REVOLVING NOTE

$6,500,000.00
Date: as of: February 1, 2006
Chicago, Illinois
Due Date: January 31, 2009
   

 

FOR VALUE RECEIVED, CTI Industries Corporation, an Illinois corporation (the
“Borrower”), whose address is 22160 North Pepper Road, Barrington, Illinois
60010, promises to pay to the order of CHARTER ONE BANK, N.A., a national
banking association (hereinafter, together with any holder hereof, the “Bank”),
whose address is 71 South Wacker Drive, Suite 2900, Chicago, Illinois 60606, on
or before January 31, 2009 (the “Revolving Loan Maturity Date”), the lesser of
(i) Six Million Five Hundred Thousand and 00/100 Dollars ($6,500,000.00), or
(ii) the aggregate principal amount of all Revolving Loans outstanding under and
pursuant to that certain Loan and Security Agreement dated as of February 1,
2006, executed by and between the Borrower and the Bank, as amended from time to
time (as amended, supplemented or modified from time to time, the “Loan
Agreement”), and made available by the Bank to the Borrower at the maturity or
maturities and in the amount or amounts stated on the records of the Bank,
together with interest (computed on the actual number of days elapsed on the
basis of a 360 day year) on the aggregate principal amount of all Revolving
Loans outstanding from time to time as provided in the Loan Agreement.
Capitalized words and phrases not otherwise defined herein shall have the
meanings assigned thereto in the Loan Agreement.

This Revolving Note evidences the Revolving Loans, Letters of Credit and other
indebtedness incurred by the Borrower under and pursuant to the Loan Agreement,
to which reference is hereby made for a statement of the terms and conditions
under which the Revolving Loan Maturity Date or any payment hereon may be
accelerated. The holder of this Revolving Note is entitled to all of the
benefits and security provided for in the Loan Agreement. All Revolving Loans
shall be repaid by the Borrower on the Revolving Loan Maturity Date, unless
payable sooner pursuant to the provisions of the Loan Agreement.

Principal and interest shall be paid to the Bank at its address set forth above,
or at such other place as the holder of this Revolving Note shall designate in
writing to the Borrower. Each Revolving Loan made, and all Letters of Credit
issued by the Bank, and all payments on account of the principal and interest
thereof shall be recorded on the books and records of the Bank and the principal
balance as shown on such books and records, or any copy thereof certified by an
officer of the Bank, shall be rebuttably presumptive evidence of the principal
amount owing hereunder.

Except for such notices as may be required under the terms of the Loan
Agreement, the Borrower waives presentment, demand, notice, protest, and all
other demands, or notices, in connection with the delivery, acceptance,
performance, default, or enforcement of this Revolving Note, and assents to any
extension or postponement of the time of payment or any other indulgence.

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The Revolving Loans and the Letters of Credit evidenced hereby have been made
and/or issued and this Revolving Note has been delivered at the Bank’s main
office set forth above. This Revolving Note shall be governed and construed in
accordance with the laws of the State of Illinois, in which state it shall be
performed, and shall be binding upon the Borrower, and its legal
representatives, successors, and assigns. Wherever possible, each provision of
the Loan Agreement and this Revolving Note shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of the
Loan Agreement or this Revolving Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
the Loan Agreement or this Revolving Note. The term “Borrower” as used herein
shall mean all parties signing this Revolving Note, and each one of them, and
all such parties, their respective successors and assigns, shall be jointly and
severally obligated hereunder.

 
IN WITNESS WHEREOF, the Borrower has executed this Revolving Note as of the date
set forth above.
 

 
CTI Industries Corporation, an Illinois corporation
         
By: /s/Howard W. Schwan
   
Name: Howard W. Schwan
   
Title: President
 

 
 
 
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