EXHIBIT 10.3


 


AMENDMENT NO. 6
TO NOTE AND WARRANT PURCHASE AGREEMENT


 


This AMENDMENT NO. 6
TO NOTE AND WARRANT PURCHASE AGREEMENT (this “Agreement”), effective as of October 17, 2017, is by and
between CTI INDUSTRIES CORPORATION, an Illinois corporation (“Company”), and BMO PRIVATE EQUITY (U.S.), INC.,
a Delaware corporation (“Purchaser”).


 


RECITALS:


 


WHEREAS, Purchaser and
Company have entered into certain financing arrangements pursuant to that certain Note and Warrant Purchase Agreement dated as
of July 17, 2012 (as amended hereby, and as the same may have heretofore been or may hereafter be further amended, modified,
supplemented, extended, renewed, restated, replaced or otherwise modified, the “Purchase Agreement”), by and
among Company and Purchaser, under which, among other things, (a) Company sold to Purchaser and Purchaser purchased from Company
a note in the original principal amount of $5,000,000 and (b) in connection with the exercise of Purchaser’s put right under
the Warrant, the Company issued a warrant conversion note to Purchaser in the original principal amount of $797,881.31;


 


WHEREAS, in connection
with the Purchase Agreement, CTI Supply, Inc., an Illinois corporation f/k/a CTI
Helium, Inc., and a Wholly-Owned Subsidiary of the Company, in its capacity as a guarantor (the “Subsidiary Guarantor”),
entered into a Guaranty dated as of July 17, 2012 (the “Subsidiary Guaranty”), under which, among other things,
the Subsidiary Guarantor guarantees the prompt and complete payment and performance of the Obligations;


 


WHEREAS, Company has requested
that, subject to the terms and conditions of this Agreement, Purchaser agree to amend the Purchase Agreement in certain respects;
and


 


WHEREAS, Purchaser is willing
to agree to amend the Purchase Agreement in certain respects, in each case, subject to the terms and conditions specified herein.


 


NOW, THEREFORE, in consideration
of the foregoing, and the respective agreements, warranties and covenants contained herein, the parties hereto agree as follows:


 


1.             DEFINITIONS


 


1.1           Interpretation.
All capitalized terms used herein (including the recitals hereto) will have the respective meanings ascribed thereto in the Purchase
Agreement unless otherwise defined herein. The foregoing recitals, together with all exhibits attached hereto, are incorporated
by this reference and made a part of this Agreement. Unless otherwise provided herein, all section and exhibit references herein
are to the corresponding sections and exhibits of this Agreement.


 




     


     


    




 


2.             ACKNOWLEDGMENTS


 


2.1           Acknowledgment
of Obligations. Company hereby acknowledges, confirms and agrees that as of October 15, 2017, prior to the effectiveness
of this Agreement, (a) Company is indebted to Purchaser in respect of the Note in the aggregate principal amount of $5,000,000,
and (b) Company is indebted to Purchaser in respect of the Warrant Conversion Note in the aggregate principal amount of $815,139.46.
Company hereby acknowledges, confirms and agrees that all such Obligations, together with interest accrued and accruing thereon,
together with any paid-in-kind interest accrued and accruing thereon, and all fees, costs, expenses and other charges now or hereafter
payable by Company to Purchaser, are unconditionally owing by Company to Purchaser, without offset, defense or counterclaim of
any kind, nature or description whatsoever.


 


2.2           Acknowledgment
of Security Interests. Company hereby acknowledges, confirms and agrees that Purchaser has, and will continue to have, valid,
enforceable and perfected second-priority continuing liens upon and security interests in the Collateral heretofore granted to
and for the benefit of Purchaser, pursuant to the Purchase Agreement and the Operative Documents or otherwise granted to or held
by Purchaser.


 


2.3           Binding
Effect of Documents. Company hereby acknowledges, confirms and agrees that: (a) this Agreement constitutes an Operative
Document, (b) each of the Purchase Agreement and the other Operative Documents to which it is a party has been duly executed
and delivered to Purchaser by Company, and each is and will remain in full force and effect as of the date hereof except as modified
pursuant hereto, (c) the agreements and obligations of Company contained in such documents and in this Agreement constitute
the legal, valid and binding Obligations of Company, enforceable against it in accordance with their respective terms, and Company
has no valid defense to the enforcement of such Obligations, and (d) Purchaser is and will be entitled to the rights, remedies
and benefits provided for under the Purchase Agreement and the other Operative Documents and applicable law.


