Document:

EXHIBIT 10.5

 

	 	The securities represented by this Warrant have not been registered under the Securities Act of 1933, and thus may not be transferred unless registered under that Act or unless an exemption from registration is available.

   

	 	Warrant dated July ___, 2016, to purchase _______ Shares of Common Stock between six (6) months and three (3) years from the date hereof.

 

STOCK PURCHASE WARRANT

TO PURCHASE COMMON STOCK OF

CTI INDUSTRIES CORPORATION

 

This certifies
that, for value received,                           ,
or his assigns, is entitled to subscribe for and purchase from CTI INDUSTRIES CORPORATION, an Illinois corporation
(hereinafter called the "Company"), at a price of Seven Dollars ($7.00) per share between six (6) months and three
(3) years after the date of issuance fully paid and non-assessable shares of the Company=s
no par value common stock (hereinafter referred to as the ACommon
Stock@).

 

This Warrant is subject
to the following provisions, terms and conditions:

 

1.          Exercise;
Issuance of Certificates; Payment for Shares. The rights represented by this Warrant may be exercised by the holder hereof
at any time within the period specified above, in whole or in part (but not as to a fractional share of Common Stock), by the
surrender of this Warrant (properly endorsed if required) at the principal office of the Company (or such other office of the
Company as it may designate by notice in writing to the holder hereof at the address of such holder appearing on the books of
the Company) (a) specifying the number of shares of Common Stock being purchased and (b) accompanied by a check payable to the
Company for the purchase price for such shares. The Company agrees that the shares so purchased shall be deemed to be issued to
the holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have
been surrendered and payment made for such shares as aforesaid. Certificates for the shares so purchased shall be delivered to
the holder hereof within a reasonable time, not exceeding ten days, after the rights represented by this Warrant shall have been
so exercised, and, unless this Warrant has expired, a new Warrant of like tenor, representing the right to purchase the number
of shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be delivered to the holder
hereof within such time.

 

    	 	 	 

     

    

 

2.           Shares
to be Fully Paid; Reservation of Shares. The Company covenants and agrees:

 

(a)          that
all shares of Common Stock which may be issued upon exercise of the rights represented by this Warrant will, upon issuance, be
fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof;

 

(b)          that,
during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized,
and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of
shares of Common Stock to provide for the full exercise of the rights represented by this Warrant; and

 

(c)          that
the Company will take all such action as may be necessary to assure that the Common Stock issuable upon the exercise hereof may
be so issued without violation of any applicable law or regulation.

 

In the event any stock or securities of
the Company other than Common Stock are issuable upon the exercise hereof, the Company will take or refrain from taking any action
referred to in clauses (a) through (c) of this paragraph 2 as though such clauses apply, equally, to such other stock or securities
then issuable upon the exercise hereof.

 

3.           Closing
of Books. The Company will at no time close its transfer books against the transfer of this Warrant or of any shares of
Common Stock issued or issuable upon the exercise of this Warrant in any manner which interferes with the timely exercise of this
Warrant.

 

4.           No
Voting Rights. This Warrant shall not entitle the holder hereof to any voting rights or other rights as a stockholder of
the Company.

 

5.           Warrants
Transferable. Subject to the restrictions referred to in the legend set forth on the face of this Warrant, this Warrant
and all rights hereunder are transferable to any person, in whole or in part, without charge to the holder hereof, at the office
of the Company referred to in paragraph 1 above, by the holder hereof in person or by duly authorized attorney, upon surrender
of this Warrant properly endorsed. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant shall have been
so endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this Warrant, or to the transfer hereof on the books of
the Company, any notice to the contrary notwithstanding. Until such transfer on such books, however, the Company may treat the
registered holder hereof as the owner for all purposes.

