EXHIBIT
10.1


 


Amendment
No. 10 

to Credit Agreement


 


This Amendment No. 10 to Credit Agreement
is dated as of July 28, 2017, but effective as of July 18, 2017, 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 (as amended, modified, or supplemented before the effective date of this agreement,
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 definition of “Mortgage Loan Final Maturity Date” in section 5.1 of the
Credit Agreement is hereby amended to read in its entirety as follows:


 


““Mortgage Loan Final Maturity
Date” means October 18, 2017, or such earlier date on which the Mortgage Loan is declared to be or becomes due pursuant
to Section 9.2 or 9.3 hereof.”


 


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


 


““Revolving Credit Termination
Date” means October 18, 2017, or such earlier date on which the Revolving Credit Commitment is terminated in whole
pursuant to Section 3.4, 9.2, or 9.3 hereof.”


 




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(c)          The
definition of “Total Funded Debt” in section 5.1 of the Credit Agreement is hereby amended to read in its entirety
as follows:


 


““Total
Funded Debt” means, at any time the same is to be determined, the aggregate of all Indebtedness for Borrowed Money
of the Borrower and its Subsidiaries, on a consolidated basis, at such time, plus all Indebtedness for Borrowed Money of any other
person or entity which is directly or indirectly guaranteed by the Borrower or any of its Subsidiaries or which the Borrower or
any of its Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Borrower
or any of its Subsidiaries has otherwise assured a creditor against loss. For purposes of this Agreement, (a) “Total
Funded Debt” includes (i) the 2016 CTI–Merrick Debt and the 2016 CTI–Schwan Debt, and (ii) subject
to clause (b)(iii) below, the BMO Mezzanine Debt, but (b) “Total Funded Debt” does not include (i) any
Excluded VIE Debt, (ii) the Subordinated Debt owing to John H. Schwan and Stephen M. Merrick described in Section 8.7(f),
or (iii) the BMO Mezzanine Debt, if any, evidenced by the BMO Mezzanine Warrant Conversion Note.”


 


(d)          Section 5.1
of the Credit Agreement is hereby further amended by inserting each of the following new definitions in the appropriate alphabetical
order:


 


“         “2017 Extension Period”
means the period from and including the Amendment No. 10 Effective Date through and including the later of the Mortgage
Loan Final Maturity Date and the Revolving Credit Termination Date.


 


“Amendment No. 10”
means an Amendment No. 10 to Credit Agreement dated as of July 28, 2017, but effective as of July 18, 2017, between
the Borrower, CTI Helium, and the Bank.


 


“Amendment No. 10
Consent and Acknowledgment” means the consent and acknowledgment described in clause (1)(C) of Section 6 of
Amendment No. 10 (which consent and acknowledgment is the “Side Letter” under and as defined in the BMO Mezzanine
NWPA, as in effect on the Amendment No. 10 Effective Date).


 


“Amendment No. 10 Effective
Date” means July 18, 2017, which is the effective date of Amendment No. 10.


 


“BMO Mezzanine Warrant”
means the “Warrant” (as defined in the BMO Mezzanine NWPA, as in effect on the Amendment No. 10 Effective
Date).


 




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“BMO Mezzanine Warrant
Conversion Note” means a promissory note issued to BMO Private Equity by the Borrower in connection with a conversion
after the Amendment No. 10 Effective Date of the BMO Mezzanine Warrant effected in accordance with (and as more particularly
described in) the Amendment No. 10 Consent and Acknowledgment and the Warrant, as deemed modified by the Amendment No. 10
Consent and Acknowledgment.”


 


(e)          Clause (e)
of section 8.7 of the Credit Agreement is hereby amended to read in its entirety as follows:


 


“              (e)          (i) the
BMO Mezzanine Debt (other than the BMO Mezzanine Debt, if any, evidenced by the BMO Mezzanine Warrant Conversion
Note), in an aggregate principal amount not to exceed $5,000,000 as of the Third Amendment Date, as reduced by permitted payments
thereon, and provided that such BMO Mezzanine Debt shall be Subordinated Debt; and (ii) the BMO Mezzanine Debt,
if any, evidenced by the BMO Mezzanine Warrant Conversion Note, in an aggregate principal amount not to exceed the original
principal amount of the BMO Mezzanine Warrant Conversion Note as of the date that the BMO Mezzanine Warrant Conversion
Note is issued, as reduced by permitted payments thereon, and provided that such BMO Mezzanine Debt shall be Subordinated
Debt;”


 


(f)          Section 8.24
of the Credit Agreement is hereby amended to read in its entirety as follows:


 


“Section 8.24         2017 Extension
Period; Engagement of Financial Consultant.


 


(a)          The
Borrower shall engage, for the duration of the 2017 Extension Period (or any shorter period approved in writing by the Bank),
at the Borrower’s expense, an independent consultant of recognized standing selected by the Borrower and reasonably acceptable
to the Bank (the “Financial Consultant”) to provide business financial planning and other advisory services
to the Borrower and its Subsidiaries.