 


2.4           Acknowledgement
of Additional Defaults. The parties hereto acknowledge, confirm and agree that any misrepresentation by Company, or any failure
of Company to comply with the covenants, conditions and agreements contained in this Amendment will constitute an immediate Event
of Default under the Purchase Agreement and the other Operative Documents.


 


3.             AMENDMENT
TO PURCHASE AGREEMENT


 


In reliance upon the representations and warranties
of Company set forth in Section 5 below and subject to the conditions to effectiveness set forth in Section 6 below:


 


3.1           A
new Section 3.4 is hereby added to the Purchase Agreement immediately following Section 3.3 thereof to read as follows:


 


“Section 3.4           Certain
Note Interest Payment. Notwithstanding anything contained in Section 1 of the Note to the contrary, effective as of October
2, 2017, the Current Interest payment in the amount of $150,138.89 due and payable on October 2, 2017 in respect of the Note has
been deferred until, and is now due and payable on, December 1, 2017.”


 




    	 	2	 



     


    

 


3.2           Section 11.8
of the Purchase Agreement is hereby amended by amending and restating the following contact information:


 


	To the Purchaser:	BMO Private Equity (U.S.), Inc.
	 	111 West Monroe St.
	 	20th Floor East
	 	Chicago, IL 60603
	 	Attention:  Jason Swanson
	 	Telephone No.:  (312) 293-8196
	 	Facsimile No.:  [_____________________]
	 	 
	With copy to:	Vedder Price P.C.
	 	222 North LaSalle Street, Suite 2400
	 	Chicago, Illinois  60601
	 	Attention:  Guy E. Snyder & Marie H. Godush
	 	Telephone:  (312) 609-7500
	 	Facsimile:  (312) 609-5005


 


4.             OTHER
AGREEMENTS


 


4.1           Agreement
Regarding Borrowing Requests. Notwithstanding anything in the Senior Credit Agreement to the contrary, Company hereby agrees
not to request a Revolving Loan (as defined in the Senior Credit Agreement), and further agrees that Senior Lender shall have no
obligation to make a Revolving Loan (as defined in the Senior Credit Agreement), in excess of the amount necessary, as certified
by the Chief Financial Officer of the Company in connection with any request for a Revolving Loan (as defined in the Senior Credit
Agreement), for the uses of the proceeds thereof on account of disbursements to be made by Company in the ordinary course of business
during the next one-week period.


 


4.2           Updated
Cash Flow Forecasts. On the first Business Day of each week (unless otherwise approved in writing by the Purchaser), Company
shall deliver to Purchaser an updated 13-week cash flow forecast, in reasonable detail and in form and substance reasonably satisfactory
to the Purchaser, showing projected cash receipts and disbursements (including referencing line item sources and uses of cash)
of the Company and its Subsidiaries over the immediately succeeding 13-week period.


 


4.3           Updated
Perfection Certificate; Schedules. On or before October 20, 2017, Company shall deliver to Purchaser an updated perfection
certificate and updated schedules to the Purchase Agreement and the Security Agreement, each in reasonable detail and in form and
substance reasonably satisfactory to Purchaser.


 




    	 	3	 



     


    

 


4.4           Letter
of Intent. On or before October 20, 2017, Company shall deliver to Purchaser a fully executed letter of intent (in form
and substance acceptable to Purchaser) from a third-party financial institution (the “Proposed Lender”) that
provides for the refinance and payment in full of each of the Senior Debt and the Obligations, collectively, and a closing thereof
within a timeframe acceptable to Purchaser in its sole discretion (the “Letter of Intent”). Company’s
failure to deliver a Letter of Intent required by this Section 4.4 shall not constitute an Event of Default; provided,
however, that as a result of such failure, Company shall be required to comply with the covenant set forth in Section 4.6
below.


 


4.5           [Reserved].