 

6.           Warrant
Exchangeable for Different Denominations. This Warrant is exchangeable, upon its surrender by the holder hereof at the
office of the Company referred to in paragraph 1 above, for new Warrants of like tenor representing in the aggregate the right
to subscribe for and purchase the number of Shares which may be subscribed for and purchased hereunder, each of such new Warrants
to represent the right to subscribe for and purchase such number of shares as shall be designated by said holder hereof at the
time of such surrender.

 

    	 	 	 

     

    

 

7.          Descriptive
Headings; Governing Law. The descriptive headings of the several paragraphs of this Warrant are inserted for convenience
of reference only and do not constitute a part of this Warrant. This Warrant is being delivered and is intended to be performed
in the State of Illinois and shall be construed and enforced in accordance with, and the rights of the parties shall be governed
by, the laws of such state.

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to be signed by its duly authorized officers under its corporate seal and this Warrant to be
dated this ___ day of July, 2016.

 

	 	CTI INDUSTRIES CORPORATION
	 	 
	 	By:	 
	 	President

 

    	 	 	 

     

    

 

NOTICE OF EXERCISE

 

	To:	CTI Industries Corporation
	 	22160 N. Pepper Road
	 	Barrington, Illinois 60010
	 	Attention:  President

 

1.          The undersigned
hereby elects to purchase ______ shares of Common Stock of CTI Industries Corporation (the “Shares”) pursuant to the
terms of the attached Warrant.

 

2.          The
undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase
price of the shares being purchased, together with all applicable taxes, if any.

 

3.          Please
issue a certificate or certificates representing the Shares in the name of the undersigned or in such other name as is specified
below:

 

	 	 
	 	(Name)
	 	 
	 	 
	 	 
	 	 
	 	 
	 	(Address)

 

4.          The
undersigned hereby represents and warrants that the aforesaid Shares are being acquired for the account of the undersigned for
investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no
present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth
in Section 8 of the attached Warrant are true and correct as of the date hereof.

 

	 	 	 
	 	 	(Signature)
	 	 	 
	 	 	 
	 	 	(Name)
	 	 	 
	 	 	 
	(Date)	 	(Title)

 

    	 	 	 

     

    

 

ASSIGNMENT

 

FOR VALUE RECEIVED,
the undersigned hereby sells, assigns and transfers all of the rights of the undersigned under the within Warrant, with respect
to the number of shares of Common stock set forth below, unto:

 

	Name of Assignee	 	Address	 	Number of Shares
	 	 	 	 	 
	 	 	 	 	 

 

	Dated: __________________, 20_____	 	 
	 	 	 
	 	Signature	 
	 	 	 
	 	WitnessEXHIBIT
10.6

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of July __, 2016, by and among CTI Industries Corporation,
an Illinois corporation (the “Company”), and the several purchasers signatory hereto (each a “Purchaser”
and collectively, the “Purchasers”).

 

This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of the date hereof between the Company and each Purchaser (the “Purchase
Agreement”).

 

NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Company and the Purchasers agree as follows:

 

1.     
      Definitions. Capitalized terms used and not otherwise defined herein that are defined
in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the respective meanings set forth in this Section 1:

 

“Advice”
shall have the meaning set forth in Section 6(d).

 

“Affiliate”
means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common
control with, such person.

 

“Business Day”
means a day, other than a Saturday or Sunday, on which banks in Illinois are open for the general transaction of business.

 

“Closing”
has the meaning set forth in the Purchase Agreement.

 

“Closing Date”
has the meaning set forth in the Purchase Agreement.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common Stock”
means the common stock of the Company, no par value , and any securities into which such common stock may hereinafter be reclassified.

 

“Effective Date”
means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

 

“Effectiveness
Deadline” means, with respect to the Registration Statement required to be filed to cover the resale by the Holders of
the Registrable Securities, the earlier of: (i) the 90th calendar day following the Closing Date; provided, that,
if the Commission reviews and has written comments to the filed Registration Statement, then the Effectiveness Deadline under this
clause (i) shall be the 120th calendar day following the Closing Date, and (ii) the fifth (5th) Trading Day
following the date on which the Company is notified by the Commission that the Registration Statement will not be reviewed or is
no longer subject to further review and comments and the effectiveness of the Registration Statement may be accelerated; provided,
however, that if the Effective Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business,
the Effectiveness Deadline shall be extended to the next business day on which the Commission is open for business.

