-----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, OahJU4GnctzJJtcuRuBtT84C5j9C9bW9J4uJmZC72klRsIYSeVjMV43jPNa0oO+O gN8zoByoR2kAe+nJgSM6Gw== 0000950123-02-006183.txt : 20020614 0000950123-02-006183.hdr.sgml : 20020614 20020614080205 ACCESSION NUMBER: 0000950123-02-006183 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020614 GROUP MEMBERS: GOLDMAN SACHS & CO 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: 1934 Act SEC FILE NUMBER: 005-48035 FILM NUMBER: 02678733 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 CITY: ROCKAWAY STATE: NJ ZIP: 07866 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP INC/ CENTRAL INDEX KEY: 0000886982 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 134019460 STATE OF INCORPORATION: DE FISCAL YEAR END: 1129 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D/A 1 y61538sc13dza.txt AMENDMENT NO. 1 TO SCHEDULE 13D 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. 1 PARTY CITY CORPORATION (Name of Issuer) COMMON STOCK, PAR VALUE $.01 PER SHARE (Title of Class of Securities) 702145103 (CUSIP Number) STEVE M. CHAIKEN GOLDMAN, SACHS & CO. CENTRAL COMPLIANCE 85 BROAD ST., 12TH FL. NEW YORK, NY 10004 (212) 902-7196 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) JUNE 12, 2002 (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) CUSIP NO. 702145103 Schedule 13D Page 2 of 10 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Goldman, Sachs & Co. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [X] 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York 7 SOLE VOTING POWER NUMBER OF 0 SHARES ------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 0 BY EACH ------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------- 10 SHARED DISPOSITIVE POWER 0 ------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% 14 TYPE OF REPORTING PERSON* BD - PN - IA CUSIP NO. 702145103 Schedule 13D Page 3 of 10 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) The Goldman Sachs Group, Inc. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* AF 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 0 SHARES ------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED 0 BY EACH ------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 0 WITH ------------------------------------- 10 SHARED DISPOSITIVE POWER 0 ------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0% 14 TYPE OF REPORTING PERSON* HC - CO CUSIP NO. 702145103 Schedule 13D Page 4 of 10 This Amendment No. 1 to Schedule 13D amends and restates in its entirety such Schedule 13D. This Amendment No. 1 is being filed because on June 12, 2002, Goldman, Sachs & Co. acquired 2,669,720 shares of Common Stock (as defined below) pursuant to the exercise of the Warrant described in Item 3, and sold such shares to Special Value Absolute Return Fund, LLC pursuant to the Purchase Agreement described in Item 3. Item 1. Security and Issuer. This Amendment No. 1 to Schedule 13D relates to the Common Stock, par value $.01 per share ("Common Stock"), of Party City Corporation, a Delaware corporation ("Party City"). The principal executive offices of Party City are located at 400 Commons Way, Rockaway, New Jersey 07866. Item 2. Identity and Background. Goldman, Sachs & Co. ("Goldman Sachs"), a New York limited partnership, is an investment banking firm and a member of the New York Stock Exchange, Inc. and other national exchanges. Goldman Sachs is a wholly owned direct and indirect subsidiary of The Goldman Sachs Group, Inc. ("GS Group" and, together with Goldman Sachs, the "Reporting Persons").(1) GS Group is a Delaware corporation and a holding company that (directly or indirectly through subsidiaries or affiliated companies or both) is a leading investment banking organization. The principal business address of each Reporting Person is 85 Broad Street, New York, NY 10004. The name, business address, present principal occupation or employment and citizenship of each director of GS Group are set forth in Schedule I hereto, and are incorporated herein by reference. During the last five years, none of the Reporting Persons, or, to the knowledge of each of the Reporting Persons, any of the persons listed on Schedule I hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) except as set forth in Schedule II hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. The Reporting Persons have entered into a Joint Filing Agreement, dated as of June 13, 2002, a copy of which is attached as an exhibit hereto. Item 3. Source and Amount of Funds or Other Consideration. On August 16, 1999, Goldman Sachs acquired a warrant (the "Warrant") to purchase 2,867,000 shares of Common Stock of Party City for $3.00 per share. Party City issued the Warrant pursuant to the Securities Purchase Agreement between Party City and