-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, InRjwpqwJ2tIj3QIWSig7eyAucGLKcOYEIPWdelfPqfOLFTtYOFwxy4BxS3bb38A X1etrx1iBSRGkqSs05pUPw== 0000936392-00-000045.txt : 20000202 0000936392-00-000045.hdr.sgml : 20000202 ACCESSION NUMBER: 0000936392-00-000045 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000121 GROUP MEMBERS: MICHAEL E. TENNENBAUM GROUP MEMBERS: SPECIAL VALUE BOND FUND, LLC GROUP MEMBERS: SPECIAL VALUE INVESTMENT MANAGEMENT, LLC GROUP MEMBERS: SVIM/MSM, LLC GROUP MEMBERS: TENNENBAUM & CO LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PARTY CITY CORP CENTRAL INDEX KEY: 0001005972 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 223033692 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-48035 FILM NUMBER: 511339 BUSINESS ADDRESS: STREET 1: 450 COMMONS WAY STREET 2: BLDG C CITY: ROCKAWAY STATE: NJ ZIP: 07860 BUSINESS PHONE: 9739830888 MAIL ADDRESS: STREET 1: 400 COMMONS WAY STREET 2: 400 COMMONS WAY CITY: ROCKAWAY STATE: NJ ZIP: 07866 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TENNENBAUM & CO LLC CENTRAL INDEX KEY: 0001018962 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 954587347 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1999 AVENUE OF THE STARS STREET 2: 32ND FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90067-6100 BUSINESS PHONE: 3102017882 MAIL ADDRESS: STREET 1: 1999 AVENUE OF THE STARS CITY: LOS ANGELES STATE: CA ZIP: 90067-6100 SC 13D/A 1 AMENDMENT NO. 2 TO SCHEDULE 13D 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT NO. 2)(1) PARTY CITY CORPORATION - -------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $.01 PER SHARE - -------------------------------------------------------------------------------- (Title of Class of Securities) 702145103 - -------------------------------------------------------------------------------- (CUSIP Number) SPECIAL VALUE BOND FUND, LLC C/O TENNENBAUM & CO., LLC 11100 SANTA MONICA BOULEVARD, SUITE 210 LOS ANGELES, CALIFORNIA 90025 (310) 566-1000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JANUARY 14, 2000 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: [ ]. (Continued on the following pages) Page 1 of 10 Pages (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. 2 SCHEDULE 13D CUSIP NO. 702145103 PAGE 2 OF 10 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) SPECIAL VALUE BOND FUND, LLC IRS NO.: 95-4758920 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,096,000 SHARES(1) OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON ---------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- (1) SHARES ARE ISSUABLE UPON EXERCISE OF THE WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW). (2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF JANUARY 14, 2000, AS REPRESENTED BY PARTY CITY CORPORATION IN THE FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (DESCRIBED IN ITEMS 3 AND 5 BELOW) AND COMPUTED IN ACCORDANCE WITH RULE 13d-3(d)(1). *SEE INSTRUCTIONS BEFORE FILLING OUT! 3 SCHEDULE 13D CUSIP NO. 702145103 PAGE 3 OF 10 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) SVIM/MSM,LLC IRS NO.: 95-4760193 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,096,000 SHARES(1) OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON ---------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- (1) SHARES ARE ISSUABLE UPON EXERCISE OF THE WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW). (2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF JANUARY 14, 2000, AS REPRESENTED BY PARTY CITY CORPORATION IN THE FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (DESCRIBED IN ITEMS 3 AND 5 BELOW) AND COMPUTED IN ACCORDANCE WITH RULE 13d-3(d)(1). *SEE INSTRUCTIONS BEFORE FILLING OUT! 4 SCHEDULE 13D CUSIP NO. 702145103 PAGE 4 OF 10 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) SPECIAL VALUE INVESTMENT MANAGEMENT, LLC IRS NO.: 95-4759860 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,096,000 SHARES(1) OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON ---------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- (1) SHARES ARE ISSUABLE UPON EXERCISE OF THE WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW). (2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF JANUARY 14, 2000, AS REPRESENTED BY PARTY CITY CORPORATION IN THE FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (DESCRIBED IN ITEMS 3 AND 5 BELOW) AND COMPUTED IN ACCORDANCE WITH RULE 13d-3(d)(1). *SEE INSTRUCTIONS BEFORE FILLING OUT! 5 SCHEDULE 13D CUSIP NO. 702145103 PAGE 5 OF 10 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) TENNENBAUM & CO., LLC IRS NO.: 95-4587347 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,096,000 SHARES(1) OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON ---------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- (1) SHARES ARE ISSUABLE UPON EXERCISE OF THE WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW). (2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF JANUARY 14, 2000, AS REPRESENTED BY PARTY CITY CORPORATION IN THE FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (DESCRIBED IN ITEMS 3 AND 5 BELOW) AND COMPUTED IN ACCORDANCE WITH RULE 13d-3(d)(1). *SEE INSTRUCTIONS BEFORE FILLING OUT! 6 SCHEDULE 13D CUSIP NO. 702145103 PAGE 6 OF 10 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) MICHAEL