 


(b)          Without
limitation, duplication, or derogation of Section 8.5 hereof, during the 2017 Extension Period the Borrower shall,
and shall cause each Subsidiary to, furnish to the Bank and its duly authorized representatives such information respecting the
business and financial condition of the Borrower and its Subsidiaries as the Bank may reasonably request; and without any request,
shall furnish to the Bank:


 




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(i)          as
soon as available, and in any event no later than July 20, 2017 (or any later date approved in writing by the Bank), an engagement
letter, in form and substance (including scope of work) reasonably satisfactory to the Bank, with respect to the engagement by
the Borrower of the Financial Consultant, duly executed by the Borrower and the Financial Consultant;


 


(ii)         as
soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Bank), a report,
in reasonable detail and in form reasonably satisfactory to the Bank, either prepared by the Financial Consultant or prepared by
the Borrower and verified by the Financial Consultant, and in any event certified to by the Borrower’s chief financial officer
or such other officer acceptable to the Bank, showing analyses of the following with respect to the Borrower and its Subsidiaries:
(A) revenue and profitability by customer and product line; (B) expense-reduction and margin-improvement initiatives;
and (C) working-capital improvements;


 


(iii)        as
soon as available, and in any event no later than July 31, 2017 (or any later date approved in writing by the Bank), and thereafter
as soon as available and in any event by the first Business Day of each week (unless otherwise approved in writing by the Bank),
a 13-week cash flow forecast, in reasonable detail and in form reasonably satisfactory to the Bank, showing projected cash receipts
and cash disbursements (including referencing line item sources and uses of cash) of the Borrower and its Subsidiaries over the
immediately succeeding 13-week period, together with a reconciliation of actual cash receipts and cash disbursements of the Borrower
and its Subsidiaries from the prior week against the then-current forecast of the Borrowers and its Subsidiaries (and showing any
deviations on a cumulative basis and providing a written explanation of the variances), either prepared by the Financial Consultant
or prepared by the Borrower and verified by the Financial Consultants, and in any event certified to by the Borrower’s chief
financial officer or such other officer acceptable to the Bank;


 


(iv)        as
soon as available, and in any event by the first Business Day of each week (or any later date approved in writing by the Bank),
an accounts receivable and accounts payable aging, prepared by the Borrower and certified to by its chief financial officer or
such other officer acceptable to the Bank;


 




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(v)         as
soon as available, and in any event no later than August 15, 2017 (or any later date approved in writing by the Bank), a copy
of the Borrower’s strategic plan to address before the end of the 2017 Extension Period the pending maturities of the
Loans and the BMO Mezzanine Debt, such strategic plan to be in reasonable detail prepared by the Borrower and in form reasonably
satisfactory to the Bank;


 


(vi)        as
soon as available, and in any event no later than August 31, 2017 (or any later date approved in writing by the Bank), evidence,
in form and substance satisfactory to the Bank, of the Borrower’s having taken action satisfactory to the Bank to implement
and effect the strategic plan described in clause (v) above; and


 


(vii)       as
soon as available, and in any event no later than September 15, 2017 (or any later date approved in writing by the Bank),
a collateral checklist, a perfection certificate, and updated schedules to this Agreement, each in reasonable detail and in form
and substance reasonably satisfactory to the Bank.


 


(c)          The
Borrower shall cause the management of the Borrower and its Subsidiaries to meet with the Financial Consultant and the Bank, in
person or by telephone, at such reasonable times and reasonable intervals as the Borrower may determine, but at least once per
week by telephone during the 2017 Extension Period (or less frequently as approved in writing by the Bank).”


 


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


 


3.          Fee.
As consideration for the amendments to the Credit Agreement to be effected by this agreement, the Borrower shall pay to the Bank
a fee in the amount of $7,500, which fee is fully earned upon the execution of this agreement by the Bank, due and payable upon
the execution and delivery of this agreement by the Borrower to the Bank, and nonrefundable once paid.


 


4.          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;


 




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(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:


 


(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.


 


5.          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;


 




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(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;


 


(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.


 


6.          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;


 


(B)         a
copy of an amendment to the BMO Mezzanine NWPA and each of the other documents required to be delivered in accordance with
that amendment, each in form and substance satisfactory to the Bank and duly executed by all applicable Persons;


 


(C)         a
consent and acknowledgment (including under the subordination and intercreditor agreement in respect of the BMO Mezzanine Debt),
in form and substance satisfactory to the Bank, duly executed by all applicable Persons; and


 


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


 


(2)         that
the Borrower has paid, and the Bank has received, the fee described in section 3; and


 




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


 


7.          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.


 


(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.


 




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(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. Receipt of an executed signature page to this agreement by facsimile or other electronic transmission
will constitute effective delivery of that executed signature page. Electronic records of executed Loan Documents (including this
agreement) maintained by the Bank will be deemed to be originals.


 


[Signature pages follow]


 




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The parties are signing this Amendment No. 10
to Credit Agreement effective as of the effective date stated in the introductory clause.


 


	 	CTI Industries Corporation
	 	 	 
	 	By:	/s/ John H. Schwan
	 	Name:	John H. Schwan
	 	Title:	Chairman/CEO
	 	 	 
	 	CTI Supply, Inc. (f/k/a CTI Helium, Inc.)
	 	 	 
	 	By:	/s/ John H. Schwan
	 	Name:	John H. Schwan
	 	Title:	Vice President
	 	 	 
	 	BMO Harris BANK N.A.
	 	 	 
	 	By:	/s/ Lauren M. Buysse
	 	Name:	Lauren M. Buysse
	 	Title:	Vice President


 


Signature page to Amendment No. 10 to Credit Agreement


 




     


     


    

 


Exhibit E


 


Applicable Rate


 


	Level	 	Senior
 Leverage Ratio	 	LIBOR 
 Margin	 	Base Rate
 Margin	 	Commitment
 Fee	 	Letter of
 Credit Fee
	 	I	 	 	Greater than or equal to
 3.00 to 1.00	 	 	3.50	%	 	 	1.00	%	 	 	0.25	%	 	 	2.50	%
	 	II	 	 	Less than 3.00 to 1.00
 but greater than 
2.00 to 1.00	 	 	3.25	%	 	 	0.75	%	 	 	0.25	%	 	 	2.25	%
	 	III	 	 	Less than or equal to 
 2.00 to 1.00	 	 	3.00	%	 	 	0.50	%	 	 	0.25	%	 	 	2.00	%