Goldman Sachs dated as of August 16, 1999, which was amended by the first amendment thereto, dated January 14, 2000, and the second amendment thereto, dated April 1, 2001 (as so amended, the "Securities Purchase Agreement"). The Warrant was acquired by Goldman Sachs in connection with the purchase by Goldman Sachs Credit Partners L.P. ("GSCP"), an affiliate of Goldman Sachs, of certain secured notes of Party City in the aggregate principal amount of $6,250,000. The aggregate purchase price for the Warrant and such secured notes was $6,250,000. The source of funds for the purchase of the secured notes was GSCP's general working capital. On June 12, 2002, Goldman Sachs exercised the Warrant in full. The Warrant was exercised on a net basis in accordance with the terms thereof, and upon exercise Goldman Sachs acquired 2,669,720 shares of Common Stock. No funds were used by either Reporting Person to effect this exercise. These shares were immediately sold to Special Value Absolute Return Fund, LLC ("SVARF") pursuant to the purchase agreement, dated June 12, 2002 (the "Purchase Agreement"), between Goldman Sachs and SVARF, for a purchase price of $13.25 per share. - -------- (1) Neither the present filing nor anything contained herein shall be construed as an admission that any Reporting Person constitutes a "person" for any purposes other than Section 13(d) of the Securities Exchange Act of 1934. CUSIP NO. 702145103 Schedule 13D Page 5 of 10 Item 4. Purpose of Transaction. Goldman Sachs acquired the Warrant for investment purposes and exercised the Warrant in order to effect the immediate sale of the Common Stock to SVARF. The Reporting Persons have no plans or proposals that relate to or would result in any of the matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of Schedule 13D. The Reporting Persons, however, may at any time and from time to time, review or reconsider their position with respect to any of such matters. Party City, Party City's Chairman and Chief Executive Officer, Goldman Sachs, GSCP and certain other purchasers of secured notes and/or warrants of Party City entered into an Investor Rights Agreement dated as of August 16, 1999, which was amended by the first amendment thereto, dated October 11, 2000, and the second amendment thereto, dated November 20, 2000 (as so amended, the "Investor Rights Agreement"), pursuant to which a nominee of Goldman Sachs and certain other purchasers became a director of Party City. As a result of the sale pursuant to the Purchase Agreement, the rights and obligations of Goldman Sachs under the Investor Rights Agreement (including any right to board representation) were terminated under the terms thereof. The foregoing descriptions of the Warrant, the Securities Purchase Agreement, the Investor Rights Agreement and the Purchase Agreement are qualified their entirety by reference to the form of Warrant, form of Securities Purchase Agreement, Investor Rights Agreement and Purchase Agreement, copies of which are filed or incorporated by reference as exhibits hereto. Item 5. Interest in Securities of the Issuer. (a) After the completion of the sale pursuant to the Purchase Agreement, neither Reporting Person beneficially owned any shares of Common Stock. To the knowledge of each of the Reporting Persons, none of the persons listed on Schedule I hereto beneficially owns any shares of Common Stock.(2) (b) Not applicable. (c) Except as described in this Amendment No. 1 to Schedule 13D, no transactions in the Common Stock were effected by the Reporting Persons, or, to their knowledge, any of the persons listed on Schedule I hereto, during the sixty days prior to the date of this statement. (d) Not applicable. (e) On June 12, 2002, the Reporting Persons ceased to be the beneficial owners of more than five percent of the Common Stock outstanding. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Except for the Purchase Agreement, and related documents executed in connection therewith, none of the Reporting Persons or, to the knowledge of the Reporting Persons, any of the persons listed on Schedule I hereto, is a party to any contract, arrangement, understanding or relationship (legal or otherwise) 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. - -------- (2) In accordance with Securities and Exchange Commission ("SEC") Release No. 34-39538 (January 12, 1998), this filing reflects the securities beneficially owned by the investment banking division ("IBD") of The Goldman Sachs Group, Inc. and its subsidiaries and affiliates (collectively, "GSG"). This filing does not reflect securities, if any, beneficially owned by any other operating unit of GSG. IBD disclaims beneficial ownership of the securities beneficially owned by (i) any client accounts with respect to which