Document:

exv10w7

Exhibit 10.7

Amscan Inc. • 80 Grasslands Road • Elmsford, New York 10523 • (914) 345-2020

April 28, 1997

Mr. Michael A. Correale

27 Weeburn Lane

Wilton CT 06897

Dear Michael:

This letter will confirm our understanding regarding your employment with Amscan Holdings Inc. as
Corporate Controller. Your position will commence on May 12, 1997 at an annual salary of $125,000.
In addition to your base salary and your participation in Amscan’s generally available employee
benefit programs, you will also be entitled to an annual bonus of up to 50% of base salary and to
stock options under the Company’s stock incentive program, both of which are predicated upon
individual and Company performance and subject to approval by the Board of Directors of Amscan
Holdings Inc.

We have further agreed that in the event your employment with the Company is terminated by the
Company for any reason other than for cause you will be entitled to receive severance in an amount
equal to one years’ compensation at the rate of compensation in effect at the date of termination.

As I have mentioned before, we at Amscan are extremely excited that you are joining Amscan and am
confident that the experience and knowledge that you bring to Amscan will be of tremendous benefit
to our Company.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	  	/s/
Jim Harrison
 	 
	 	 	Jim Harrison  	 
	 	 	Chief Financial Officer 	 
	 

Everything in Decorations and Party Goodsexv10w8

Exhibit 10.8

Execution Copy

AMENDED AND RESTATED MANAGEMENT AGREEMENT

     This AMENDED AND RESTATED MANAGEMENT AGREEMENT (this
“Agreement”) is entered into as of November 10, 2006, by and among Berkshire Partners LLC, a
Massachusetts limited liability company, with a principal place of business at One Boston Place,
Boston, Massachusetts (“Berkshire” or a “Consultant”), Weston Presidio Service Company LLC, a
Delaware limited liability company, with a principal place of business at 200 Clarendon Street,
Boston, Massachusetts (“Weston Presidio” or a “Consultant,” and collectively with Berkshire, the
“Consultants”) and Amscan Holdings, Inc., a Delaware corporation (the “Company”). All terms not
otherwise defined herein have the meanings ascribed to them in the Merger Agreement by and among
the Company, AAH Holdings Corporation, a Delaware corporation (“Parent”) and AAH Acquisition
Corporation, a Delaware corporation (“AAH Acquisition”) (the “Merger Agreement”).

     WHEREAS, each Consultant has staff specially skilled in corporate finance, strategic planning,
and other management skills and services;

     WHEREAS, AAH Acquisition was merged with and into the Company in connection with the closing
(the “Closing”) under the Merger Agreement, with the Company being the surviving corporation;

     WHEREAS, prior to the date hereof, each Consultant has provided substantial consulting
services to the Company and its affiliates concerning their planning, structuring and financing in
connection with the transactions contemplated by the Merger Agreement, in particular, in connection
with the senior secured financing that was provided for the Merger pursuant to a Credit Agreement
dated on or about the date hereof (the “Senior Secured Debt”) with Goldman Sachs Credit Partners
L.P., as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent, J.P. Morgan Securities
Inc., as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent, and General Electric
Capital Corporation, as Administrative Agent and Collateral Agent, and the lending institutions
from time to time party thereto;

     WHEREAS, since the Closing, the Company has required and will continue to require each
Consultant’s special skills and management advisory services in connection with the general business
operations of the Company and its subsidiaries and affiliates; and

     WHEREAS, each Consultant is willing to continue to provide such skills and services to the
Company;

     WHEREAS, the parties to this Agreement entered into that certain Management Agreement (the
“Original Agreement”), dated as of April 30, 2004 (the “Commencement Date”); and

     WHEREAS, by execution of this Agreement, the parties to this Agreement desire to amend certain
provisions and restate in its entirety the Original Agreement;

 

     NOW, THEREFORE, in consideration of the mutual promises, the parties hereto do hereby agree as
follows:

     1. Engagement. The Company hereby engages each of the Consultants for the Term (as
hereinafter defined) and upon the terms and conditions herein set forth to provide consulting and
management advisory services to the Company. These services will be in the fields of financial and
strategic planning, arranging financing with banks and other financial institutions and such other
management areas as each Consultant and the Company shall mutually agree. In consideration of the
remuneration herein specified, each Consultant accepts such engagement and agrees to perform the
services specified herein.