 


4.6           Agreement
to Retain Consultant. If (i) Company fails to deliver the Letter of Intent in accordance with Section 4.4 above,
or (ii) at any time following the delivery of the Letter of Intent in accordance with Section 4.4 above, (a) the
Proposed Lender notifies Company that it has elected to terminate the Letter of Intent or that the Proposed Lender will not continue
to proceed toward the closing contemplated by the Letter of Intent, or (b) the Company is no longer pursuing the transaction
contemplated by the Letter of Intent, as may be determined by the Purchaser and the Senior Lender in their reasonable discretion,
upon the request by Senior Lender, then within ten (10) days of the request of Senior Lender, and at the sole expense of Company,
Company shall hire or otherwise retain a consultant (the “Consultant”) acceptable to Senior Lender and Purchaser,
pursuant to an engagement letter, including the scope thereof, that has terms and conditions acceptable to Purchaser, to advise
Company with respect to its business and operations and to pursue refinancing options. Company shall fully cooperate with the Consultant
and shall authorize the Consultant to provide to Purchaser information and reports with respect to Company as Purchaser shall request
from time to time, including, but not limited to, information and reports related to Company’s financial condition, businesses,
assets and liabilities and refinancing efforts and prospects.


 


4.7           Purchaser
Representatives. Company acknowledges and agrees that Purchaser may retain consultants or other advisors to assist and advise
Purchaser, and agrees to provide such representatives access to the Company’s and Subsidiary Guarantor’s books, records,
senior management and executives as such representatives may reasonably request from time to time. All amounts incurred by Purchaser
in connection with such retentions and engagement of any such representatives shall constitute Obligations and be reimbursed by
the Company pursuant to the Purchase Agreement.


 


4.8           Amendment
Fee. In consideration of the transactions contemplated hereby, the Company hereby agrees to pay to Purchaser an amendment fee
(the “Amendment Fee”) in an amount equal to $14,500. The Amendment Fee shall be fully earned as of the date
hereof and shall be due and payable in full in cash on or before December 1, 2017. No portion of the Amendment Fee which is paid
shall be subject to return or disgorgement.


 


5.             REPRESENTATIONS
AND WARRANTIES


 


Company hereby represents,
warrants and covenants as follows:


 


5.1           Representations
in the Purchase Agreement and the Other Operative Documents. Each of the representations and warranties made by or on behalf
of Company to Purchaser in the Purchase Agreement or any of the other Operative Documents, and to Senior Lender in the Senior Credit
Agreement or any of the other Senior Credit Documents, was true and correct when made, and is true and correct on and as of the
date of this Agreement with the same full force and effect as if each of such representations and warranties had been made by Company
on the date hereof and in this Agreement. All of the information contained in the schedules attached to the Purchase Agreement
and the Security Agreement remains true and correct as of the date hereof.


 




    	 	4	 



     


    




 


5.2           Binding
Effect of Documents. This Agreement has been duly authorized, executed and delivered to Purchaser by Company, is enforceable
in accordance with its terms and is in full force and effect, except as the enforcement thereof may be subject to (i) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally
and (ii) general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).


 


5.3           No
Conflict. The execution, delivery and performance of this Agreement by Company will not violate any requirement of law or contractual
obligation of Company and will not result in, or require, the creation or imposition of any Lien on any of their respective properties
or revenues.


 


6.             CONDITIONS
TO EFFECTIVENESS OF CERTAIN PROVISIONS OF THIS AGREEMENT


 


The effectiveness of the
terms and provisions of this Agreement (other than the terms and provisions of Sections 7.6 and 7.7, which will be effective
immediately upon the execution of this Agreement) is subject to the following conditions precedent:


 


(a)          Purchaser’s
receipt of an original of this Agreement, duly authorized, executed and delivered by Company and Purchaser;


 


(b)          Purchaser’s
receipt of the Consent and Reaffirmation of Subsidiary Guarantor attached hereto as Exhibit 1;


 


(c)          Purchaser’s
receipt of fully executed copies of each of the other documents referenced on the Closing Checklist attached hereto as Exhibit 2,
each of which shall be in form and substance acceptable to Purchaser, and the transactions contemplated by such documents shall
have been consummated in accordance with the terms thereof; and


 


(d)          Purchaser’s
receipt of all fees and other amounts payable on or prior to the closing date of this Amendment, including all attorneys’,
consultants’ and other professionals’ fees and expenses incurred by Purchaser.