 

    	 

    	 

    

 

“Effectiveness
Period” shall have the meaning set forth in Section 2(b).

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Filing Deadline”
means, with respect to the Registration Statement required to be filed pursuant to Section 2(a), the 30th calendar day
following the Closing Date.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Illinois Courts”
means the state and federal courts sitting in the City of Chicago, Illinois and Cook County, Illinois.

 

“Knowledge”
means, with respect to any statement made to the knowledge of a party that is an entity, that the statement is based upon the actual
knowledge of the executive officers of such party having responsibility for the matter or matters that are the subject of the statement.

 

“Losses”
shall have the meaning set forth in Section 5(a).

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Placement Agent”
means Dougherty & Company LLC, and any permitted assigns.

 

“Principal Trading
Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading, which, as of
the Closing Date, shall be the NASDAQ Capital Market.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

 

“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated
under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.

 

“Register,”
“registered” and “registration” refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the Securities Act and pursuant to Rule 415, and the declaration or ordering of
effectiveness of such Registration Statement or document.

 

“Registrable
Securities” means all of (i) the Shares and (ii) any securities issued or issuable upon any stock split, dividend or
other distribution, recapitalization or similar event; provided, that the Holder has completed and delivered to the Company
a Selling Shareholder Questionnaire; and provided, further, that a Holder’s security shall cease to be Registrable Securities
upon the earliest to occur of the following: (A) sale pursuant to a Registration Statement or Rule 144 under the Securities Act
(in which case, only such security sold shall cease to be a Registrable Security); or (B) such security becoming eligible for sale
by the Holder pursuant to Rule 144 in a transaction in which the requirements of paragraph (c)(1) thereof do not apply.

 

    	 	2	 

     

    

 

“Registration
Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial
Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to
such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed
to be incorporated by reference in such Registration Statements.

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Selling Shareholder
Questionnaire” means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire
as may reasonably be adopted by the Company from time to time.

 

“Shares”
means the shares of Common Stock issued or issuable to the Purchasers pursuant to the Purchase Agreement but does not include Common
Stock issuable upon exercise of Warrants.

 

“Trading Day”
means (i) a day on which the Common Stock is listed or quoted and traded on its primary Trading Market (other than the OTC Bulletin
Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common
Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation
Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices); provided, that
in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean
a Business Day.

 

“Trading Market”
means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in
question.

 

“Transfer Agent”
means Registrar and Transfer Company or any successor transfer agent for the Company.

 

    	 	3	 

     

    

 

“Warrant”
means the warrant being sold together with the Shares giving the Purchaser the right to purchase Common Stock between six (6)
months and three (3) years from the date of issuance at a price of $7.00 per share.

 

		2.	Registration.

 

(a)          On
or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale
of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 (the “Initial Registration Statement”). The Initial Registration
Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on
Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act) and shall
contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex A. Notwithstanding the registration obligations set
forth in subsections (a), (b), (c) and (e) of this Section 2, in the event the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for resale on a single registration statement, the
Company agrees to promptly (i) inform each of the holders thereof and use commercially reasonable efforts to file amendments to
the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file
a new registration statement (a “New Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the Commission on Form S-3 or such other form available to register for resale
the Registrable Securities. In the event the Company amends the Initial Registration Statement or files a New Registration Statement,
as the case may be, under clauses (i) or (ii) above, the Company will use commercially reasonable efforts to file with the Commission,
as promptly as allowed by Commission or staff guidance provided to the Company or to registrants of securities in general, one
or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that
were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).

