacement Term Loans made pursuant
to, and in accordance with the terms of, Section 2.01(c) and the Second
Amendment (including by way of the 2018 Term Loan Conversion); provided that on
and after the incurrence of any Incremental Term Loans, Refinancing Term Loans,
Extended Term Loans and Replacement Term Loans, the term “Term Loans” as used in
Section 9.05(g) shall include all such Incremental Term Loans, Refinancing Term
Loans, Extended Term Loans and Replacement Term Loans, as the case may be.

(iv)    Section 1.01 of the Credit Agreement is hereby further amended by adding
the following definitions in appropriate alphabetical order as follows:

“2018 Converting Lender” has the meaning provided in the Second Amendment.

“2018 Replacement Term Loan” has the meaning provided in the Second Amendment.

“2018 Replacement Term Loan Commitment” has the meaning provided in the Second
Amendment.

“2018 Replacement Term Loan Conversion Amount” shall mean, as to any 2018
Converting Lender, the amount determined by the 2018 Replacement Term Loan Lead
Arranger and the Borrower Agent as the final amount of such 2018 Converting
Lender’s 2018 Term Loan Conversion on the Second Amendment Effective Date and
notified to the Administrative Agent and each such 2018 Converting Lender by the
2018 Replacement Term Loan Lead Arranger on or prior to the Second Amendment
Effective Date. The “2018 Replacement Term Loan Conversion Amount” of any 2018
Converting Lender shall not exceed (but may be less than) the principal amount
of such 2018 Converting Lender’s Original Replaced Term Loans. All such
determinations made by the 2018 Replacement Term Loan Lead Arranger and the
Borrower Agent shall, absent manifest error, be final, conclusive and binding on
the Borrowers and the Lenders, and the Administrative Agent, the 2018
Replacement Term Loan Lead Arranger and the Borrowers shall have no liability to
any Person with respect to such determination absent gross negligence or willful
misconduct, in each case, as determined by a court of competent jurisdiction in
a final and non-appealable judgment.

“2018 Replacement Term Loan Lead Arranger” shall mean Credit Suisse Securities
(USA) LLC, in its capacity as a joint lead arranger and joint bookrunner with
respect to the Second Amendment and the 2018 Replacement Term Loans.

 

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“2018 Term Loan Conversion” has the meaning provided in the Second Amendment.

“Adjustment Date” means the date of delivery of financial statements required to
be delivered pursuant to Section 5.01(b) or Section 5.01(c), as applicable.

“Second Amendment” shall mean the Second Amendment to Term Loan Credit
Agreement, dated as of February 16, 2018, by and among Holdings, the Borrowers,
the Administrative Agent and the 2018 Replacement Lenders (as defined therein).

“Second Amendment Effective Date” has the meaning provided in the Second
Amendment.

“New 2018 Replacement Lender” has the meaning provided in the Second Amendment.

“Original Replaced Term Loans” has the meaning provided in the Second Amendment.

(v)    Section 2.01 of the Credit Agreement is hereby amended by inserting the
following clause (c) at the end of said Section:

“(c) On the Second Amendment Effective Date, (i) each New 2018 Replacement
Lender severally agrees to make to the Borrowers a 2018 Replacement Term Loan
denominated in Dollars in a principal amount equal to such Lender’s 2018
Replacement Term Loan Commitment and (ii) each 2018 Converting Lender agrees
that, without any further action by any party to this Agreement, a portion of
such 2018 Converting Lender’s Original Replaced Term Loans equal to such 2018
Converting Lender’s 2018 Replacement Term Loan Conversion Amount shall
automatically be converted into a 2018 Replacement Term Loan to the Borrowers in
Dollars and in a like principal amount, in each case in accordance with the
terms and conditions of the Second Amendment.”

(vi)    Section 2.09 of the Credit Agreement is hereby amended by amending and
restating the text of said Section as follows:

“The Commitment of each Lender as in effect on the Closing Date shall
automatically terminate in its entirety on the Closing Date (after giving effect
to the incurrence of Term Loans on such date). The 2016 Replacement Term Loan
Commitment of each New 2016 Replacement Lender

 

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shall automatically terminate in its entirety on the First Amendment Effective
Date (after giving effect to the incurrence of the New 2016 Replacement Term
Loans on such date). The 2018 Replacement Term Loan Commitment of each New 2018
Replacement Lender shall automatically terminate in its entirety on the Second
Amendment Effective Date (after giving effect to the incurrence of the New 2018
Replacement Term Loans on such date).”

