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EXHIBIT 10.16

Execution Copy

TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT (this Agreement) is made as of January
9, 2003 by and between Party City Corporation, a Delaware corporation
(Grantor), and WELLS FARGO RETAIL FINANCE, LLC, as the arranger, collateral
agent, and administrative agent for the Lender Group and any other holder of
Obligations under, and as defined in, the Loan Agreement referred to below
(together with its successor(s) thereto in such capacity, the Agent).

INTRODUCTION:

Pursuant to the Loan and Security Agreement dated as of the date hereof
(as amended, restated, supplemented and/or modified from time to time, the
Loan Agreement) by and among the Grantor, the Agent and the financial
institutions from time to time party thereto as Lenders (the Lenders), the
Agent and the Lenders have agreed, subject to the terms and conditions set
forth therein, to make revolving credit loans and to provide other financial
accommodations to the Grantor (collectively, the Loans).

It is a condition precedent to the effectiveness of the Loan Agreement
that the Grantor execute and deliver this Agreement and grant to the Agent, for
the benefit of the Lender Group and any other holder of Obligations under, and
as defined in, the Loan Agreement (the Lender Group and such other holders of
Obligations collectively with the Agent, the Secured Parties), a continuing
security interest in all of the Trademark Collateral referred to below to
secure all of the Obligations.

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Agent
and Lenders to make Loans to the Grantor pursuant to the Loan Agreement, the
Grantor agrees, for the benefit of the Agent and each other Secured Party, as
follows:

SECTION 1. Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided in the Loan Agreement.

SECTION 2. Grant of Security Interest. To secure the prompt performance
of the Obligations, the Grantor hereby collaterally assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Agent, for the
benefit of the Secured Parties, and hereby grants to the Agent, for the benefit
of the Secured Parties, a continuing security interest in all of the following
property, whether now or hereafter existing or acquired by the Grantor (the
Trademark Collateral):



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| | (a) (i) all of its trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, patents, and all goodwill of the business
associated therewith, now existing or hereafter adopted or acquired
including those referred to in Schedule I attached hereto under such
Grantors





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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | name, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings
and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof
or any other country or political subdivision thereof or otherwise, and
all common-law rights relating to the foregoing, and (ii) the right to
obtain all reissues, extensions or renewals of the foregoing (each, a
Trademark);



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| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) all Trademark licenses for the grant by or to the Grantor of any
right to use any Trademark, including each Trademark license referred to
in Schedule I attached hereto under such Grantors name; and



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| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantors against third parties for past,
present or future infringement or dilution of any Trademark, Trademark
registration or Trademark license.

SECTION 3. Security Agreement. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest
of the Agent in the Trademark Collateral with the United States Patent and
Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Agent for its
benefit and the ratable benefit of each other Secured Party under the Loan
Agreement. The Loan Agreement (and all rights and remedies of each Secured
Party thereunder) shall remain in full force and effect in accordance with its
terms.

SECTION 4. Covenants. The Grantor covenants and agrees to comply with
the following provisions as such provisions relate to any item of Trademark
Collateral (other than items of Trademark Collateral which are not,
individually or in the aggregate, material):



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| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) the Grantor shall promptly notify the Agent if it knows, or has
reason to know, that any application or registration relating to any
material item of the Trademark Collateral may become abandoned or
dedicated to the public or placed in the public domain or invalid or
unenforceable, or of any adverse determination or development (including
the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any
foreign counterpart thereof or any court) regarding the Grantors
ownership of any of the Trademark Collateral, its right to register the
same or to keep and maintain and enforce the same;



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| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) in no event will the Grantor or any of its respective agents,
employees, designees or licensees file an application for the
registration of any Trademark Collateral with the United States Patent
and Trademark Office or any similar office or agency in any other country
or any political subdivision thereof, unless it promptly informs the
Agent, and upon request of the Agent, executes and delivers all
agreements, instruments and documents as the Agent may reasonably request
to evidence the security interest of the Agent and the other Secured
Parties in such Trademark Collateral;

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| | (c) the Grantor will take all the necessary steps, including in any
proceeding before the United States Patent and Trademark Office or any
similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue any application (and to
obtain the relevant registration after application) filed with respect
to, and to maintain any registration of, all material items of the
Trademark Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that (i) dedication, abandonment or
invalidation is permitted under the foregoing clause (b) or (ii) the
Grantor shall either (a) reasonably and in good faith determine that any
of such Trademark Collateral is of negligible economic value to the
Grantor, or (b) have a valid business purpose to do otherwise); and



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| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) the Grantor will promptly (but no less than quarterly) execute
and deliver to the Agent a Trademark Security Agreement, substantially in
the form of this Trademark Security Agreement following its obtaining an
interest in any material trademarks, and shall execute and deliver to the
Agent any other document required to acknowledge or register or perfect
the Secured Parties interest in any part of such item of material
Trademark Collateral, in each case at the request of the Agent.