 

(b)          The
Company shall use commercially reasonable efforts to cause each Registration Statement to be declared effective by the Commission
as soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable,
no later than the Effectiveness Deadline and shall use reasonable commercial efforts to keep each Registration Statement continuously
effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders, or (ii) the date that all Registrable Securities covered by such Registration
Statement may be sold pursuant to Rule 144 in transactions in which the requirements of paragraph (c)(1) thereof do not apply,
as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s
Transfer Agent and the affected Holders, or (iii) the first anniversary of the Closing Date (the “Effectiveness Period”).
The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained
therein) shall not, to the best of Company’s knowledge, contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein, or necessary to make the statements therein (in the case any Prospectus, form of
prospectus or supplement thereto, in the light of the circumstances in which they were made) not misleading. Each Registration
Statement shall also cover, to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule
416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions
with respect to the Registrable Securities. The Company shall promptly notify the Placement Agent via facsimile or e-mail of the
effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the
Commission and shall, by 8:30 am prevailing Central time on the Trading Day after the Effective Date (as defined in the Purchase
Agreement), file a final Prospectus with the Commission pursuant to Rule 424.

 

    	 	4	 

     

    

 

(c)          Each
Holder agrees to furnish to the Company a completed and executed Selling Shareholder Questionnaire. The Company shall not be required
to include the Registrable Securities of a Holder in a Registration Statement for any Holder who fails to furnish to the Company
a fully completed and executed Selling Shareholder Questionnaire at least two Trading Days prior to the Filing Deadline, or if
sooner, five Trading Days after the Company furnishes copies of the sections of the Prospectus, as contemplated by Section 3(a).

 

(d)          The
Company shall cooperate with the Placement Agent in connection with any filing required to be made by the Placement Agent with
the Financial Industry Regulatory Authority, Inc. (“FINRA”) Corporate Financing Department pursuant to FINRA
Rule 5510(b)(10)(A)(i) with respect to the public offering contemplated by the Registration Statements (a “FINRA Filing”).
The Company shall use commercially reasonable efforts to cooperate with the Placement Agent and to assist it in pursuing the FINRA
Filing until FINRA issues a letter confirming that it does not object to the terms of the offering contemplated by the Registration
Statement.

 

(e)          In
the event that Form S-3 is not  available for the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Holders and
(ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company
shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form
S-3 covering the Registrable Securities has been declared effective by the Commission.

 

(f)          If:
(i) the Initial Registration Statement is not filed on or prior to the Filing Deadline, (ii) the Initial Registration Statement
or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective)
on or prior to its Effectiveness Deadline or (iii) after its Effective Date, such Registration Statement ceases for any reason
(including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement),
but excluding the inability of any Holder to sell the Registrable Securities covered thereby due to market conditions, to remain
continuously effective and available to the Holders as to all Registrable Securities which it is required to cover at any time
prior to the expiration of the Effectiveness Period for an aggregate of more than 20 consecutive Trading Days or for more than
an aggregate of 40 Trading Days in any 12-month period (which need not be consecutive), (any such failure or breach in clauses
(i), (ii) or (iii) above being referred to as an “Event,” and, for purposes of clauses (i) or (ii), the date
on which such Event occurs, or for purposes of clause (iii), the date which such 20 consecutive Trading Days or 40 Trading Day
period (as applicable) is exceeded, being referred to as “Event Date”), then in addition to any other rights
available to the Holders: (x) on such Event Date the Company shall pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty, equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
for any Registrable Securities then held by such Holder (which remedy shall not be exclusive of any other remedies available under
this Agreement); and (y) on each monthly anniversary of each such Event Date thereof (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated
damages and not as a penalty, equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
for any Registrable Securities then held by such Holder (which remedy shall not be exclusive of any other remedies available under
this Agreement). If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days
after the date payable, the Company will pay interest thereon at a rate of 10% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event
Date. Notwithstanding the foregoing, the maximum payment to a Holder associated with all Events in the aggregate shall not exceed
6.0% of the purchase paid by such Holder for its Registrable Securities.