(vii)    Section 2.10(a) of the Credit Agreement is hereby amended by deleting
the text “First Amendment Effective Date” appearing therein and inserting the
text “Second Amendment Effective Date” in lieu thereof.

(viii)    Section 2.11(b)(i) of the Credit Agreement is hereby amended by
deleting the text “December 31, 2015” appearing therein and inserting the text
“December 31, 2018” in lieu thereof.

(ix)    Section 2.12(c) of the Credit Agreement is hereby amended by deleting
each reference to “First Amendment Effective Date” appearing therein and
inserting the text “Second Amendment Effective Date” in lieu thereof.

(x)    Section 5.01(d) of the Credit Agreement is hereby amended by (i) deleting
the text “and” appearing at the end of clause (B) thereof and (ii) inserting the
following immediately after clause (C) appearing therein:

“, and (D) in the case of financial statements delivered pursuant to Sections
5.01(b) and 5.01(c) on an Adjustment Date on which the Applicable Rate is to be
changed in accordance with the definition thereof, setting forth a reasonably
detailed calculation of the Senior Secured Leverage Ratio.”

(xi)    Section 5.11 of the Credit Agreement is hereby amended by inserting the
following sentence immediately after the second sentence appearing therein:

“All proceeds of the 2018 Replacement Term Loans incurred on the Second
Amendment Effective Date shall be used to repay and/or replace all Term Loans
outstanding immediately prior to the Second Amendment Effective Date.”

(c)    Each Borrower hereby consents, for purposes of Section 9.05(b)(i)(A) of
the Credit Agreement, to the assignment on or within 30 days of the Second
Amendment Effective Date of any 2018 Replacement Term Loans by any New 2018
Replacement Lender to (i) any Person that was an Existing Lender on the Second
Amendment Effective Date (immediately prior to giving effect thereto) or
(ii) any Eligible Assignee separately identified, and acceptable, to the
Borrower Agent.

SECTION 2. Conditions of Effectiveness of this Second Amendment. This Second
Amendment shall become effective on the date when the following conditions shall
have been satisfied (such date, the “Second Amendment Effective Date”):

(a)    Holdings, the Borrowers, the Administrative Agent and the 2018
Replacement Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to LendAmend LLC
online via www.LendAmend.com or via e-mail to PartyCityFeb18@lendamend.com;

 

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(b)    the Borrowers shall have paid (or shall pay substantially concurrently
with the effectiveness of this Second Amendment), by wire transfer of
immediately available funds, (i) to the 2018 Replacement Term Loan Lead
Arranger, all fees as have been separately agreed and (ii) to the Administrative
Agent, for the ratable account of each Existing Lender, all accrued but unpaid
interest on the Original Replaced Term Loans through the Second Amendment
Effective Date;

(c)    on the Second Amendment Effective Date and after giving effect to this
Second Amendment, no Default under Sections 7.01(a), 7.01(f) or 7.01(g) of the
Credit Agreement or Event of Default shall have occurred and be continuing and
the Administrative Agent shall have received from the Borrowers a certificate
executed by a Responsible Officer of the Borrower Agent, certifying the
foregoing;

(d)    the Administrative Agent shall have received the Acknowledgment and
Confirmation, substantially in the form of Exhibit B hereto, executed and
delivered by a Responsible Officer of each of the Borrowers and each other Loan
Party;

