AGREEMENT SHALL BE AMENDED TO ADD
THE FOLLOWING SUBPARAGRAPHS:
"(D)
UNSECURED INDEBTEDNESS EVIDENCED BY THE
SELLER NOTE, WHICH SHALL AT ALL TIMES BE SUBJECT TO A SUBORDINATION AGREEMENT.
(F) UNSECURED INDEBTEDNESS EVIDENCED BY THE TRADE NOTE, WHICH SHALL AT ALL TIMES
BE SUBJECT TO A SUBORDINATION AGREEMENT;(G) UNSECURED INDEBTEDNESS EVIDENCED BY
ANY GUARANTY BY ANY BORROWER OF ANY INDEBTEDNESS OR OTHER OBLIGATIONS OF ANY
OTHER BORROWER THAT IS PERMITTED UNDER THIS AGREEMENT AND (H) OTHER UNSECURED
INDEBTEDNESS WHICH IS CONSENTED TO BY THE LENDER IN ITS SOLE DISCRETION
("ADDITIONAL SUBORDINATED DEBT")-AND WHICH IS AT ALL TIMES SUBJECT TO A
SUBORDINATION AGREEMENT."
5.
COVENANTS.
NEW SECTIONS 5-27 AND 5-28 SHALL BE ADDED TO THE LOAN
AGREEMENT, WHICH SHALL READ AS FOLLOWS:
"5-27.
THE BORROWERS SHALL NOT FAIL TO
EXERCISE THEIR OPTION TO TERM OUT AT LEAST APPROXIMATELY $1,150,000 IN CURRENT
TRADE PAYABLES OVER A THREE-YEAR TERM PURSUANT TO THE TERMS OF THE TRADE NOTE.
5-28.
NO PARTY TO THE SUPPLY AGREEMENT IS IN DEFAULT OR VIOLATION OF THE SUPPLY
AGREEMENT, AND THE SUPPLY AGREEMENT IS, AND SHALL AT ALL TIMES REMAIN, IN FULL
FORCE AND EFFECT
6.
EXHIBITS.
THE FOLLOWING EXHIBITS TO THE LOAN AGREEMENT ARE HEREBY
STRICKEN AND REPLACED BY THE CORRESPONDINGLY IDENTIFIED EXHIBITS ATTACHED
HERETO:
5-4 [LOCATIONS]; 5-9 [LEASES].
7.
EVENTS OF DEFAULT.
A NEW SECTION 10-19 SHALL BE ADDED TO THE LOAN
AGREEMENT WHICH SHALL READ AS FOLLOWS:
"10-19. SUBORDINATED INDEBTEDNESS.
(A)
THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT IN RESPECT OF ANY THE SELLER
NOTE, THE TERM NOTE (FOLLOWING EXECUTION AND DELIVERY THEREOF BY THE OBLIGOR
THEREUNDER TO AMSCAN, INC.) OR ANY ADDITIONAL SUBORDINATED DEBT, OR (B)
THE
OCCURRENCE OF ANY BREACH OF ANY SUBORDINATION AGREEMENT BY ANY PARTY THERETO.
8.
ACKNOWLEDGEMENT OF LIABILITIES BY BORROWER.
THE BORROWERS CONFIRM AND
AGREE THAT (A) ALL REPRESENTATIONS AND WARRANTIES CONTAINED IN THE LOAN
AGREEMENT AND IN THE OTHER LOAN DOCUMENTS ARE ON THE DATE HEREOF TRUE AND
CORRECT IN ALL MATERIAL RESPECTS, AND (B) IT IS UNCONDITIONALLY LIABLE FOR THE
PUNCTUAL AND FULL PAYMENT OF ALL LIABILITIES, INCLUDING, WITHOUT LIMITATION, ALL
REASONABLE CHARGES, FEES, EXPENSES AND COSTS (INCLUDING ATTORNEYS' FEES AND
EXPENSES) UNDER THE LOAN DOCUMENTS, AND THAT THE BORROWERS HAVE NO DEFENSES,
COUNTERCLAIMS OR SETOFFS WITH RESPECT TO FULL, COMPLETE AND TIMELY PAYMENT OF
ALL LIABILITIES.
9.
RATIFICATION OF FINANCING.
THE BORROWERS CONFIRM THAT THE LOAN AGREEMENT
AND THE LOAN DOCUMENTS REMAIN IN FULL FORCE AND EFFECT WITHOUT AMENDMENT OR
MODIFICATION OF ANY KIND, EXCEPT FOR THE AMENDMENTS EXPLICITLY SET FORTH
HEREIN.
THIS AMENDMENT SHALL BE DEEMED TO BE ONE OF THE LOAN DOCUMENTS AND,
TOGETHER WITH THE OTHER LOAN DOCUMENTS, CONSTITUTE THE ENTIRE
3
AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND
SUPERSEDES ALL PRIOR DEALINGS, CORRESPONDENCE, CONVERSATIONS OR COMMUNICATIONS
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.
THIS AMENDMENT
SHALL BE CONSIDERED A LOAN DOCUMENT AND, WITHOUT IN ANY WAY LIMITING THE
APPLICATION OF OTHER PROVISIONS OF THE LOAN AGREEMENT, THIS AMENDMENT SHALL
GOVERNED BY THE PROVISIONS