SECTION 5. Release of Liens. Upon (a) the disposition of Trademark
Collateral in accordance with the Loan Agreement or (b) the payment in full of
the Obligations (other than contingent indemnification obligations for which
neither the Agent nor the Lenders have yet made a claim) and the termination of
the Lender Groups obligations to make Loans under the Loan Agreement, the
security interests granted herein shall automatically terminate with respect to
(i) such Trademark Collateral (in the case of clause 5(a)) or (ii) all
Trademark Collateral (in the case of clause 5(b)). Upon any such disposition
or termination, the Agent will, at the Grantors sole expense, deliver to the
Grantor, without any representations, warranties or recourse of any kind
whatsoever, all Trademark Collateral held by the Agent hereunder, and execute
and deliver to the Grantor such documents as the Grantor shall reasonably
request to evidence such termination.

SECTION 6. Acknowledgment. The Grantor further acknowledges and affirms
that the rights and remedies of the Agent with respect to the security interest
in the Trademark Collateral granted hereby are more fully set forth in the Loan
Agreement, the terms and provisions of which (including the remedies provided
for therein) are incorporated by reference herein as if fully set forth herein.

SECTION 7. Due Authorization. The Grantor represents and warrants that
the execution, delivery, and performance by the Grantor of this Agreement have
been duly authorized by all necessary action on the part of the Grantor.

SECTION 8. Loan Document. This Agreement is a Loan Document executed
pursuant to the Loan Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.

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SECTION 9. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

SECTION 10. Governing Law. This Agreement shall be construed under and
governed by the laws of The State of New York.

[Signatures appear on next page.]

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered by its officer thereunto duly authorized as
of the date first above written.

| |  |                                  |  |                        
| |  | -------------------------------- |  | -----------------------
| |  | GRANTOR:                        
| |  |                                  |  |                        
| |  | PARTY CITY CORPORATION          
| |  |                                  |  |                        
| |  | By:                              |  | /s/ Linda M. Siluk     
| |  |                                  |  |                        
| |  |                                  |  | Linda M. Siluk         
| |  |                                  |  | Chief Financial Officer
| |  |                                  |  |                        
| |  | AGENT:                          
| |  |                                  |  |                        
| |  | WELLS FARGO RETAIL FINANCE, LLC,
| |  | as Agent                        
| |  |                                  |  |                        
| |  | By:                              |  | /s/ David Molinario    
| |  |                                  |  |                        
| |  |                                  |  | David Molinario        
| |  |                                  |  | Vice President         

|                    |  |                    
|------------------- |  | -------------------
|State of New Jersey |  |                    
|                   
|County of Morris    |  | January      , 2003

Then personally appeared the above named Linda M. Siluk, as Chief
Financial Officer of Party City Corporation, and acknowledged the foregoing
instrument to be her free act and deed as Chief Financial Officer of Party City
Corporation, before me,

| |                                    
| | -----------------------------------
| | /s/ Maura Santos                   
| |                                    
|
| | Notary Public                      
| |                                    
| | My commission expires:             
| |                                    
| | Maura Santos                       
| | Bergen County                      
| | Notary Public of New Jersey        
| | My commission expires Dec. 12, 2004
| | ID #2172812                        

Signature Page





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SCHEDULE I

to Trademark Security Agreement

|                                  |  |                 |            |                   |  |         |            |  |  |  |          | 
|--------------------------------- |  | --------------- | ---------- | ----------------- |  | ------- | ---------- |  |  |  | -------- | 
|                                  |  | APPLICATION /   |            |                   |  |         |            |  | 
|TITLE                             |  | REGISTRATION NO |            | FILE / ISSUE DATE |  | COUNTRY
|                                  |  |                 |            |                   |  |        
|Halloween Costume
Warehouse       |  |                 | 78/140,220 |                   |  |         | 7/1/2002   |  |  |  | U.S.     | 
|Halloween Costume
Warehouse       |  |                 | 1,815,585  |                   |  |         | 1/4/1994   |  |  |  | U.S.     | 
|Halloween Witch Logo              |  |                 | 76/357,517 |                   |  |         | 1/11/2002  |  |  |  | U.S.     | 
|Inflation Station                 |  |                 | 76/309,702 |                   |  |         | 9/6/2001   |  |  |  | U.S.     | 
|Party City                        |  |                 | 1,806,095  |                   |  |         | 11/23/1993 |  |  |  | U.S.     | 
|Party City (logo)                 |  |                 | 1,553,347  |                   |  |         | 8/22/1989  |  |  |  | U.S.     | 
|Party City (logo)                 |  |                 | 1,811,298  |                   |  |         | 12/14/1993 |  |  |  | U.S.     | 
|The Discount
Halloween Superstore |  |                 | 78/133,433 |                   |  |         | 6/5/2002   |  |  |  | U.S.     | 
|The Discount Party
Superstore     |  |                 | 1,974,890  |                   |  |         | 5/21/1996  |  |  |  | U.S.     | 
|Your Celebration
Starts Here      |  |                 | 78/133,436 |                   |  |         | 6/5/2002   |  |  |  | U.S.     | 
|The Discount
Halloween Superstore |  |                 | 2504293    |                   |  |         | 9/19/2002  |  |  |  | Spain    | 
|The Discount Party
Superstore     |  |                 | 1,935,059  |                   |  |         | 7/5/1995   |  |  |  | Spain    | 
|Your Celebration
Starts Here      |  |                 | 2504295    |                   |  |         | 9/18/2002  |  |  |  | Spain    | 
|Party City                        |  |                 | 334321     |                   |  |         | 7/6/1999   |  |  |  | Portugal | 
|Halloween Witch Logo              |  |                 | 544717     |                   |  |         | 4/26/2002  |  |  |  | Mexico   | 
|Party City (color
logo)           |  |                 | 518,109    |                   |  |         | 2/28/1996  |  |  |  | Mexico   | 
|Party City (logo)                 |  |                 | 518108     |                   |  |         | 2/28/1996  |  |  |  | Mexico   | 
|Party City
(servicemark)          |  |                 | 496,512    |                   |  |         | 6/30/1996  |  |  |  | Mexico   | 
|Party City (trademark)            |  |                 | 508,809    |                   |  |         | 10/3/1995  |  |  |  | Mexico   | 