(e)    there shall have been delivered to the Administrative Agent (A) a
certificate, dated as of the Second Amendment Effective Date, executed by a
Responsible Officer (which shall be deemed for this purpose to include any
Secretary or any Assistant Secretary) of Holdings and each of the Borrowers
certifying (i) that no amendments or modifications have been made to the
Organizational Documents of Holdings and each of the Borrowers since the same
were delivered to the Administrative Agent prior to the Second Amendment
Effective Date, (ii) that attached thereto are true and correct copies of
resolutions of the board of directors of Holdings and the Borrowers approving
and authorizing the execution, delivery and performance of this Second Amendment
and the performance of the Credit Agreement (as amended by this Second
Amendment) and the Form of Acknowledgement and Confirmation attached as Exhibit
B hereto, as applicable, and that such resolutions are in full force and effect
without modification or amendment and (iii) as to the incumbency and specimen
signature of each officer or authorized person executing this Second Amendment
or any other document delivered in connection herewith on behalf of Holdings and
each of the Borrowers (together with a certificate of another officer or
authorized person as to the incumbency and specimen signature of the officer or
authorized person executing the certificate in this clause (iii), and (B) good
standing certificates for Holdings and the Borrowers from the jurisdiction in
which they are organized;

(f)    the Administrative Agent shall have received from the Borrower Agent a
solvency certificate from the chief financial officer of the Borrower Agent
(after giving effect to the incurrence of the 2018 Replacement Term Loans on the
Second Amendment Effective Date and the application of the proceeds thereof)
substantially in the form of Exhibit H to the Credit Agreement;

(g)    the Administrative Agent shall have received an opinion from Ropes & Gray
LLP, special New York counsel to the Loan Parties, addressed to the
Administrative Agent, the Collateral Agent, the 2018 Replacement Term Loan Lead
Arranger and the Lenders; and

 

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(h)    the Administrative Agent shall have received a “Life of Loan” Federal
Emergency Management Agency Standard Flood Hazard Determination with respect to
the Mortgaged Properties (together with a notice about special flood hazard area
status and flood disaster assistance, duly executed by the Borrower or the
applicable Subsidiary (if required), and evidence of flood insurance, in the
event any such Mortgaged Properties or portion thereof is located in a special
flood hazard area).

SECTION 3. Mortgaged Property. Within 90 days after the Second Amendment
Effective Date (or such later date as the Administrative Agent may agree in its
sole discretion), the Administrative Agent shall have received:

(a)    a fully executed counterpart of an amendment to the existing Mortgage
(the “Mortgage Amendment”; together with the existing Mortgage, the “Amended
Mortgage”), duly executed by the applicable Subsidiary, together with evidence
that such counterpart has been delivered to the title insurance company insuring
the Amended Mortgage for recording;

(b)    a date down endorsement in connection with the existing lender’s title
insurance policy insuring the existing Mortgage, which endorsement shall insure
that the Amended Mortgage is a valid and enforceable Lien on the Mortgaged
Property, free of any other Liens except Permitted Liens;

(c)    such affidavits and certificates as shall be required to induce the title
company to issue the endorsement contemplated in subparagraph (b) above and
evidence of payment of all applicable title insurance premiums, search and
examination charges, mortgage recording taxes, if applicable, and related
charges required for the issuance of such endorsement; and

(d)    an opinion from local counsel in the state where the Mortgaged Property
is located, in form and substance reasonably satisfactory to the Administrative
Agent.

SECTION 4. Costs and Expenses. Each Borrower hereby reconfirms its obligations
(a) pursuant to Section 9.03 of the Credit Agreement to pay and reimburse the
Administrative Agent in accordance with the terms thereof and (b) to pay and
reimburse the 2018 Replacement Term Loan Lead Arranger in accordance with
arrangements that have been separately agreed.

SECTION 5. Remedies. This Second Amendment shall constitute a “Loan Document”
for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 6. Representations and Warranties. To induce the Administrative Agent
and the 2018 Replacement Lenders to enter into this Second Amendment, each of
Holdings and the Borrowers represents and warrants to the Administrative Agent
and the 2018 Replacement Lenders on and as of the Second Amendment Effective
Date that, in each case:

(a)    this Second Amendment has been duly authorized, executed and delivered by
it and each of this Second Amendment and the Credit Agreement (as amended by
this Second Amendment) constitute its legal, valid and binding obligation,
enforceable against it in accordance

 

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with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws of
general applicability relating to or limiting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law and (ii) the need for filings and registrations
necessary to create or perfect the Liens on Collateral granted by the Loan
Parties in favor of the Collateral Agent;

(b)    all representations and warranties contained in the Credit Agreement and
in the other Loan Documents are true and correct in all material respects with
the same effect as though such representations and warranties had been made on
the Second Amendment Effective Date (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date); and

(c)    the 2018 Replacement Term Loans have been incurred in compliance with the
requirements of Section 9.02(c) of the Credit Agreement.

