Exhibit 10.20

  
                     FIRST AMENDMENT TO AMENDED AND RESTATED
                           LOAN AND SECURITY AGREEMENT

         This  Agreement  is made as of August  24,  1998  among CTI  Industries
Corporation,  a Delaware corporation (the "Borrower"),  and First American Bank,
an Illinois banking  corporation (the "Bank"),  and Stephen M. Merrick,  John H.
Schwan, and Howard W. Schwan (hereinafter referred to as the "Guarantors").

         Whereas,  the  Borrower  and the Bank are  parties  to an  Amended  and
Restated  Loan and  Security  Agreement  dated as of May 1,  1998,  as it may be
amended from time to time (the "Loan Agreement"),  and the Borrower is the maker
of the First Term Loan dated May 1, 1998 payable to the order of the Bank in the
original  principal amount of $1,788,328.39  (the "First Term Note"), the Second
Term Loan dated August 22, 1996 payable to the order of the Bank in the original
principal amount of $2,128,322.80  (the "Second Term Note"), the Third Term Loan
dated May 1, 1998  payable  to the order of the Bank in the  original  principal
amount of  $2,258,000.00  (the "Third Term Note"),  and the Revolving Loan dated
May 1, 1998 payable to the order of the Bank in the original principal amount of
$4,000,000.00  (the "Revolving Note") each delivered by the Borrower to the Bank
(the first  Term  Note,  the  Second  Term  Note,  the Third Term Note,  and the
Revolving Note are hereinafter collectively referred to as the "Notes"); and

         Whereas,  the  obligations  of the Borrower are secured by, among other
things:  a  security  interest  in  all  of  Borrower's  assets  to  secure  the
obligations  of the Borrower  under this  Agreement and the First Term Loan, the
Third Term Loan,  and the Revolving  Note; a mortgage (the  "Mortgage I") on the
property  commonly  known as 22160 North  Pepper Road,  Barrington,  IL owned by
American  National Bank and Trust Company of Chicago,  not personally but solely
as Trustee,  under Trust  Agreement  dated September 19, 1984 and known as Trust
No. 61978 (the "Trust I") to secure the  obligations  of the Borrower under this
Agreement and the Second Term Note;  and a mortgage (the  "Mortgage  II") on the
property  commonly  known  as  22222  North  Pepper  Road,  Barrington,  IL (the
"Premises")  owned by the First  American  Bank,  not  personally  but solely as
Trustee,  under  Trust  Agreement  dated  August 14, 1998 and known as Trust No.
1-98-134 (the "Trust II" together with the Trust I are hereinafter  collectively
referred to as the "Trust") to secure the obligations of the Borrower under this
Agreement and the Fourth Term Note  (Mortgage I and Mortgage II are  hereinafter
collectively  referred  to as the  "Mortgage");  an  assignment  of rents on the
Premises owned by the Trust II (the  "Assignment");  a collateral  assignment of
beneficial  interest in the Trust II (the  "ABI");  and  separate  subordination
agreements executed by the Guarantors  (hereinafter  collectively referred to as
the "Subordination"); and

         Whereas, the Guarantors have guaranteed the obligations of the Borrower
to the Bank  pursuant to separate  guaranties  dated  August 22, 1996 and May 1,
1998 (hereinafter collectively referred to as the "Guaranty"); and

         Whereas, the Borrower, the Bank and the Guarantors desire to enter into
this  Agreement  in order to  increase  the amount of  indebtedness  under a new
Fourth Term Note and otherwise confirm the obligations of the Borrower under the
Loan Agreement, the Notes, the Guaranty, the Mortgage, the Assignment,  the ABI,
the  Subordination,  and  all  other  documents  and  instruments  at  any  time
evidencing,  creating,  or securing the  obligations of the Borrower to the Bank
(collectively, the "Loan Documents").

         Now, therefore,  for good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:





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         1. Defined Terms.  Capitalized  words used in this Agreement as defined
terms are used herein with the same  meanings as in the Loan  Agreement,  unless
otherwise defined herein.

         2.  Amendment to Loan  Agreement.  Section 1.1 of the Loan Agreement is
hereby amended and restated in its entirety and as amended, reads as follows:

                  1.1 Loan Amount.  Subject to and upon the terms and conditions
         set forth in this  Agreement,  the Bank agrees to lend to the Borrower,
         from time to time,  such sums as may be  requested  by the Borrower and
         which the Bank in its discretion  agrees to lend from time to time, the
         total of which  shall  not  exceed,  in the  aggregate,  $9,617,499.22,
         subject  to the  further  limits  hereinafter  set forth  (the  "Loan")
         pursuant to the First Term Loan, the Second Term Loan, Third Term Loan,
         Fourth Term Loan and the Revolving Loan hereinafter provided.