 


7.             MISCELLANEOUS


 


7.1           Continuing
Effect of Purchase Agreement. Except as modified pursuant hereto, no other changes or modifications to the Purchase Agreement
or any other Operative Document are intended or implied by this Agreement and in all other respects the Purchase Agreement and
the other Operative Documents hereby are ratified, restated and confirmed by all parties hereto as of the date hereof. To the extent
of any conflict between the terms of this Agreement, the Purchase Agreement, and the other Operative Documents, the terms of this
Agreement will govern and control. The Purchase Agreement and this Agreement will be read and construed as one agreement.


 




    	 	5	 



     


    

 


7.2           Costs
and Expenses. In addition to, and without in any way limiting, the obligations of Company set forth in Section 11.4 of
the Purchase Agreement, Company absolutely and unconditionally agrees to pay to Purchaser, on demand by Purchaser at any time,
whether or not all or any of the transactions contemplated by this Agreement are consummated: all reasonable fees, costs and expenses
incurred by Purchaser and any of its directors, officers, employees or agents (including, without limitation, reasonable fees,
costs and expenses incurred of any counsel to Purchaser), regardless of whether Purchaser or any such other Person is a prevailing
party, in connection with (a) the preparation, negotiation, execution, delivery or enforcement of this Agreement, the Purchase
Agreement, the other Operative Documents and any agreements, documents or instruments contemplated hereby and thereby, and (b) any
investigation, litigation or proceeding related to this Agreement, the Purchase Agreement or any other Operative Document or any
act, omission, event or circumstance in any matter related to any of the foregoing.


 


7.3           Further
Assurances. At Company’s expense, the parties hereto will execute and deliver such additional documents and take such
further action as may be necessary or desirable to effectuate the provisions of this Agreement.


 


7.4           Successors
and Assigns; No Third-Party Beneficiaries. This Agreement will be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns. No Person other than the parties hereto and, in the case of Sections 7.6
and 7.7 hereof, the Releasees, shall have any rights hereunder or be entitled to rely on this Agreement and all third-party beneficiary
rights (other than the rights of the Releasees under Sections 7.6 and 7.7 hereof) are hereby expressly disclaimed.


 


7.5           Survival
of Representations, Warranties and Covenants. All representations, warranties, covenants and releases of Company made in this
Agreement or any other document furnished in connection with this Agreement will survive the execution and delivery of this Agreement,
and no investigation by Purchaser, or any closing, will affect the representations and warranties or the right of Purchaser to
rely upon them.


 


7.6           Release.


 


(a)          In
consideration of the agreements of Purchaser contained herein and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the Company and the Subsidiary Guarantor, on behalf of itself and its successors and
assigns, and its present and former members, managers, shareholders, affiliates, subsidiaries, divisions, predecessors, directors,
officers, attorneys, employees, agents, consultants, financial advisors, legal representatives and other representatives (Company,
the Subsidiary Guarantor, and all such other Persons being hereinafter referred to collectively as the “Releasing Parties”
and individually as a “Releasing Party”), hereby absolutely, unconditionally and irrevocably releases, remises
and forever discharges Purchaser, and each of its respective successors and assigns, and its respective present and former shareholders,
members, managers, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal
representatives and other representatives (Purchaser and all such other Persons being hereinafter referred to collectively as the
“Releasees” and individually as a “Releasee”), of and from any and all demands, actions,
causes of action, suits, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities
whatsoever (individually, a “Claim” and collectively, “Claims”) of every kind and nature,
known or unknown, suspected or unsuspected, at law or in equity, which any Releasing Party or any of its successors, assigns or
other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon,
or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the date of this Agreement,
including, without limitation, for or on account of, or in relation to, or in any way in connection with this Agreement, the Purchase
Agreement, any of the other Operative Documents or any of the transactions hereunder or thereunder.


 




    	 	6	 



     


    

 


(b)          Company
and the Subsidiary Guarantor understands, acknowledges and agrees that the release set forth above may be pleaded as a full and
complete defense to any Claim and may be used as a basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such release.