 

    	 	5	 

     

    

 

		3.	Registration Procedures

 

In connection with the
Company’s registration obligations hereunder, the Company shall:

 

(a)          Not
less than five Trading Days prior to the filing of a Registration Statement or any related Prospectus that differs substantively
from the Prospectus contained in the related Registration Statement, or any amendment or supplement thereto, furnish to each Holder
copies of the “Selling Shareholders” section of such document, the “Plan of Distribution” and any risk
factor contained in such document that addresses specifically this transaction or the Holders, as proposed to be filed, which sections
will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on
the aforementioned documents within such five Trading Day period, then the Holder shall be deemed to have consented to and approved
the use of such documents). The Company shall not file a Registration Statement, any Prospectus or any amendments or supplements
thereto in which the “Selling Shareholders” section thereof substantively differs from the disclosure received from
a Holder in its Selling Shareholder Questionnaire (as amended or supplemented), except as may otherwise be required by applicable
securities law or the Commission.

 

(b)          (i)
Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the
applicable Registrable Securities for its Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented
by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly
as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment
thereto and, as promptly as reasonably possible, provide the Holders true and complete copies of all correspondence from and to
the Commission relating to such Registration Statement that pertains to the Holders as Selling Shareholders but not any comments
that would result in the disclosure to the Holders of material and non-public information concerning the Company; and (iv) comply
with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered
by each Registration Statement.

 

(c)          Notify
the Holders as promptly as reasonably possible (and, in the case of (i)(A) below, not less than three Trading Days prior to such
filing; in the case of (iii) and (iv) below, not more than one Trading Day after such issuance or receipt; in the case of (v) below,
not less than three Trading Days prior to the financial statements in any Registration Statement becoming ineligible for inclusion
therein; and in the case of (vi) below, not more than one Trading Day after the Company obtains Knowledge of such proceedings)
and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when
a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B)
when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever
the Commission comments in writing on any Registration Statement (in which case the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders that pertain to the Holders as a Selling Shareholder or to the
Plan of Distribution, but not information which the Company believes would constitute material and non-public information); and
(C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) the receipt
by the Company of any request by the Commission or any other federal or state governmental authority for amendments or supplements
to a Registration Statement or Prospectus or for additional information that pertains to the Holders as Selling Shareholders or
the Plan of Distribution; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation
of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial
statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement
or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of
prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading; and (vi) of a pending
proceeding against the Company under Section 8A of the Securities Act in connection with the offering of Registrable Securities.

 

    	 	6	 

     

    

 

(d)          Use
reasonable commercial efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, as soon as practicable.

 

(e)          If
requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each
amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that the Company shall have no obligation
to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.

 

(f)          Upon
notification by the Commission that a Registration Statement will not be reviewed or is no longer subject to further review and
comments, the Company shall request acceleration of such Registration Statement within five (5) Business Days after receipt of
such notice.

 

(g)          Prior
to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or exemption therefrom) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statements; provided, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take any action that would subject the Company to general
service of process in any jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction
where it is not then so subject.

 

(h)          If
requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates shall be free,
to the extent permitted by the Purchase Agreement and under law, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Holders may reasonably request. In connection therewith, if
required by the Transfer Agent, the Company shall promptly after the effectiveness of the Registration Statement cause an opinion
of counsel as to the effectiveness of the Registration Statement to be delivered to and maintained with its Transfer Agent, together
with any other authorizations, certificates and directions required by the Transfer Agent, which authorize and direct the Transfer
Agent to issue such Registrable Securities without legend upon sale by the holder of such shares of Registrable Securities under
the Registration Statement.

 

    	 	7	 

     

    

 

(i)          Following
the occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter
delivered, no effective Registration Statement nor Prospectus in use thereunder will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of
any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading.