     2. Term. The engagement hereunder shall be for a term commencing on the Commencement
Date and expiring on the fifth (5th) anniversary of the Commencement Date (the “Term”). Upon
expiration of the Term, this Agreement shall automatically extend for successive periods of one (1)
year, unless each Consultant (with respect to itself) or the Company shall give notice to the other
parties at least ninety (90) days prior to the end of the Term (or any annual extension thereof)
indicating that it does not intend to renew this Agreement. Any notice by the Company indicating
that it does not intend to renew this Agreement shall be with respect to both Consultants.

     3. Services to be Performed. Each Consultant shall devote such time and efforts to the
performance of the consulting and management advisory services contemplated by this Agreement as
such Consultant deems reasonably necessary or appropriate; provided, however, that no precise
number of hours is required to be devoted by the Consultants on a weekly or monthly basis. Each
Consultant may perform services under this Agreement directly, through its employees or agents, or,
with the approval of the Company, with such outside consultants as such Consultant may engage for
such purpose. The Company acknowledges that the Consultants’ services are not exclusive and that
each Consultant will render similar services to other persons and entities.

     4. Confidentiality. Each Consultant shall maintain the confidentiality of all
non-public information of the Company and its subsidiaries which may come into its possession as a
result of the performance of services under this Agreement, and shall be responsible for its
employees, agents and outside consultants engaged hereunder doing the same.

     5. Compensation; Expense Reimbursement. The Company hereby agrees to:

     (a) Pay to (i) Berkshire (or an affiliate of Berkshire designated by it) a fee in the amount
of $2 million, and (ii) to Weston Presidio (or an affiliate of Weston Presidio designated by it) a
fee in the amount of $1 million, each in connection with the structuring and negotiation of the
Senior Secured Debt, and reimburse each of the Consultants’ expenses incurred by it or on behalf of
the Company and its affiliates through the date of the Closing, such fees and expenses being
payable by the Company at the Closing.

     (b) During the Term, pay to the Consultants (or their respective designated affiliate) a
management fee in an amount of $1.25 million per annum in exchange for the services provided to the
Company by the Consultants as contemplated hereby, such fee being payable by the

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Company quarterly, in arrears, on the last business day of January, April, July and October, the
first such payment being made on July 30, 2004 and which shall be payable for the period from the
Closing Date through July 31, 2004; provided, that the annual fee specified in this clause (b)
shall not be paid, but shall accrue (together with interest thereon at rate of 8% per annum,
compounded quarterly, for the period from the date upon which payment would otherwise be due to the
date upon which payment is finally made), if and for so long as there is an event of default under
the indenture governing the Company’s 8.75% senior subordinated notes due 2014, provided that this
will not restrict payment for longer than 180 days from the occurrence of any particular event of
default. The fees payable pursuant to this clause (b) shall be allocated between Berkshire (or its
designee) and Weston Presidio (or its designee) in the same proportions as their respective
holdings of Common Stock, par value $.01 per share, of Parent (the “Common Stock”) by their
affiliates, as of the date such payment was earned for the period.

     (c) In each case for so long as it is receiving ongoing management fees pursuant to clause (b)
of this Section 5, each Consultant will also advise Parent and the Company in connection with
financing, acquisition and disposition transactions (however structured) involving Parent or any of
its direct or indirect subsidiaries, and the Company will pay to the Consultants (or their
respective designees, as the case may be) a fee for services rendered in connection with each such
transaction equal to up to one percent (1%) of the gross transaction value of such transaction,
such fee to be due and payable at the closing of such transaction; and such fee to be allocated
between Berkshire (or its designee) and Weston Presidio (or its designee) in the same proportions
as their respective holdings of Common Stock by their affiliates, as of the date of such subsequent
transaction.

     (d) Promptly reimburse the Consultants for all travel, lodging and other out-of-pocket costs
reasonably incurred by it in connection with or on account of its performance of the management
advisory services for the Company hereunder (other than those otherwise paid at the Closing
pursuant to clause (a) of this Section 5). In addition, if and to the extent that personnel
employed by a Consultant are placed on assignment at the Company in the capacity of an interim
management team member, then the company will reimburse such Consultant in an amount equal to the
compensation which would be paid to an outside party employed in such position, as mutually agreed
by the Company and such Consultant.

     6. Indemnification. In consideration of the execution and delivery of this Agreement
by each Consultant, the Company hereby agrees to indemnify, exonerate and hold the Consultants and
each of their respective members, managers, officers, fiduciaries, employees and agents in their
capacity as such (collectively, the “Indemnitees”) free and harmless from and against any and all
actions, causes of action, suits, losses, liabilities and damages, and expenses in connection
therewith, including without limitation reasonable attorneys’ fees and disbursements (collectively,
the “Indemnified Liabilities”), incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to the Closing under the Merger Agreement, the execution,
delivery, performance, enforcement or existence of this Agreement or the transactions or
services contemplated hereby, except for any such Indemnified Liabilities arising on account of
such Indemnitees gross negligence or willful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which
is permissible under applicable law, except for any such Indemnified Liabilities

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arising as a result of such Indemnitee’s gross negligence or willful misconduct. None of the
Indemnitees shall be liable to the Company or any of its affiliates for any act or omission
suffered or taken by such Indemnitee that does not constitute gross negligence or willful
misconduct.