IBD or its employees have voting or investment discretion, or both and (ii) certain investment entities of which IBD is the general partner, managing general partner or other manager, to the extent interests in such entities are held by persons other than IBD. CUSIP NO. 702145103 Schedule 13D Page 6 of 10 As a result of the exercise of the Warrant and the sale pursuant to the Purchase Agreement, the rights and obligations of Goldman Sachs under the Warrant, the Securities Purchase Agreement and the Investor Rights Agreement were terminated under the terms thereof. Copies of the form of Warrant, form of Securities Purchase Agreement, Investor Rights Agreement and Purchase Agreement have been filed or incorporated by reference as exhibits hereto. Item 7. Material to be Filed as Exhibits. Exhibit 99.1 Form of Warrant, dated August 16, 1999, 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 August 25, 1999 (File No. 0-27826). Exhibit 99.2 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). Exhibit 99.3 First Amendment to Investor Rights Agreement, dated as of October 11, 2000, by and among Party City Corporation, Jack Futterman, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Special Value Investment Management, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). Exhibit 99.4 Second Amendment to Investor Rights Agreement, dated as of November 20, 2000, by and among Party City Corporation, Jack Futterman, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Special Value Investment Management, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). Exhibit 99.5 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 99.6 First Amendment to Securities Purchase Agreement, dated January 14, 2000, by and among Party City Corporation, Special Value Bond Fund, LLC, TCO/Party, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.3 to the Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 19, 2000 (File No. 0-27826). Exhibit 99.7 Second Amendment to Securities Purchase Agreement, dated April 1, 2001, by and among Party City Corporation, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.10 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). CUSIP NO. 702145103 Schedule 13D Page 7 of 10 Exhibit 99.8 Purchase Agreement, dated June 12, 2002, between Special Value Absolute Return Fund, LLC and Goldman, Sachs & Co. Exhibit 99.9 Joint Filing Agreement, dated June 13, 2002, between Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. Exhibit 99.10 Power of Attorney, dated December 8, 2000, relating to Goldman, Sachs & Co. Exhibit 99.11 Power of Attorney, dated December 8, 2000, relating to The Goldman Sachs Group, Inc. CUSIP NO. 702145103 Schedule 13D Page 8 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: June 13, 2002 GOLDMAN, SACHS & CO. By:/s/ Roger S. Begelman -------------------------------- Name: Roger S. Begelman Title: Attorney-in-Fact 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: June 13, 2002 THE GOLDMAN SACHS GROUP, INC. By:/s/ Roger S. Begelman -------------------------------- Name: Roger S. Begelman Title: Attorney-in-Fact CUSIP NO. 702145103 Schedule 13D Page 9 of 10 SCHEDULE I The name of each director of The Goldman Sachs Group, Inc. is set forth below. The business address of each person listed below is c/o Goldman, Sachs & Co., 85 Broad Street, New York, NY 10004. Each person is a citizen of the United States of America except for Lord Browne of Madingley, who is a citizen of the United Kingdom. The present principal occupation or employment of each of the listed persons is set forth below.
Name Present Principal Occupation - ---- ---------------------------- Henry M. Paulson, Jr. Chairman and Chief Executive Officer of The Goldman Sachs Group, Inc. Robert J. Hurst Vice Chairman of The Goldman Sachs Group, Inc. John A. Thain President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. John L. Thornton President and Co-Chief Operating Officer of The Goldman Sachs Group, Inc. Lord Browne of Madingley Group Chief Executive of BP Amoco plc James A. Johnson Chairman and Chief Executive Officer of Johnson Capital Partners John H. Bryan Chairman of Sara Lee Corporation Ruth J. Simmons President of Brown University Margaret C. Whitman President and Chief Executive Officer of eBay, Inc. Morris Chang Chairman of Taiwan Semiconductor Stephen Friedman Senior Principal of MMC Capital