 

(j)          (i)
In the time and manner required by the Principal Trading Market, prepare and file with such Trading Market an additional shares
listing application covering all of the Registrable Securities, (ii) take all steps necessary to cause such Registrable Securities
to be approved for listing on the Principal Trading Market as soon as possible thereafter, (iii) if requested by any Holder, provide
such Holder evidence of such listing, and (iv) during the Effectiveness Period, maintain the listing of such Registrable Securities
on the Principal Trading Market.

 

(k)          In
order to enable the Holders to sell Shares under Rule 144, for a period of one year from the Closing, the Company shall use its
commercially reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. The
Company further covenants that it will take such further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Person to sell Shares without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including compliance with the provisions of the Purchase
Agreement relating to the transfer of the Shares.

 

(l)          The
Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and any Affiliate thereof and as to any FINRA affiliations and of any natural persons who have
the power to vote or dispose of the Common Stock, and the Company has the right to include such information in any Registration
Statement and to otherwise provide such information to the Commission.

 

4.        
  Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance
with its obligations under this Agreement (excluding any underwriting discounts and selling commissions and all legal
fees and expenses of legal counsel, accountants and other advisors for any Holder) shall be borne by the Company whether or
not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made with the securities exchanges on which the
Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii)
messenger, telephone and delivery expenses, (iii) fees and disbursements of counsel for the Company, (iv) Securities Act
liability insurance, if the Company so desires such insurance, and (v) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with
the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions or any legal fees, accounting fees, the fees of other advisors or other
costs of the Holders.

 

    	 	8	 

     

    

 

		5.	Indemnification.

 

(a)          Indemnification
by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, agents, partners, members, managers, shareholders, Affiliates and employees of each of them, each Person
who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, partners, members, managers, shareholders, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and investigation and reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred that arise out of or are based upon: (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or any form of Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or in any preliminary prospectus
if used prior to the effective date of such Registration Statement or arising out of or relating to any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus
or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii)
any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law, or any rule
or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but
only to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed
and approved by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose), (B)
in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by a Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the
receipt by such Holder of Advice (as defined in Section 6(d) below), but only if and to the extent that following the receipt of
the Advice the misstatement or omission giving rise to such Loss would have been corrected or (C) such Loss is caused by the negligence
of a Holder; provided, however, that the indemnity agreement contained in this Section 5(a) shall not apply to amounts paid
in settlement of any Losses if such settlement is effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Each Holder shall notify the Company promptly of the institution, threat or assertion of any Proceeding
of which the Holder is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c))
and shall survive the transfer of the Registrable Securities by the Holders.

 

(b)          Indemnification
by Holders. Each Holder shall, notwithstanding any termination of this Agreement, severally and not jointly, indemnify and
hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of
or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus,
or any form of Prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission
or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of
any Prospectus, or any form of Prospectus or supplement thereto, in light of the circumstances under which they were made) not
misleading to the extent, but only to the extent that, such untrue statements or omissions are based upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and approved
by such Holder expressly for use in the Registration Statement (it being understood that the Holder has approved Annex A
hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto; provided, however,
that the indemnity agreement contained in this Section 5(b) shall not apply to amounts paid in settlement of any Losses if such
settlement is effected without the prior written consent of the Holder, which consent shall not be unreasonably withheld. In no
event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

    	 	9	 

     

    

 

(c)          Conduct
of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder
(an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable
fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject
to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

 

An Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has
agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of
such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying
Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party); provided,
that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time
for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without
its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.

 

All fees and expenses
of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred,
within twenty Trading Days of written notice thereof to the Indemnifying Party.

 

    	 	10	 

     

    

 

(d)          Contribution.
If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses
as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall
be determined under Section 6(i) by reference to, among other things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’
or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance
with its terms.

 

The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or
by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

The indemnity and contribution
agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified
Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

		6.	Miscellaneous

 

(a)          Remedies.
In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that
monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions
of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.

 

(b)          Entire
Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.
This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter, except
for, and as provided in the Transaction Documents.

 

(c)          Compliance.
Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable
to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration
Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration
Statement.