SECTION 7. Intercreditor Acknowledgement. In accordance with Section 3.4(c)(i)
of the Intercreditor Agreement, the 2018 Replacement Lenders hereby notify the
ABL Facility Security Agent and the ABL Facility Secured Parties (each as
defined in the Intercreditor Agreement) that the Original Replaced Term Loans
shall be Refinanced (as defined in the Intercreditor Agreement) pursuant to this
Second Amendment and the Credit Agreement (as modified hereby), and hereby
(i) acknowledge and agree to the terms of the Intercreditor Agreement and
(ii) agree to be bound by all terms and conditions of the Intercreditor
Agreement as a “Term Loan Secured Party”. The 2018 Replacement Lenders hereby
authorize the Administrative Agent to provide on its behalf any notice to the
ABL Facility Security Agent and the ABL Facility Secured Parties (each as
defined in the Intercreditor Agreement) as it may deem necessary or advisable
(in its sole discretion) to ensure compliance with Section 3.4(c)(i) of the
Intercreditor Agreement.

SECTION 8. Reference to and Effect on the Credit Agreement and the Loan
Documents.

(a)    On and after the Second Amendment Effective Date, (i) each reference in
the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement, as amended by this Second Amendment; (ii) the 2018 Replacement
Term Loans shall constitute “Term Loans” for all purposes under the Credit
Agreement (other than for purposes of Recital A to the Credit Agreement,
Section 2.01(a) of the Credit Agreement, the first sentence of Section 2.09 of
the Credit Agreement, Sections 3.13 and 4.01 of the Credit Agreement, the first
sentence of Section 5.11 of the Credit Agreement, clause (i) of the definition
of Commitment and the definition of “Transactions”); and (iii) each 2018
Replacement Lender shall constitute a “Lender” as defined in the Credit
Agreement.

(b)    The Credit Agreement and each of the other Loan Documents, as
specifically amended by this Second Amendment, are and shall continue to be in
full force and effect and are hereby in all respects ratified and confirmed.
Without limiting the generality of the foregoing, the Collateral Documents and
all of the Collateral described therein do and shall continue to secure the
payment of all Secured Obligations of the Loan Parties, in each case, as amended
by this Second Amendment.

 

11

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(c)    The execution, delivery and effectiveness of this Second Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

SECTION 9. Governing Law. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 10. Counterparts. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrowers and the Administrative Agent.
Delivery by facsimile or electronic transmission of an executed counterpart of a
signature page to this Second Amendment shall be effective as delivery of an
original executed counterpart of this Second Amendment.

[The remainder of this page is intentionally left blank.]

 

12

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Second Amendment as of the date first above
written.

 

PARTY CITY HOLDINGS INC. By:  

/s/ Daniel J. Sullivan

  Name:   Daniel J. Sullivan   Title:   Chief Financial Officer PARTY CITY
CORPORATION By:  

/s/ Michael A. Correale

  Name:   Michael A. Correale   Title:   Vice President PC INTERMEDIATE
HOLDINGS, INC. By:  

/s/ James M. Harrison

  Name:   James M. Harrison   Title:   President

 

Signature Page to Second Amendment to Party City Term Loan Credit Agreement

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DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent By:  

/s/ Dusan Lazarov

  Name:   Dusan Lazarov   Title:   Director By:  

/s/ Marcus Tarkington

  Name:   Marcus Tarkington   Title:   Director

 

Signature Page to Second Amendment to Party City Term Loan Credit Agreement

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CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a New 2018 Replacement Lender By:  

/s/ Vipul Dhadda

  Name:   Vipul Dhadda   Title:   Authorized Signatory By:  

/s/ Brady Bingham

  Name:   Brady Bingham   Title:   Authorized Signatory

 

Signature Page to Second Amendment to Party City Term Loan Credit Agreement

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BY ITS EXECUTION OF THIS SIGNATURE PAGE, THE UNDERSIGNED HEREBY (I) REQUESTS TO
CONVERT THE FULL PRINCIPAL AMOUNT OF ITS ORIGINAL REPLACED TERM LOANS INTO
CONVERTED 2018 REPLACEMENT TERM LOANS PURSUANT TO, AND ON THE TERMS AND
CONDITIONS SET FORTH IN, THIS SECOND AMENDMENT TO TERM LOAN CREDIT AGREEMENT AND
(II) ACKNOWLEDGES AND AGREES THAT ITS 2018 REPLACEMENT TERM LOAN CONVERSION
AMOUNT MAY BE LESS THAN THE FULL PRINCIPAL AMOUNT OF ITS ORIGINAL REPLACED TERM
LOANS WHICH IT REQUESTS TO CONVERT HEREUNDER.