 


(c)          Company
and the Subsidiary Guarantor agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which
may hereafter be discovered will affect in any manner the final, absolute and unconditional nature of the release set forth above.


 


(d)          As
to each and every claim released hereunder, Company and the Subsidiary Guarantor hereby represents that it has received the advice
of legal counsel with regard to the releases contained herein. As to each and every claim released hereunder, Company and the Subsidiary
Guarantor also waives the benefit of each other similar provision of applicable federal or state law (including without limitation
the laws of the state of Illinois), if any, pertaining to general releases after having been advised by its legal counsel with
respect thereto.


 


(e)          Company
and the Subsidiary Guarantor hereunder hereby specifically acknowledges and agrees that: (i) none of the provisions of this
Section 7.6 shall be construed as or constitute an admission of any liability on the part of Releasees; (ii) the provisions
of this Section 7.6 shall constitute an absolute bar to any Claim of any kind, whether any such Claim is based on contract,
tort, warranty, mistake or any other theory, whether legal, statutory or equitable; and (iii) any attempt to assert a Claim
barred by the provisions of this Section 7.6 shall subject Company and the Subsidiary Guarantor hereunder to the provisions
of applicable law setting forth the remedies for the bringing of groundless, frivolous or baseless claims or causes of action.


 


7.7           Covenant
Not to Sue. Each Releasing Party hereby absolutely, unconditionally and irrevocably covenants and agrees with and in favor
of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis
of any Claim released, remised and discharged by any Releasing Party pursuant to Section 7.6 above. If any Releasing Party
violates the foregoing covenant, Company, for itself and its successors and assigns, and its present and former members, managers,
shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents, legal representatives
and other representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation,
all attorneys’ fees and costs incurred by any Releasee as a result of such violation.


 




    	 	7	 



     


    

 


7.8           Severability.
Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable will not impair or invalidate
the remainder of this Agreement.


 


7.9           Reviewed
by Attorneys. Company and the Subsidiary Guarantor represent and warrant to Purchaser that each (a) understands fully
the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (b) has been afforded an
opportunity to discuss this Agreement with, and have this Agreement reviewed by, such attorneys and other persons as Company may
wish, and (c) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free
will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge and agree
that neither this Agreement nor the other documents executed pursuant hereto will be construed more favorably in favor of one than
the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the
negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.


 


7.10         Disgorgement.
If Purchaser is, for any reason, compelled by a court or other tribunal of competent jurisdiction to surrender or disgorge any
payment, interest or other consideration described hereunder to any person because the same is determined to be void or voidable
as a preference, fraudulent conveyance, impermissible set-off or for any other reason, such indebtedness or part thereof intended
to be satisfied by virtue of such payment, interest or other consideration will be revived and continue as if such payment, interest
or other consideration had not been received by Purchaser, and Company will be liable to, and will indemnify, defend and hold Purchaser
harmless for, the amount of such payment or interest surrendered or disgorged. The provisions of this Section will survive repayment
of the Obligations or any termination of the Purchase Agreement or any other Operative Document.


 


7.11         Relationship.
Company agrees that the relationship between Purchaser and Company is that of creditor and debtor and not that of partners or joint
venturers. This Agreement does not constitute a partnership agreement or any other association between Purchaser and Company. Company
acknowledges that Purchaser has acted at all times only as a creditor to Company within the normal and usual scope of the activities
normally undertaken by a creditor and in no event has Purchaser attempted to exercise any control over Company or its business
or affairs. Company further acknowledges that Purchaser has not taken or failed to take any action under or in connection with
its respective rights under the Purchase Agreement or any of the other Operative Documents that in any way or to any extent has
interfered with or adversely affected Company’s ownership of Collateral.