E. TENNENBAUM S.S. NO.: ###-##-#### - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF ---------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,096,000 SHARES(1) OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON ---------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,096,000 SHARES(1) - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6%(2) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- (1) SHARES ARE ISSUABLE UPON EXERCISE OF THE WARRANT (DESCRIBED IN ITEMS 3 AND 4 BELOW). (2) BASED ON 12,722,205 SHARES OF COMMON STOCK OUTSTANDING AS OF JANUARY 14, 2000, AS REPRESENTED BY PARTY CITY CORPORATION IN THE FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT (DESCRIBED IN ITEMS 3 AND 5 BELOW) AND COMPUTED IN ACCORDANCE WITH RULE 13d-3(d)(1). *SEE INSTRUCTIONS BEFORE FILLING OUT! 7 PAGE 7 OF 10 This Amendment No. 2 to Schedule 13D relating to Party City Corporation, a Delaware corporation ("Party City"), is being filed on behalf of the undersigned to amend the Schedule 13D filed with the Commission on August 26, 1999, as amended by Amendment No. 1 thereto filed with the Commission on September 13, 1999 (together, the "Schedule 13D"). Terms defined in the Schedule 13D and not otherwise defined herein have the same meaning herein as in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The information in Item 3 is hereby amended and restated as follows: The statement relates to the acquisition by the Reporting Persons of a warrant dated as of August 16, 1999, as amended on January 14, 2000 (the "Warrant"), to purchase 3,096,000 shares of Common Stock of Party City. Party City issued the Warrant pursuant to that certain Securities Purchase Agreement between Party City and TCO dated as of August 16, 1999 (the "Securities Purchase Agreement") as amended by that certain First Amendment to Securities Purchase Agreement dated as of January 14, 2000 (the "Amendment"). The Warrant was acquired by TCO along with certain secured notes of Party City in the aggregate principal amount of $6,750,000. The aggregate purchase price for the Warrant and such secured notes from Party City was $6,750,000. The source of funds for the purchase of the Warrant and the secured notes by TCO was a margin account of the Reporting Persons with Jefferies & Company, Inc. On September 1, 1999, SVBF purchased the Warrant and the secured notes from TCO for aggregate consideration of $6,750,000. The source of funds for the purchase of the Warrant and the secured notes from TCO was the working capital of SVBF. Upon exercise of the Warrant in full, SVBF must pay an exercise price of $1.07 per share for an aggregate exercise price of $3,312,720. It is presently anticipated that the source of funds for the exercise price will be SVBF's general working capital or the working capital of an affiliate. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The information in Item 5 is hereby amended and restated as follows: The shares of Common Stock identified in Item 1 issuable upon exercise of the Warrant constitute approximately 19.6% of the outstanding Common Stock of Party City, based upon 12,722,205 shares of Common Stock outstanding as of January 14, 2000, as represented by Party City Corporation in the Amendment, and computed in accordance with Rule 13d-3(d)(1). Upon exercise of the Warrant, SVBF will have the sole power of voting and disposition with respect to the shares of Common Stock issuable upon such exercise. By reason of (i) Mr. Tennenbaum's position as managing member of TCO, (ii) TCO's position as managing member of SVIM/MSM and SVIM, (iii) SVIM/MSM's position as managing member of SVBF and (iv) SVIM's position as investment advisor to SVBF, each of Mr. Tennenbaum, TCO, SVIM/MSM and SVIM may be deemed to share such powers of voting and disposition. Except as described in this statement, the Reporting Persons have not effected transactions in Party City's Common Stock within 60 days prior to the date of this statement. 8 PAGE 8 OF 10 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The information in Item 6 is hereby amended and restated as follows: On January 14, 2000, Party City, SVBF, Enhanced Retail Funding, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P., TCO/Party City, LLC, Clyde Street Investment, LLC and Richmond Associates, L.P., entered into the Amendment which, among other things, provided for the amendment of the Warrant and Party City's other warrants issued under the Agreement. Except for the Warrant, the Securities Purchase Agreement, the Amendment, the Investor Rights Agreement and related documents executed in connection therewith, to the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Persons and any other person with respect to any securities of Party City, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Copies of the form of Warrant and the Amendment have been filed as exhibits to Party City's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 20, 2000 (File No. 0-27826) and are incorporated by reference herein. Copies of the form of Securities Purchase Agreement and Investor Rights Agreement have been filed as exhibits to Party City's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 25, 1999 (File No. 0-27826) and are incorporated by reference herein. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. The information in Item 7 is hereby amended and restated as follows: Exhibit 1 Joint Filing Agreement Exhibit 2 Form of Amended and Restated Warrant, dated January 14, 2000, of Party City Corporation, incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 20, 2000 (File No. 0-27826). Exhibit 3 Form of Securities Purchase Agreement, dated August 16, 1999 by and between Party City Corporation and Tennenbaum & Co., LLC., incorporated herein by reference to Exhibit 4.6 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on August 25, 1999 (File No. 0-27826). 9 PAGE 9 OF 10 Exhibit 4 First Amendment to Securities Purchase Agreement, dated January 14, 2000 by and among Party City Corporation, Special Value Bond Fund, LLC, Enhanced Retail Funding, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P., TCO/Party City, LLC, Clyde Street Investment, LLC and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.3 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 20, 2000 (File No. 0-27826). Exhibit 5 Investor Rights Agreement, dated August 16, 1999 by and between Party City Corporation, Tennenbaum & Co., LLC, TCO/Party City, LLC, Enhanced Retail Funding, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P., and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on August 25, 1999 (File No. 0-27826). 10 PAGE 10 OF 10 SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: January 21, 2000 SPECIAL VALUE BOND FUND, LLC By: SVIM/MSM, LLC, its Managing Member By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ------------------------------ Michael E. Tennenbaum, its Managing Member SVIM/MSM, LLC By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ----------------------------------- Michael E. Tennenbaum, its Managing Member Special Value Investment MANAGEMENT, LLC By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ----------------------------------- Michael E. Tennenbaum, its Managing Member TENNENBAUM & CO., LLC By: /s/ Michael E. Tennenbaum --------------------------------------- Michael E. Tennenbaum, its Managing Member /s/ Michael E. Tennenbaum -------------------------------------------- MICHAEL E. TENNENBAUM 11 EXHIBIT INDEX Exhibit 1 Joint Filing Agreement Exhibit 2 Form of Amended and Restated Warrant, dated January 14, 2000, of Party City Corporation, incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 20, 2000 (File No. 0-27826). Exhibit 3 Form of Securities Purchase Agreement, dated August 16, 1999 by and between Party City Corporation and Tennenbaum & Co., LLC., incorporated herein by reference to Exhibit 4.6 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on August 25, 1999 (File No. 0-27826). Exhibit 4 First Amendment to Securities Purchase Agreement, dated January 14, 2000 by and among Party City Corporation, Special Value Bond Fund, LLC, Enhanced Retail Funding, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P., TCO/Party City, LLC, Clyde Street Investment, LLC and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.3 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 20, 2000 (File No. 0-27826). Exhibit 5 Investor Rights Agreement, dated August 16, 1999 by and between Party City Corporation, Tennenbaum & Co., LLC, TCO/Party City, LLC, Enhanced Retail Funding, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners L.P., and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on August 25, 1999 (File No. 0-27826). EX-1 2 EXHIBIT 1 1 Exhibit 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) of the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them Amendment No. 2 to Statement on Schedule 13D (including any and all further amendments thereto) with respect to the Common Stock, par value $.01 per share, of Party City Corporation, and further agree that this Agreement shall be included as an Exhibit to such joint filing. The undersigned further agree that each party hereto is responsible for timely filing of such Statement on Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning such party contained therein; provided that no party is responsible for the completeness or accuracy of the information concerning the other party, unless such party knows or has reason to believe that such information is inaccurate. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument, but all of such counterparts together shall constitute but one agreement. In evidence thereof the undersigned, being duly authorized, hereby execute this agreement this 21st day of January, 2000. SPECIAL VALUE BOND FUND, LLC By: SVIM/MSM, LLC, its Managing Member By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ------------------------------ Michael E. Tennenbaum, its Managing Member SVIM/MSM, LLC By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ----------------------------------- Michael E. Tennenbaum, its Managing Member Special Value Investment MANAGEMENT, LLC By: Tennenbaum & Co., LLC, its Managing Member By: /s/ Michael E. Tennenbaum ----------------------------------- Michael E. Tennenbaum, its Managing Member TENNENBAUM & CO., LLC By: /s/ Michael E. Tennenbaum --------------------------------------- Michael E. Tennenbaum, its Managing Member /s/ Michael E. Tennenbaum -------------------------------------------- MICHAEL E. TENNENBAUM -----END PRIVACY-ENHANCED MESSAGE-----