         3. Amendment to Loan  Agreement.  The first paragraph of Section 1.1 of
the Loan  Agreement  is hereby  amended  and  restated in its  entirety  and, as
amended, reads as follows:

                  1.1.6 Fourth Term Loan (Loan No. 600804665-66) The Bank agrees
         to lend to the Borrower,  subject to and upon the terms and  conditions
         set forth  herein the sum of  $1,268,000.00  herein  referred to as the
         fourth  Term Note.  The Fourth Term Note shall be  evidenced  by and be
         repayable with interest in accordance  with the terms of this Agreement
         and  promissory  note  payable to the order of the bank in the original
         amount of  $1,268,000.00  dated  August 24,  1998 and having  been duly
         executed and delivered by the Borrower ("the Fourth Term Note").

         4.  Amendment to Loan  Agreement.  Section 1.4 of the Loan Agreement is
hereby amended and restated in its entirety and, as amended, reads as follows:

                  1.4.6 Fourth Term Loan Maturity. The Fourth Term Loan shall be
         due  and  payable  in  equal  monthly  installments  of  $10,919.15  of
         principal and interest,  commencing on October 1, 1998,  and a like sum
         on the first day of each calendar month  thereafter until the principal
         of and accrued  and unpaid  interest on the Fourth Term Loan is paid in
         full, provided that the outstanding principal of and accrued and unpaid
         interest on the Fourth Term Loan, if not sooner paid in full,  shall be
         due and payable in full on September 1, 2003 (or earlier as provided in
         this Agreement or the Fourth Term Note).

         5. Delivery of Loan  Documents.  The Borrower shall execute and deliver
to the Bank the following:

                  (a) a  Fourth  Note  dated  August  24,  1998 in the  original
         principal amount of $4,500,000.00;

                  (b) an Officer's Certificate dated August 24, 1998;

                  (c)  separate  Guaranties,  each  dated  August  24,  1998 and
         executed by the Guarantors;

                  (d) a mortgage dated August 24, 1998 executed by the Trust II;

                  (e) an  assignment  of rents dated August 24, 1998 executed by
         the Trust II; and






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                  (f) a  collateral  assignment  of  beneficial  interest in the
Trust II.

         6.  Validity of  Agreements.  Except as  specifically  provided in this
Agreement,  all of the terms,  provisions,  and  covenants  of the  Borrower and
Guarantors in the Loan  Agreement,  the Notes,  and the other Loan Documents are
now and shall remain in full force and effect and have not been and shall not be
modified  in any way and are hereby  affirmed,  confirmed,  and  ratified in all
respects.  The Borrower and the Guarantors hereby  acknowledge that they have no
claims or offsets against,  or defenses or counterclaims  to, the enforcement by
the Bank of the Loan Agreement, the Notes and the Amendment, or any of the other
Loan Documents. After the date hereof, all references to "Agreement",  "hereof",
"herein",  or the like  appearing  in the Loan  Agreement  shall be deemed to be
references to the Loan Agreement as herein  amended or modified;  all references
to the "Notes" or the "First Term Note" or the "Second  Term Note" or the "Third
Term  Note"  or the  "Fourth  Term  Note"  or the  "Revolving  Note" in the Loan
Agreement,  the Notes,  or any other Loan Documents  shall be deemed to refer to
the Notes as amended by the Third  Amendment  to Amended and  Restated  Loan and
Security  Agreement  and  any  extension,  renewal,  refinancing,  modification,
amendment, or restructuring thereof.

         7.       Miscellaneous Provisions.

                  a.  This Agreement shall be governed by the  internal laws  of
the State of Illinois.

                  b.  This   Agreement   may  be   executed  in  any  number  of
counterparts,  each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.

                  c. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

                  d. This  Agreement  represents  the complete  agreement of the
parties  with  respect to the subject  matter  hereof and  supersedes  all prior
negotiations and Agreements with respect to the subject matter hereof.














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         In Witness hereof, the parties have executed this Agreement on the date
first written above.
                                        BORROWER:
                                        CTI Industries Corporation


                                        By:________________________
                                           Stephen M. Merrick,
                                           Chief Executive Officer

                                        BANK:
                                        First American Bank

                                        By:________________________ 
                                           Jodi Krass,
                                           Asst. Vice President

                                        GUARANTORS:

                                        _________________________________
                                        Stephen M. Merrick, Individually

                                        _________________________________
                                        John H. Schwan, Individually

                                        _________________________________
                                        Howard W. Schwan, Individually
 


























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