 




    	 	8	 



     


    

 


7.12         Governing
Law: Consent to Jurisdiction and Venue. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE PURCHASE AGREEMENT AND ANY OF THE OTHER
OPERATIVE DOCUMENTS, THIS AGREEMENT, THE PURCHASE AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER WILL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN COOK COUNTY, ILLINOIS WILL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN COMPANY
AND PURCHASER PERTAINING TO THIS AGREEMENT OR THE PURCHASE AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE PURCHASE AGREEMENT OR ANY OF THE OPERATIVE DOCUMENTS; AND FURTHER PROVIDED, THAT
NOTHING IN THIS AGREEMENT WILL BE DEEMED OR OPERATE TO PRECLUDE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF PURCHASER. EACH PARTY HEREUNDER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HEREUNDER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS ISSUED IN ANY
SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
PARTY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND THAT SERVICE SO MADE WILL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER THE SAME HAS BEEN POSTED.


 


7.13        Waivers.


 


(a)          Mutual
Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE BETWEEN PURCHASER AND COMPANY ARISING OUT OF, CONNECTED WITH, RELATED
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE PURCHASE AGREEMENT OR THE OTHER
OPERATIVE DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.


 


(b)          Waivers
by Company. Company hereby waives any rights Company may have upon payment in full of the Obligations to require Purchaser
to terminate its security interest in the Collateral, other collateral or in any other property of Company until termination of
the Purchase Agreement in accordance with its terms and the execution by Company of an agreement indemnifying Purchaser from any
loss or damage Purchaser may incur as the result of dishonored checks or other items of payment received by Purchaser from Company
or any account debtor and applied to the obligations and releasing and indemnifying, in the same manner as described in Sections 7.6
and 7.7 of this Agreement, the Releasees from all claims arising on or before the date of such termination. Company acknowledges
that the foregoing waiver is a material inducement to Purchaser in entering this Agreement and that Purchaser is relying upon the
foregoing waiver in its future dealings with Company.


 




    	 	9	 



     


    

 


7.14         Counterparts.
This Agreement may be executed and delivered via facsimile or email (in .pdf format) transmission with the same force and effect
as if an original were executed and may be executed in any number of counterparts, but all of such counterparts shall together
constitute but one and the same agreement.


 


7.15         Time
is of the Essence. Time is of the essence respecting each and every covenant, condition and provision of this Agreement to
be performed by Company.


 


[signatures on following page]


 




    	 	10	 



     


    

 


IN WITNESS WHEREOF, this
Agreement is executed and delivered as of the day and year first above written.


 


	 	COMPANY
	 	 
	 	CTI INDUSTRIES CORPORATION
	 	 
	 	By	/s/ Stephen M. Merrick
	 	Name  	Stephen M. Merrick
	 	Title   	President
	 	 
	 	SUBSIDIARY GUARANTOR
	 	 
	 	CTI SUPPLY, INC.
	 	 
	 	By	/s/ Stephen M. Merrick
	 	Name  	Stephen M. Merrick
	 	Title  	President


 


Signature Page to Amendment No. 6 to Note and Warrant Purchase
Agreement


 




     


     


    

 


	 	PURCHASER
	 	 
	 	BMO PRIVATE EQUITY (U.S.), INC., 
	 	 
	 	By	/s/ Jason Swanson
	 	Name  	Jason Swanson
	 	Title  	Managing Director


 


Signature Page to Amendment No. 6 to Note and Warrant Purchase
Agreement


 




     


     


    




 


EXHIBIT 1

to

AMENDMENT NO. 6 TO NOTE AND WARRANT PURCHASE AGREEMENT


 


CONSENT AND
REAFFIRMATION OF SUBSIDIARY GUARANTOR


 


The undersigned (“Subsidiary
Guarantor”) hereby (i) acknowledges receipt of a copy of the foregoing Amendment No. 6 to Note and Warrant
Purchase Agreement (the “Agreement”; capitalized terms used but not otherwise defined herein have the meanings
ascribed to such terms in the Purchase Agreement (as defined in the Agreement)); (ii) consents to Company’s execution
and delivery of the Agreement; (iii) agrees to be bound by the Agreement, including, without limitation, Sections 7.6
and 7.7 of the Agreement as if Subsidiary Guarantor were a party thereto; (iv) affirms that nothing contained in the Agreement,
except as specifically stated therein, will modify in any respect whatsoever any Operative Document to which it is a party; and
(v) reaffirms its obligations under (a) that certain Guaranty of Subsidiary Guarantor dated as of July 17, 2012, by and
among Subsidiary Guarantor and Purchaser and (b) each of the other Operative Documents to which it is a party (as modified
by the Agreement, collectively, the “Reaffirmed Operative Documents”) and confirms that such obligations are
unconditional and not subject to any defense, setoff, counterclaim or other adverse claim. Although Subsidiary Guarantor has been
informed of the matters set forth herein and has acknowledged and agreed to same, Subsidiary Guarantor understands that Purchaser
has no obligation to inform Subsidiary Guarantor of such matters in the future or to seek Subsidiary Guarantor’s acknowledgment
or agreement to future amendments, waivers or consents, and nothing herein creates such a duty.