 

    	 	11	 

     

    

 

(d)          Discontinued
Disposition. Each Holder further agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 3(c)(ii)-(v), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement.
The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

(e)          Amendments
and Waivers. This Agreement may be amended only by a writing signed by all of the parties hereto. The Company may take any
action herein prohibited that pertains to or effects a Purchaser, or omit to perform any act herein required to be performed by
it that pertains to or effects a Purchaser, only if the Company shall have obtained the written consent to such amendment, action
or omission to act, of such Purchaser. No consideration shall be offered or paid to any Holder to amend or consent to a waiver
or modification of any provision of this Agreement unless the same consideration also is offered to all of the Holders. Failure
of any party to exercise any right or remedy under this Agreement or otherwise or delay by a party in exercising such right or
remedy shall not operate as a waiver thereof.

 

(f)          Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (prevailing Central time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail
to the facsimile number or e-mail addressed specified in this Section on a day that is not a Trading Day or later than 5:00 p.m.
(prevailing Central time) on any Trading Day, (iii) the Business Day following the date of mailing, if sent by nationally recognized
overnight courier service with next day delivery specified, or (iv) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as follows:

  

	If to the Company:	CTI Industries Corporation
	 	22160 N. Pepper Road
	 	Lake Barrington, Illinois 60010
	 	(847) 382-1000
	 	(847) 382-1219
	 	
        Attention: Stephen
M. Merrick, President

	 	 
	With a copy to:	Vanasco Genelly & Miller
	 	33 N. LaSalle Street, Suite 2200
	 	Chicago, Illinois 60602
	 	(312) 786-5100
	 	
        (312) 786-5111

        Attention: Gerald
M. Miller, Esq.

	 	 
	If to a Purchaser:	To the address set forth under such Purchaser’s name on the signature page hereof
	 	 
	If
to any other Person who is then the registered Holder
	To the address of such Holder as it appears in the stock transfer books of the Company or such other address as may be designated in writing hereafter, in the same manner, by such Person;

 

    	 	12	 

     

    

 

provided, that any party may change its address
for notices by providing written notice to the other parties in the manner prescribed by this Section.

 

(g)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. The rights of the Holders hereunder, including the right to have the Company register
Registrable Securities pursuant to this Agreement, may be assigned by each Holder to transferees or assignees of all or any portion
of the Registrable Securities, but only if (i) the Holder agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within
a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are being transferred or assigned, (iii) at or before
the time the Company received the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained herein and (iv) the transferee is an “accredited
investor,” as that term is defined in Rule 501 of Regulation D.

 

(h)          Execution
and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature
is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format file, such signature shall create
a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force
and effect as if such signature page were the original thereof.

 

(i)          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State of Illinois, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or
agents) will be commenced in the Illinois Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the Illinois Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any Illinois Court, or that such Proceeding has been commenced in an improper or inconvenient
forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party
in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses
incurred with the investigation preparation and prosecution of such Proceeding.

 

(j)          Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

 

    	 	13	 

     

    

 

(k)          Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.

 

(l)          Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(m)        Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement are several and
not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase Securities pursuant to the Transaction
Documents has been made independently of any other Purchaser. Nothing contained herein or in any other agreement or document delivered
at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser acknowledges
that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser
will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party
in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided with the same Agreement
for the purpose of closing a transaction with multiple Purchasers and not because it was required or requested to do so by any
Purchaser.

 

(n)          Further
Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions
as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements
herein contained.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE OF COMPANY FOLLOWS]

 

    	 	14	 

     

    

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	CTI INDUSTRIES CORPORATION
	 	 
	 	By:	 
	 	 	Timothy Patterson, Chief Financial Officer

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

    	 	15	 

     

    

 

IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first written above.