     7. Freedom to Pursue Opportunities, Etc. In the event that any Consultant or any of
its officers, directors, members, managers, employees, partners, clients, affiliates and other
associated entities or individuals acquires knowledge of a potential transaction or matter that may
be a corporate opportunity, neither such Consultant nor any of its officers, directors, members,
managers, employees, partners, affiliates or associated entities or individuals shall have any duty
(contractual or otherwise) to communicate or present such corporate opportunity to the Company or
any of its affiliates and, notwithstanding any provision of this Agreement to the contrary, neither
such Consultant nor any of its officers, directors, members, managers, employees, partners,
affiliates or associated entities or individuals shall be liable to the Company or any of its
affiliates for breach of any duty (contractual or otherwise) by reason of the fact that such
Consultant directly or indirectly pursues or acquires such opportunity for itself, directs such
opportunity to another person, or does not present such opportunity to the Company or any of its
affiliates.

     8. Notice. All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand, sent by telecopy or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier service and shall
be deemed given when so delivered by hand or telecopied, or if mailed, seven (7) days after mailing
(or one business day after mailing in the case of express mail or overnight courier service), as
follows:

         (i)    If to Berkshire to:

Berkshire Partners LLC

One Boston Place

Boston, MA 02108

Facsimile: 617-227-6105

Attention: Mr. Robert J. Small

With a copy to:

Ropes & Gray

One International Place

Boston, MA 02110

Facsimile: 617-951-7050

Attention: David C. Chapin, Esq.

         (ii)   If to Weston Presidio to:

Weston Presidio Service Company LLC

200 Clarendon Street, 50th Floor

Boston, MA 02116

Facsimile: 617-988-2515

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Attention: Mr. Kevin Hayes

With a copy to:

Ropes & Gray

One International Place

Boston, MA 02110

Facsimile: 617-951-7050

Attention: David C. Chapin, Esq.

          (iii)    If to the Company to:

Amscan Holdings, Inc.

80 Grasslands Road

Elmsford, NY 10523

Attention: Mr. Gerald Rittenberg

     9. Modifications; Waiver. This Agreement constitutes the entire agreement between the
parties hereto with regard to the subject matter hereof, superseding all prior understandings and
agreements whether written or oral. This Agreement may not be amended or revised except by a
writing signed by the parties. No waiver on any one occasion shall extend to, effect or be
construed as a waiver of any right or remedy on any future occasion. No course of dealing of any
person nor any delay or omission in exercising any right or remedy shall constitute an amendment of
this Agreement or a waiver of any right or remedy of any party hereto.

     10. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, but may not be assigned by
either party without the prior written consent of the other.

     11. Headings. All headings and captions in this Agreement are for purposes of
reference only and shall not be construed to limit or affect the substance of this Agreement.

     12. Severability. It is the desire and intent of the parties that the provisions of
this Agreement be enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, the invalidity or
unenforceability of any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if the invalid or
unenforceable provision were omitted. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid or unenforceable in such jurisdiction, it shall, as to
such jurisdiction, be so more narrowly drawn, without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

     13. Governing Law. This Agreement shall be governed by the law of the State of
Delaware (regardless of the laws that might otherwise govern under applicable Delaware principles
of conflicts of law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.

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     14. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.

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     IN WITNESS WHEREOF, the parties have duly executed this Management Agreement as of the date
first above written.

	 	 	 	 	 
	 	BERKSHIRE PARTNERS LLC

 	 
	 	By:  	/s/ Robert J. Small
 	 
	 	 	Name:  	Robert J. Small 	 
	 	 	Title:  	Managing Director 	 
	 
	 	WESTON PRESIDIO SERVICE COMPANY LLC

 	 
	 	By:  	/s/ Kevin Hayes
 	 
	 	 	Name:  	Kevin Hayes 	 
	 	 	Title:  	General Partner 	 
	 
	 	AMSCAN HOLDINGS, INC.

 	 
	 	By:  	/s/ Michael A. Correale
 	 
	 	 	Name:  	Michael A. Correale 	 
	 	 	Title:  	Vice President

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