CUSIP NO. 702145103 Schedule 13D Page 10 of 10 SCHEDULE II On April 6, 2000, in connection with an industry-wide investigation by the Securities and Exchange Commission (the "SEC") relating to the pricing of government securities in advance refunding transactions, Goldman, Sachs & Co. (the "Firm") joined in a global settlement resolving the SEC investigation as well as a related qui tam lawsuit purportedly brought on behalf of the United States entitled United States ex rel. Lissack v. Goldman, Sachs & Co., et al., 95 Civ. 1363 (S.D.N.Y.)(BSJ). Pursuant to the settlement, without admitting or denying the findings, the Firm consented to the issuance of an SEC administrative order (SEA Rel. No. 42640) which, among other things, found that the Firm had violated Sections 17(a)(2) and (3) of the Securities Act of 1933 in connection with such pricing of government securities, required the Firm to cease and desist from violating such provisions, and ordered the Firm to make payments totaling approximately $5.1 Million to the U.S. Treasury and $104,000 to two municipalities. Under the global settlement, the qui tam lawsuit was dismissed with prejudice, and the Internal Revenue Service agreed not to challenge the tax-free nature of the refundings by virtue of the pricing of such securities. INDEX TO EXHIBITS
Exhibit No. Exhibit - ----------- ------- 99.1 Form of Warrant, dated August 16, 1999, 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 August 25, 1999 (File No. 0-27826). 99.2 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). 99.3 First Amendment to Investor Rights Agreement, dated as of October 11, 2000, by and among Party City Corporation, Jack Futterman, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Special Value Investment Management, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). 99.4 Second Amendment to Investor Rights Agreement, dated as of November 20, 2000, by and among Party City Corporation, Jack Futterman, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Special Value Investment Management, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 10.10 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). 99.5 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). 99.6 First Amendment to Securities Purchase Agreement, dated January 14, 2000, by and among Party City Corporation, Special Value Bond Fund, LLC, TCO/Party, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.3 to the Current Report on Form 8-K of Party City Corporation filed with the Securities and Exchange Commission on January 19, 2000 (File No. 0-27826). 99.7 Second Amendment to Securities Purchase Agreement, dated April 1, 2001, by and among Party City Corporation, Special Value Bond Fund, LLC, Special Value Bond Fund II, LLC, Goldman, Sachs & Co., Goldman Sachs Credit Partners, L.P., Enhanced Retail Funding, LLC, Clyde Street Investment, LLC, and Richmond Associates, L.P., incorporated herein by reference to Exhibit 4.10 to the Quarterly Report on Form 10-Q of Party City Corporation for the quarterly period ended March 31, 2001 (File No. 0-27826). 99.8 Purchase Agreement, dated June 12, 2002, between Special Value Absolute Return Fund, LLC and Goldman, Sachs & Co. 99.9 Joint Filing Agreement, dated June 13, 2002, between Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. 99.10 Power of Attorney, dated December 8, 2000, relating to Goldman, Sachs & Co. 99.11 Power of Attorney, dated December 8, 2000, relating to The Goldman Sachs Group, Inc.
EX-99.8 3 y61538exv99w8.txt PURCHASE AGREEMENT Exhibit 99.8 June 12, 2002 Special Value Absolute Return Fund, LLC 11100 Santa Monica Boulevard, Suite 210 Los Angeles, CA 90025 Dear Sirs: This letter will confirm the terms pursuant to which Special Value Absolute Return Fund, LLC (the "Purchaser") will purchase from Goldman, Sachs & Co. ("Goldman Sachs"), and Goldman Sachs will sell to the Purchaser, the shares of common stock, par value $.01 per share (the "Shares"), of Party City Corporation, a Delaware corporation (the "Company"), to be issued upon the net exercise by Goldman Sachs of a warrant (No. W-3, the "Warrant") issued by the Company to purchase 2,867,000 shares of the Company's common stock. The closing of the purchase and sale of the Shares shall occur on the business day after the funding of the Purchaser (which funding Purchaser currently expects to occur on or about June 12, 2002) or as soon thereafter as practicable. Purchaser shall give written notice to Goldman Sachs on the business day of the funding of the Purchaser, which shall serve as an irrevocable instruction to Goldman Sachs to take the action specified in paragraph 2 below on the closing date. In order to effect the purchase and sale of the Shares, Purchaser and Goldman Sachs agree to take the following actions on the closing date: 1. Purchaser and Goldman Sachs shall confirm with the Company the exact number of Shares to be issued upon exercise of the Warrant in full on a net exercise basis pursuant to Section 1.2 of the Warrant. 2. Goldman Sachs shall exercise the Warrant in full on a net exercise basis by surrender of the Warrant to the Company, together with a completed Notice of Exercise in the form attached as Exhibit A hereto, pursuant to which the Shares issuable upon net exercise of the Warrant will be issued in the name of, and delivered by the Company to, the Purchaser. 3. Purchaser shall effect a wire transfer of immediately available funds to an account designated by Goldman Sachs concurrent with the delivery by Goldman Sachs of the Warrant to the Company as specified in paragraph 2 above in the amount of the aggregate purchase price of the Shares at a purchase price per Share of $13.25. 4. Goldman Sachs shall execute (and cause Goldman Sachs Credit Partners, L.P. to execute) and deliver to Purchaser the Waiver and Consent in the form attached as Exhibit B hereto. The sale of the Shares shall also represent and effect the assignment by Goldman Sachs to Purchaser of the registration rights and all other rights with respect to the Shares set forth in that certain Investor Rights Agreement dated August 16, 1999, as amended, by and among the Company and the investors named therein. Purchaser and Goldman Sachs shall also take all other appropriate action and execute all documents, instruments or conveyances of any kind, which may be reasonably necessary or advisable to effectuate the purchase and sale of the Shares, provided that after the closing the Purchaser and Goldman Sachs shall not be required to incur any out of pocket expenses in connection therewith. By agreeing to purchase the Shares and by purchasing the Shares, Purchaser represents and warrants to, and agrees with, Goldman Sachs and its affiliates that: 1. The Purchaser is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended, (the "Securities Act") and has full power and authority to make the representations, warranties and agreements in this letter. 2. The Purchaser is acquiring the Shares for investment purposes and not with a view to any distribution of the Shares in violation of the Securities Act. 3. The Purchaser is aware, and has been advised, that (a) the sale of the Shares to the Purchaser is being made in a transaction not involving a public offering of securities in the United States and (b) the Shares will be "restricted securities" within the meaning of Rule 144 ("Rule 144") under the Securities Act; and (c) that the Shares contain the following legend: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE ENCUMBERED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS UNLESS, IN EACH CASE, VALIDLY EXEMPT THEREFROM, OR PURSUANT TO AN OPINION OF COUNSEL OR A NO-ACTION LETTER FROM THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION, IN EACH CASE, SATISFACTORY TO THE ISSUER OF SUCH SECURITIES THAT SUCH REGISTRATION IS NOT REQUIRED. 4. The Purchaser understands that no offering circular or prospectus will be prepared in connection with the offer and sale of the Shares and that Goldman Sachs has not provided, and will not provide, the Purchaser with any other information regarding the Shares or the Company; the Purchaser has not requested Goldman Sachs to provide it with any such information. 5. In making its decision to purchase the Shares, the Purchaser: (a) has made its own independent, investment decision regarding the Shares based on its own knowledge (and information it may have or which is publicly available) with respect to the Shares and the Company; (b) has had access to such information as it deems necessary or appropriate in connection with its purchase of the Shares; and (c) has sufficient knowledge and experience in financial and business matters, and expertise in assessing credit, market and all other relevant risk, that it is capable of evaluating, and has evaluated, independently the merits, risks and suitability of purchasing the Shares. 6. The Purchaser understands that the Shares have not been registered under the Securities Act or any state securities laws and may not be offered, sold, pledged or otherwise transferred unless registered pursuant to, or in a transaction that is exempt from, the Securities Act and any applicable securities laws of any state of the United States. 7. The Purchaser understands that Goldman Sachs does not make any representation as to the availability of Rule 144 or any other exemption under the Securities Act for the reoffer, resale, pledge or other transfer of the Shares. 8. The Purchaser understands that, for so long as the Shares remain "restricted securities" within the meaning of Rule 144 under the Securities Act, the Shares may not be deposited in any unrestricted depositary facility for the Shares. 9. The Purchaser understands that by its purchase or holding of the Shares the Purchaser is assuming and is capable of bearing the risk of loss that may occur with respect to the Shares, including the possibility that the Purchaser may lose all or a substantial portion of its investment in the Shares, and the Purchaser will not look to Goldman Sachs for all or part of any such loss or losses it may suffer. 10. The Purchaser represents that two of its affiliates are members of the Board of Directors of the Company and that, in such capacity, such affiliates from time to time may or may not possess or receive non-public information that is material or price-sensitive in relation to the Company or its securities. The Purchaser further represents that it is not in possession of material non-public information with respect to the Company except insofar as such information has otherwise been made available to the Board of Directors of the Company. 11. Purchaser agrees to indemnify and hold Goldman Sachs harmless from any loss, claim, damage or liability arising out of or relating to its breach of or inaccuracy in any of the foregoing representations, warranties, or agreements of Purchaser. By agreeing to sell the Shares and by selling the Shares, Goldman Sachs represents and warrants to, and agrees with, the Purchaser and its affiliates that: 1. The Warrant is owned by Goldman Sachs of record and beneficially, free and clear of all claims, liens or encumbrances of any nature whatsoever, and upon issuance upon exercise of the Warrant, the Shares will be free and clear of all claims, liens or encumbrances of any nature whatsoever arising out of the actions of Goldman Sachs. 2. Goldman Sachs agrees to indemnify and hold Purchaser harmless from any loss, claim, damage or liability arising out of or relating to its breach or inaccuracy in any of the foregoing representations, warranties or agreements of Goldman Sachs. Yours truly Goldman, Sachs & Co. By: /s/ Stephen Golden ----------------------------------- Name: Stephen Golden Title: Authorized Signatory Accepted and agreed Special Value Absolute Return Fund, LLC By: SVAR/MM, LLC its Managing Member By: Special Value Investment Management, LLC, its Managing Member By:/s/ Michael E. Tennenbaum ----------------------------------------------- Michael E. Tennenbaum, its Managing Member Date: June 12, 2002 EX-99.9 4 y61538exv99w9.txt JOINT FILING AGREEMENT Exhibit 99.9 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock, $0.01 par value, of Party City Corporation, and further agree to the filing of this agreement as an Exhibit thereto. In addition, each party to this Agreement expressly authorizes each other party to this Agreement to file on its behalf any and all amendments to such Statement on Schedule 13D. Date: June 13, 2002 GOLDMAN, SACHS & CO. THE GOLDMAN SACHS GROUP, INC. By: /s/ Roger S. Begelman By: /s/ Roger S. Begelman -------------------------- -------------------------- Name: Roger S. Begelman Name: Roger S. Begelman Title: Attorney-in-fact Title: Attorney-in-fact EX-99.10 5 y61538exv99w10.txt POWER OF ATTORNEY Exhibit 99.10 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that GOLDMAN, SACHS & CO. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934 (as amended, the "Act"), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 8th, 2000. GOLDMAN, SACHS & CO. By: /s/ Gregory K. Palm ----------------------------- Name: Gregory K. Palm Title: Managing Director EX-99.11 6 y61538exv99w11.txt POWER OF ATTORNEY Exhibit 99.11 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that THE GOLDMAN SACHS GROUP, INC. (the "Company") does hereby make, constitute and appoint each of Hans L. Reich and Roger S. Begelman, acting individually, its true and lawful attorney, to execute and deliver in its name and on its behalf whether the Company is acting individually or as representative of others, any and all filings required to be made by the Company under the Securities Exchange Act of 1934 (as amended, the "Act"), with respect to securities which may be deemed to be beneficially owned by the Company under the Act, giving and granting unto each said attorney-in-fact power and authority to act in the premises as fully and to all intents and purposes as the Company might or could do if personally present by one of its authorized signatories, hereby ratifying and confirming all that said attorney-in-fact shall lawfully do or cause to be done by virtue hereof. THIS POWER OF ATTORNEY shall remain in full force and effect until either revoked in writing by the undersigned or until such time as the person or persons to whom power of attorney has been hereby granted cease(s) to be an employee of The Goldman Sachs Group, Inc. or one of its affiliates. IN WITNESS WHEREOF, the undersigned has duly subscribed these presents as of December 8th, 2000. THE GOLDMAN SACHS GROUP, INC. By: /s/ Gregory K. Palm --------------------------------------------------- Name: Gregory K. Palm Title: Executive Vice President and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----