 

	 	NAME OF INVESTING ENTITY
	 	 
	 	 
	 	 
	 	AUTHORIZED SIGNATORY
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	 	ADDRESS FOR NOTICE
	 	 	 
	 	c/o:	 
	 	 	 
	 	Street:	 
	 	 	 
	 	City/State/Zip:	 
	 	 	 
	 	Attention:	 
	 	 	 
	 	Tel:	 
	 	 	 
	 	Fax:	 
	 	 	 
	 	Email:	 

 

    	 	16	 

     

    

 

Annex A

 

PLAN OF DISTRIBUTION

 

We are registering
the shares of common stock issued to the selling shareholders to permit the resale of these shares of common stock by the holders
of the shares of common stock from time to time after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling shareholders of the shares of common stock. We will bear all fees and expenses incident to our obligation
to register the shares of common stock.

 

The selling shareholders
may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling shareholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares
of common stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at
varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The Selling Shareholders may use any one or more of the following methods when selling shares:

 

		·	on any national securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale;

 

		·	in the over-the-counter market;

 

		·	in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

 

		·	through the writing of options, whether such options are listed on an options exchange or otherwise;

 

		·	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

		·	block trades in which the broker-dealer will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;

 

		·	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

		·	an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	privately negotiated transactions;

 

		·	settlement of short sales entered into after the effective date of the registration statement of
which this prospectus is a part;

 

		·	broker-dealers may agree with the selling shareholders to sell a specified number of such shares
at a stipulated price per share;

 

		·	a combination of any such methods of sale; and

 

		·	any other method permitted pursuant to applicable law.

 

The selling shareholders
may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

 

     A-1

     

    

 

Broker-dealers engaged
by the selling shareholders may arrange for other brokers-dealers to participate in sales. If the selling shareholders effect such
transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers
or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions
from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal. Such commissions
will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction
will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction
a markup or markdown in compliance with FINRA Rule 2121.01 (supplemental material) or the successor to such rules under the Financial
Industry Regulatory Authority (“FINRA”).

 

In connection with
sales of the shares of common stock or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the shares of common stock in the course of hedging
in positions they assume. The selling shareholders may also sell shares of common stock short and if such short sale shall take
place after the date that this Registration Statement is declared effective by the SEC, the selling shareholders may deliver shares
of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short
sales. The selling shareholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

 

The selling shareholders
may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time
to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the
Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee
or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate
the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.

 

The selling shareholders
and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of common stock is made, a prospectus supplement, if required, will be distributed which will set forth (i) the name of each such
selling shareholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such
the shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated
by reference in this prospectus, and (vi) other facts material to the transaction. In no event shall any broker-dealer receive
fees, commission and markups which, in the aggregate, would exceed eight percent (8%). In addition, upon the Company being notified
in writing by a Selling Shareholder that a donee or pledgee intends to sell more than 500 shares of common stock, a supplement
to this prospectus will be filed if then required in accordance with applicable securities law.

 

     A-2

     

    

 

Under the securities
laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.

 

There can be no assurance
that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement,
of which this prospectus forms a part.

 

We have advised each
selling shareholder that it may not use shares registered on the registration statement of which this prospectus is a part to cover
short sales of common stock made prior to the date on which the registration statement shall have been declared effective by the
SEC. If a selling shareholder uses this prospectus for any sale of shares of our common stock, it will be subject to the prospectus
delivery requirements of the Securities Act. The selling shareholders and any other person participating in such distribution will
be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation,
Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the
selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All
of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of common stock.

 

We will pay all expenses
of the registration of the shares of common stock pursuant to the registration rights agreement, including, without limitation,
SEC filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however,
that a selling shareholder will pay all underwriting discounts and selling commissions, if any, and any related legal expenses
incurred by it. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities
Act, in accordance with the registration rights agreements, or the selling shareholders will be entitled to contribution. We may
be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may
arise from any written information furnished to us by the selling shareholder specifically for use in this prospectus, in accordance
with the related registration rights agreements, or we may be entitled to contribution.

 

     A-3

     

    

 

Annex B

 

[COMPANY]

 

Selling Shareholder Notice and Questionnaire

 

     B-1

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