EXHIBIT 10.3


 


TERM NOTE


 


	$6,000,000	Date: December 14, 2017


 


This Term Note (this
"Note") is executed and delivered under and pursuant to the terms of that certain Revolving Credit, Term Loan
and Security Agreement dated as of the date hereof (as amended, restated, modified or otherwise supplemented from time to time,
the "Credit Agreement") by and among CTI INDUSTRIES CORPORATION, an Illinois corporation ("Company";
together with each Person joined to the Credit Agreement as a borrower from time to time, collectively the "Borrowers"
and each individually, a "Borrower"), each other Credit Party party thereto from time to time, the financial institutions
which are now or which hereafter become a party thereto (collectively, the "Lenders") and PNC BANK, NATIONAL ASSOCIATION
("PNC"), as agent for the Lenders (in such capacity, the "Agent"). Capitalized terms not otherwise
defined herein shall have the meanings provided in the Credit Agreement


 


FOR VALUE RECEIVED,
Borrowers hereby, jointly and severally, promise to pay to PNC BANK, NATIONAL ASSOCIATION ("Holder"), at the office
of Agent located at PNC Bank Center, Two Tower Center, 8th Floor, East Brunswick, New Jersey 08816 or at such other place as Agent
may from time to time designate to Borrowers in writing:


 


(i)       the
principal sum of [Six Million] and 00/100 Dollars ($[6,000,000]), payable in accordance with the provisions of the
Credit Agreement, subject to acceleration upon the occurrence of an Event of Default under the Credit Agreement and during the
continuation thereof, or earlier termination of the Credit Agreement pursuant to the terms thereof; and


 


(ii)       interest
on the unpaid principal amount of this Note from time to time outstanding until such principal amount is paid in full at the applicable
Term Loan Rate in accordance with the provisions of the Credit Agreement. In no event, however, shall interest exceed the maximum
interest rate permitted by law. Upon and after the occurrence of an Event of Default, and during the continuation thereof, at the
option of Agent and at the direction of Required Lenders (or, in the case of any Event of Default under Section 10.7, immediately
and automatically upon the occurrence of any such Event of Default without the requirement of any affirmative action by any party),
interest shall be payable at the Default Rate.


 


This Note is a Term
Note referred to in the Credit Agreement and is secured, inter alia, by the liens granted pursuant to the Credit
Agreement and the Other Documents, is entitled to the benefits of the Credit Agreement and the Other Documents and is subject
to all of the agreements, terms and conditions therein contained.


 


This Note is subject
to mandatory prepayment and may be voluntarily prepaid, in whole or in part, on the terms and conditions set forth in the Credit
Agreement.


 




     


     


    


 


If an Event of Default
under Section 10.7 of the Credit Agreement shall occur, then this Note shall immediately become due and payable, without notice,
together with reasonable attorneys' fees if the collection hereof is placed in the hands of an attorney to obtain or enforce payment
hereof to the extent provided in the Credit Agreement. If any other Event of Default shall occur under the Credit Agreement or
any of the Loan Documents, which is not cured within any applicable grace period, then this Note may, as provided in the Credit
Agreement, be declared to be immediately due and payable, without notice, together with reasonable attorneys' fees, if the collection
hereof is placed in the hands of an attorney to obtain or enforce payment hereof.


 


This Note shall be
governed by and construed in accordance with the internal laws of the State of New York.


 


Borrowers expressly
waive any presentment, demand, protest, notice of protest, or notice of any kind except as expressly provided in the Credit Agreement.


 


[Signature Page Follows]


 


 




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	BORROWER:	CTI INDUSTRIES CORPORATION,
	 	an Illinois corporation, as Borrower
	 	 	 
	 	By 	/s/ Stephen M. Merrick
	 	Name: 	Stephen M. Merrick
	 	Title:	CEO


 


Signature Page to Term Note