 


The undersigned further agrees
that after giving effect to the Agreement, each Reaffirmed Operative Document remains in full force and effect.


 


	 	CTI SUPPLY, INC.
	 	 
	 	By:  	/s/ Stephen M. Merrick
	 	Name  	Stephen M. Merrick
	 	Title:  	President


 


Exhibit 1 to Amendment No. 6 to Note and Warrant Purchase Agreement


 




     


     


    

 


EXHIBIT 2

to

AMENDMENT NO. 6 TO NOTE AND WARRANT PURCHASE AGREEMENT


 


CLOSING CHECKLIST


 


CLOSING DATE: October 17, 2017


 


parties to
the transaction


 


	PURCHASER:	BMO PRIVATE EQUITY (U.S.), INC.

111 S. LaSalle St.

20th Floor East

Chicago, IL 60603

Attention:  Jason Swanson

Telephone No.:  (312) 293-8196

Facsimile No.:  [            ]
	 	 
	PURCHASER’S COUNSEL:	VEDDER PRICE P.C.

222 N. LaSalle Street, Suite 2400

Chicago, Illinois  60601

Attn:  Guy Snyder and Marie H. Godush

Telephone No.:  (312) 609-7500

Facsimile No.:  (312) 609-5005
	 	 
	COMPANY:	CTI INDUSTRIES CORPORATION

22160 N. Pepper Road

Lake Barrington, Illinois  60010

Attn:  Stephen M. Merrick

Telephone:  (847) 382-1000

Facsimile:  (847) 382-1219
	 	 
	COMPANY’S COUNSEL:	VANASCO, GENERALLY & MILLER

33 North LaSalle Street, Suite 2200

Chicago, Illinois 60602

Attn:  Gerald Miller

Telephone No.:  (312) 786-5100

Facsimile No.:  (312) 786-5111


 


Exhibit 2 to Amendment No. 6 to Note and Warrant Purchase Agreement


 




     


     


    

 


		A.	Operative and Security Documents



 


		(1)	Amendment No. 6 to Note and Warrant Purchase Agreement



 


		(2)	Security Agreement (CTI Supply, Inc.)



 


		(3)	Amendment No. 1 to Pledge Agreement



 


		(a)	Copy of Stock Power Agreement (being held by Senior Lender)



 


		(b)	Irrevocable Proxy Agreement



 


		(c)	Copy of CTI Supply, Inc. Stock Certificate (being held by Senior Lender)



 


		(4)	Amendment No. 1 Patent and Trademark Agreement (Company)



 


		(5)	Copyright Security Agreement (Company)



 


		(6)	Amended and Restated Junior Mortgage and Security Agreement
with Assignment of Rents



 


		(a)	Title Commitment



 


		(7)	Amendment No. 11 to Senior Credit Agreement



 


		(8)	Consent under Subordination and Intercreditor Agreement



 


		(9)	Secretary’s Certificate (CTI Industries Corporation)



 


		(a)	Articles of Incorporation



 


		(b)	Bylaws



 


		(c)	Resolutions



 


		(d)	Incumbency



 


		(10)	Secretary’s Certificate (CTI Supply, Inc.)



 


		(a)	Articles of Incorporation



 


		(b)	Bylaws



 


		(c)	Resolutions



 


		(d)	Incumbency



 


		(11)	UCC-1 Financing Statement (CTI Supply, Inc.)



 


		(12)	Lien Searches



 


Exhibit 2 to Amendment
No. 6 to Note and Warrant Purchase Agreement