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|                                  |  |                 |             |                   |  |         |            |  |  |  |                | 
|--------------------------------- |  | --------------- | ----------- | ----------------- |  | ------- | ---------- |  |  |  | -------------- | 
|                                  |  | APPLICATION /   |             |                   |  |         |            |  |  | 
|TITLE                             |  | REGISTRATION NO |             | FILE / ISSUE DATE |  | COUNTRY
|                                  |  |                 |             |                   |  |        
|The Discount
Halloween Superstore |  |                 | 561433      |                   |  |         | 8/15/2002  |  |  |  | Mexico         | 
|The Discount Party
Superstore     |  |                 | 522866      |                   |  |         | 5/28/1996  |  |  |  | Mexico         | 
|Your Celebration
Starts Here      |  |                 | 561432      |                   |  |         | 8/16/2002  |  |  |  | Mexico         | 
|Party City                        |  |                 | 2158781     |                   |  |         | 6/16/2000  |  |  |  | Great Britain  | 
|Party City                        |  |                 | 2273522     |                   |  |         | 4/5/2002   |  |  |  | Great Britain  | 
|Party World                       |  |                 | 1 1,455,663 |                   |  |         | 2/13/1991  |  |  |  | Great Britain  | 
|Party World                       |  |                 | B 1,455,664 |                   |  |         | 2/13/1991  |  |  |  | Great Britain  | 
|Party World                       |  |                 | B 1,455,668 |                   |  |         | 2/13/1991  |  |  |  | Great Britain  | 
|Party City                        |  |                 | 835314      |                   |  |         | 6/27/2002  |  |  |  | European Mrkt. | 
|Halloween Witch Logo              |  |                 | 1135863     |                   |  |         | 3/28/2002  |  |  |  | Canada         | 
|Party City                        |  |                 | TMA 451,736 |                   |  |         | 12/15/1995 |  |  |  | Canada         | 
|Party City (color
logo)           |  |                 | TMA 457,894 |                   |  |         | 5/24/1995  |  |  |  | Canada         | 
|Party City (logo)                 |  |                 | TMA 451,735 |                   |  |         | 12/15/1995 |  |  |  | Canada         | 
|The Discount
Halloween Superstore |  |                 | 1148142     |                   |  |         | 7/26/2002  |  |  |  | Canada         | 
|The Discount Party
Superstore     |  |                 | 766,534     |                   |  |         | 10/19/1994 |  |  |  | Canada         | 
|Your Celebration
Starts Here      |  |                 | 1148143     |                   |  |         | 7/26/2002  |  |  |  | Canada         | 
|Party City                        |  |                 | 820961914   |                   |  |         | 5/22/2001  |  |  |  | Brazil         | 
|Party City                        |  |                 | 824681606   |                   |  |         | 6/26/2002  |  |  |  | Brazil         | 
|Party City (logo)                 |  |                 | 820961906   |                   |  |         | 5/22/2001  |  |  |  | Brazil         | 
|Party City                        |  |                 | 768811      |                   |  |         | 4/21/1999  |  |  |  | Australia      | 
|Party City (logo)                 |  |                 | 768812      |                   |  |         | 4/21/1999  |  |  |  | Australia      | 





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|                               |  |                 |               |                   |  |         |           |  |  |  |  | 
|------------------------------ |  | --------------- | ------------- | ----------------- |  | ------- | --------- |  |  |  |  | 
|                               |  |                 | APPLICATION / |                   |  |         |           |  |  |  | 
|TITLE                          |  | REGISTRATION NO |               | FILE / ISSUE DATE |  | COUNTRY
|                               |  |                 |               |                   |  |        
|YourCelebrationStarts Here.com |  |                 |               |                   |  |         | 8/12/2002 |  |  |