[Lender signature pages on file with the Administrative Agent]

 

Signature Page to Second Amendment to Party City Term Loan Credit Agreement

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EXHIBIT A

NEW 2018 REPLACEMENT TERM LOAN COMMITMENTS

 

New 2018 Replacement Lender

   2018 Replacement Term Loan Commitment  

Credit Suisse AG, Cayman Islands Branch

   $ 212,437,714.70  

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EXHIBIT B

FORM OF ACKNOWLEDGMENT AND CONFIRMATION

1.    Reference is made to the Second Amendment, dated as of February 16, 2018
(the “Second Amendment”), to Term Loan Credit Agreement, dated as of August 19,
2015 (as amended by the First Amendment to Credit Agreement, dated as of
October 20, 2016 and as otherwise amended, amended and restated, supplemented or
otherwise modified prior to the date hereof, the “Credit Agreement”), among
PARTY CITY HOLDINGS INC., a Delaware corporation (the “Borrower Agent”), PARTY
CITY CORPORATION, a Delaware corporation (the “Subsidiary Borrower” and,
together with the Borrower Agent, the “Borrowers”), PC INTERMEDIATE HOLDINGS,
INC., a Delaware corporation (“Holdings”), DEUTSCHE BANK AG NEW YORK BRANCH
(“DBNY”), as administrative agent (in such capacity, the “Administrative Agent”)
and each 2018 Replacement Lender party thereto. Capitalized terms used herein
but not otherwise defined shall have the meanings set forth in the Credit
Agreement or Second Amendment, as applicable.

2.    Certain provisions of the Credit Agreement are being amended and/or
modified pursuant to the Second Amendment. Each of the parties hereto hereby
agrees that, with respect to each Loan Document to which it is a party, after
giving effect to the Second Amendment:

(a)    all of its obligations, liabilities and indebtedness under such Loan
Document, including guarantee obligations, shall remain in full force and effect
on a continuous basis (including, without limitation, with respect to 2018
Replacement Term Loans); and

(b)    all of the Liens and security interests created and arising under such
Loan Document remain in full force and effect on a continuous basis, and the
perfected status and priority as described in Section 3.16 of the Credit
Agreement of each such Lien and security interest continues in full force and
effect on a continuous basis, unimpaired, uninterrupted and undischarged as
collateral security for the Secured Obligations (including, without limitation,
the 2018 Replacement Term Loans), to the extent provided in such Loan Documents.

3.    THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

4.    This Acknowledgment and Confirmation may be executed by one or more of the
parties hereto on any number of separate counterparts (including by telecopy or
other electronic transmission), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.

[rest of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment and
Confirmation to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.

 

PC INTERMEDIATE HOLDINGS, INC. By:  

                                                              

Name:   Title:  

 

Signature Page to Acknowledgment and Confirmation of Party City Term Loan Second
Amendment

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PARTY CITY HOLDINGS INC. PARTY CITY CORPORATION ANAGRAM INTERNATIONAL, INC.
ANAGRAM INTERNATIONAL HOLDINGS, INC. AM-SOURCE, LLC AMSCAN INC. TRISAR, INC. By:
 

                                          

Name:   Title:   ANAGRAM EDEN PRAIRIE PROPERTY HOLDINGS LLC By: PARTY CITY
HOLDINGS, INC., its sole member By:  

                                          

Name:   Title:   AMSCAN PURPLE SAGE, LLC AMSCAN NM LAND, LLC By: AMSCAN INC.,
its sole manager By:  

                                          

Name:   Title:   PARTY HORIZON INC. By:  

                                          

Name:   Title: