EXHIBIT 10.1

 

Amendment No. 6
to Credit Agreement

 

This Amendment No. 6 to Credit Agreement is dated as of October 13, 2015, and is
between CTI Industries Corporation, an Illinois corporation (the “Borrower”);
CTI Supply, Inc., an Illinois corporation f/k/a CTI Helium, Inc., and a
Wholly-Owned Subsidiary of the Borrower, in its capacity as a guarantor (the
“Subsidiary Guarantor”); and BMO Harris Bank N.A., a national banking
association, successor to Harris N.A. (the “Bank”).

 

The Borrower and the Bank entered into a Credit Agreement dated as of April 29,
2010 (the “Credit Agreement”), under which the Bank has extended certain credit
facilities to the Borrower.

 

In connection with the Credit Agreement, the Subsidiary Guarantor entered into a
Guaranty dated as of April 29, 2010 (the “Subsidiary Guaranty”), under which,
among other things, the Subsidiary Guarantor guarantees the prompt and complete
payment and performance of the Obligations.

 

The parties now desire to amend the Credit Agreement in certain respects.

 

The parties therefore agree as follows:

 

1.          Definitions. Defined terms used but not defined in this agreement
are as defined in the Credit Agreement.

 

2.          Amendments to Credit Agreement. (a) The second sentence of
section 1.4 of the Credit Agreement (which sentence begins, “The Revolving
Credit may be utilized by the Borrower…”) is hereby amended to read in its
entirety as follows:

 

“The Revolving Credit may be utilized by the Borrower in the form of Revolving
Loans and Letters of Credit, all as more fully hereinafter set forth, provided
that the aggregate principal amount of Revolving Loans and Letters of Credit
outstanding at any one time shall not exceed the Revolving Credit Availability.”

 

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(b)          Section 1.4 of the Credit Agreement is hereby further amended by
inserting the following new sentence at the end of that section:

 

“The Bank shall have the right, at any time and from time to time in the
exercise of its reasonable discretion, to establish, modify, or eliminate
reserves (including, without limitation, in respect of Credit Product
Obligations) on the Revolving Credit Commitment, the Borrowing Base, or, without
duplication, both the Revolving Credit Commitment and the Borrowing Base.”

 

(c)          The definition of “Borrowing Base” in section 5.1 of the Credit
Agreement is hereby amended to read in its entirety as follows, effective as of
October 1, 2015:

 

“            “Borrowing Base” means, as of any time it is to be determined, the
sum of: (a) 85% of the then outstanding unpaid amount of Eligible Receivables;
plus (b) the lesser of (i) $6,500,000 and (ii) 60% of the value (computed at the
lower of market or cost using the first-in/first-out method of inventory
valuation applied by the Borrower in accordance with GAAP) of Eligible
Inventory; (c) the Temporary Overadvance Amount; provided that the Borrowing
Base shall be computed only as against and on so much of the Collateral as is
included on the certificates to be furnished from time to time by the Borrower
pursuant to Section 8.5(a) hereof and, if required by the Bank pursuant to any
of the terms hereof or any Collateral Document, as verified by such other
evidence required to be furnished to the Bank pursuant hereto or pursuant to any
such Collateral Document.”

 

(d)          The definition of “Revolving Credit Availability” in section 5.1 of
the Credit Agreement is hereby amended to read in its entirety as follows:

 

“            “Revolving Credit Availability” means, as of any time it is to be
determined, an amount equal to the lesser of (a) the result of (i) the Revolving
Credit Commitment at such time, minus (ii) the amount of reserves then imposed
on the Revolving Credit Commitment by the Bank in accordance with this
Agreement, and (b) the result of (i) the Borrowing Base as then determined and
computed, minus (ii) the amount of reserves then imposed on the Borrowing Base
by the Bank in accordance with this Agreement.”

 

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(e)          The definition of “Revolving Credit Commitment” in section 5.1 of
the Credit Agreement is hereby amended to read in its entirety as follows:

 

“            “Revolving Credit Commitment” means an amount equal to Twelve
Million and 00/100 Dollars ($12,000,000.00), as such amount may be reduced
pursuant to the terms of this Agreement.”

 

(f)          Section 5.1 of the Credit Agreement is hereby further amended by
inserting the following new definition in the appropriate alphabetical order,
effective as of October 1, 2015:

 

“            “Temporary Overadvance Amount” means (a) on and after October 1,
2015, through and including April 30, 2016, an amount equal to $1,000,000; and
(b) at any other time (including on and after May 1, 2016), an amount equal to
$0.”

 

(g)          Exhibit F to the Credit Agreement is hereby amended to read in its
entirety as set forth in Exhibit F to this agreement.

 

3.          Reaffirmation of Subsidiary Guaranty. The Subsidiary Guarantor
hereby expressly does each of the following:

 

(1)consents to the execution by the Borrower and the Bank of this agreement;

 

(2)acknowledges that the “Indebtedness” (as defined in the Subsidiary Guaranty)
includes all of the “Obligations” under and as defined in the Credit Agreement,
as amended from time to time (including as amended by this agreement);

 

(3)acknowledges that the Subsidiary Guarantor does not have any set-off,
defense, or counterclaim to the payment or performance of any of the obligations
of the Borrower under the Credit Agreement or the Subsidiary Guarantor under the
Subsidiary Guaranty;

 

(4)reaffirms, assumes, and binds itself in all respects to all of the
obligations, liabilities, duties, covenants, terms, and conditions contained in
the Subsidiary Guaranty;

 

(5)agrees that all such obligations and liabilities under the Subsidiary
Guaranty continue in full force and that the execution and delivery of this
agreement to, and its acceptance by, the Bank will not in any manner whatsoever
do any of the following:

 

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(A)impair or affect the liability of the Subsidiary Guarantor to the Bank under
the Subsidiary Guaranty;

 

(B)prejudice, waive, or be construed to impair, affect, prejudice, or waive the
rights and abilities of the Bank at law, in equity, or by statute against the
Subsidiary Guarantor pursuant to the Subsidiary Guaranty; or

 

(C)release or discharge, or be construed to release or discharge, any of the
obligations and liabilities owing to the Bank by the Subsidiary Guarantor under
the Subsidiary Guaranty; and

 

(6)represents and warrants that each of the representations and warranties made
by the Subsidiary Guarantor in any of the documents executed in connection with
the Loans remain true and correct as of the date of this agreement.

 

4.          Representations and Warranties. To induce the Bank to enter into
this agreement, the Borrower hereby represents to the Bank as follows:

 

(1)that the Borrower is duly authorized to execute and deliver this agreement
and is and will continue to be duly authorized to borrow monies under the Credit
Agreement, as amended by this agreement, and to perform its obligations under
the Credit Agreement, as amended by this agreement;

 

(2)that the execution and delivery of this agreement and the performance by the
Borrower of its obligations under the Credit Agreement, as amended by this
agreement, do not and will not conflict with any provision of law or of the
articles of organization or operating agreement of the Borrower or of any
agreement binding upon the Borrower;

 

(3)that the Credit Agreement, as amended by this agreement, is a legal, valid,
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability might be limited by
bankruptcy, insolvency, or other similar laws of general application affecting
the enforcement of creditors’ rights or by general principles of equity limiting
the availability of equitable remedies;

 

(4)that the representation and warranties set forth in section 6 of the Credit
Agreement, as amended by this agreement, are true and correct with the same
effect as if those representations and warranties had been made on the date
hereof, except that all references to the financial statements mean the
financial statements most recently delivered to the Bank and except for changes
specifically permitted under the Credit Agreement, as amended by this agreement;

 

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(5)that the Borrower has complied with and is in compliance with all of the
covenants set forth in the Credit Agreement, as amended by this agreement,
including the covenants stated in section 8 of the Credit Agreement; and

 

(6)that as of the date of this agreement no Default and no Event of Default
under section 10 of the Credit Agreement, as amended by this agreement, has
occurred or is continuing.

 

5.Conditions. The effectiveness of this agreement is subject to satisfaction of
the following conditions:

 

(1)that the Bank has received the following:

 

(A)a copy of this agreement, duly executed by the parties; and

 

(B)all other documents, certificates, resolutions, and opinions of counsel as
the Bank requests; and

 

(2)that all legal matters incident to the execution and delivery of this
agreement are satisfactory to the Bank and its counsel.

 

6.          General. (a) This agreement and the rights and duties of the parties
hereto are governed by, and are to be construed in accordance with, the internal
laws of State of Illinois without regard to principles of conflicts of laws.
Wherever possible each provision of the Credit Agreement and this agreement is
to be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of the Credit Agreement and this agreement is
prohibited by or invalid under any such law, that provision will be deemed
ineffective to the extent of that prohibition or invalidity, without
invalidating the remainder of that provision or the remaining provisions of the
Credit Agreement and this agreement.

 

(b)          This agreement is a Loan Document.

 

(c)          This agreement binds each party and their respective successors and
assigns, and this agreement inures to the benefit of each party and the
successors and assigns of the Bank.

 

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(d)          Except as specifically modified or amended by the terms of this
agreement, the terms and provisions of the Credit Agreement, the Subsidiary
Guaranty, and the other Loan Documents are incorporated by reference herein and
in all respects continue in full force and effect. The Borrower, by execution of
this agreement, hereby reaffirms, assumes, and binds itself to all of the
obligations, duties, rights, covenants, terms, and conditions contained in the
Credit Agreement and the other Loan Documents to which it is a party.

 

(e)          Each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” or words of like import, and each reference to the Credit
Agreement in any and all instruments or documents delivered in connection
therewith, are deemed to refer to the Credit Agreement, as amended by this
agreement.

 

(f)          The Borrower shall pay all costs and expenses in connection with
the preparation of this agreement and other related loan documents, including,
without limitation, reasonable attorneys’ fees and time charges of attorneys who
are employees of the Bank or any affiliate or parent of the Bank. The Borrower
shall pay any and all stamp and other taxes, UCC search fees, filing fees, and
other costs and expenses in connection with the execution and delivery of this
agreement and the other instruments and documents to be delivered hereunder, and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such costs
and expenses.

 

(g)          The Borrower hereby waives and releases any and all current
existing claims, counterclaims, defenses, or set-offs of every kind and nature
which it has or might have against the Bank arising out of, pursuant to, or
pertaining in any way to the Credit Agreement, any and all documents and
instruments in connection with or relating to the foregoing, or this agreement.
The Borrower hereby further covenants and agrees not to sue the Bank or assert
any claims, defenses, demands, actions, or liabilities against the Bank arising
out of, pursuant to, or pertaining in any way to the Credit Agreement, any and
all documents and instruments in connection with or relating to the foregoing,
or this agreement.

 

(h)          The parties may sign this agreement in several counterparts, each
of which will be deemed an original but all of which together will constitute
one instrument.

 

[Signature pages follow]

 

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The parties are signing this Amendment No. 6 to Credit Agreement as of the date
stated in the introductory clause.

 

  CTI Industries Corporation         By: /s/ Stephen M. Merrick   Name: Stephen
M. Merrick   Title: President         CTI Supply, Inc.   (f/k/a
CTI Helium, Inc.)         By: /s/ Stephen M. Merrick   Name: Stephen M. Merrick
  Title: President         BMO Harris BANK N.A.         By: /s/ Joseph C.
Mikulskis   Name: Joseph C. Mikulskis   Title: Senior Vice President