Document:

EXHIBIT 10.2

 

REVOLVING CREDIT NOTE

 

	$18,000,000	Date: December 14, 2017

 

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

 

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

 

(i)       the
principal sum of Eighteen Million and 00/100 Dollars ($18,000,000) or, if different from such amount, the unpaid principal balance
of Holder's Revolving Commitment Percentage of the Revolving Advances as may be due and owing under the Credit Agreement, payable
in accordance with the provisions of the Credit Agreement, subject to acceleration upon the occurrence of an Event of Default under
the Credit Agreement and during the continuation thereof, or earlier termination of the Credit Agreement pursuant to the terms
thereof; and

 

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

 

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

 

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

 

    	 

     

    

 

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

 

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

 

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

 

[Signature Page Follows]

 

    	 	-2-	 

     

    

 

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

 

Signature Page to Revolving Credit
NoteEXHIBIT 10.3

 

TERM NOTE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

[Signature Page Follows]

 

 

    	 	- 2 -	 

     

    

 

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

 

Signature Page to Term NoteEXHIBIT 10.4

 

Payment of the
indebtedness evidenced by this instrument or document and the rights of the holder hereof are subordinated and subject to the rights
of PNC Bank, National Association, as Agent for certain Lenders, to the extent provided in a Subordination Agreement dated as of
December 14, 2017, between payee to said lender.

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED, and subject to the
terms and conditions set forth herein, CTI Industries Corporation, an Illinois corporation (the "Maker"), hereby
unconditionally promises to pay to the order of John H. Schwan or his assigns (the "Noteholder", and together
with the Maker, the "Parties"), the principal amount of One Million Four Hundred Ninety-Eight Thousand Eight Hundred
Twenty-Two and 01/100 Dollars ($1,498,822.01) (the “Loan”) comprised of (a) One Million Ninety-Nine Thousand
Ninety and 76/100 Dollars ($1,099,090.76) on which interest shall be paid at a rate of 6% per annum, and (b) Three Hundred Ninety-Nine
Thousand Seven Hundred Thirty-One and 25/100 Dollars ($399,731.25) of existing accrued interest on which no interest shall be paid,
all as provided in this Promissory Note (the "Note", as the same may be amended, restated, supplemented or otherwise
modified from time to time in accordance with its terms).

 

1.     Definitions.
Capitalized terms used herein shall have the meanings set forth in this Section 1.

 

"Applicable Rate" means
the rate equal to Six percent (6%) per annum.

 

"Business Day" means
a day other than a Saturday, Sunday or other day on which commercial banks in Chicago, Illinois are authorized or required by law
to close.

 

"Default" means any
of the events specified in Section 6 which constitutes an Event of Default or which, upon the giving of notice, the
lapse of time, or both pursuant to Section 6 would, unless cured or waived, become an Event of Default.

 

"Default Rate" means,
at any time, the Applicable Rate plus 2%.

 

"Event of Default" has
the meaning set forth in Section 6.

 

"Governmental Authority" means
the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal
or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government (including
any supranational bodies such as the European Union or the European Central Bank).

 

     

     

    

 

"Law" as to any Person,
means any law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any Governmental Authority
and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable to or binding on such Person
or any of its properties or to which such Person or any of its properties is subject.

 

"Loan" has the meaning
set forth in the introductory paragraph.

 

"Maker" has the meaning
set forth in the introductory paragraph.

 

"Maturity Date" means
December 31, 2023.

 

"Note" has the meaning
set forth in the introductory paragraph.

 

"Noteholder" has
the meaning set forth in the introductory paragraph.

 

"Order" as to any
Person, means any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator
or a court or other Governmental Authority, in each case, applicable to or binding on such Person or any of its properties or to
which such Person or any of its properties is subject.

 

"Parties" has the
meaning set forth in the introductory paragraph.

 

"Person" means any
individual, corporation, limited liability company, trust, joint venture, association, company, limited or general partnership,
unincorporated organization, Governmental Authority or other entity.

 

“Subordination Agreement”
means that certain Subordination Agreement entered into as of December 14, 2017, among Maker, Noteholder and PNC Bank, National
Association, as Agent for certain lenders.

 

2.     Final
Payment Date; Optional Prepayments.

 

  2.1       Final
Payment Date. The aggregate unpaid principal amount of the Loan, all accrued and unpaid interest and all other amounts payable
under this Note shall be due and payable on the Maturity Date.

 

  2.2       Optional
Prepayment. Subject to the Subordination Agreement, the Maker may prepay the Loan in whole or in part at any time or from time
to time without penalty or premium by paying the principal amount to be prepaid together with accrued interest thereon to the date
of prepayment. No prepaid amount may be reborrowed.

 

    	 	 2	 

     

    

 

3.     Interest.

 

  3.1       Interest
Payment Dates. In accordance with Section 2.1, all interest accruing hereunder shall be payable monthly, subject only
to restrictions on payment under the Subordination Agreement.

 

  3.2       Default
Interest. If any amount payable hereunder is not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such overdue amount shall bear interest at the Default Rate from the date of such
non-payment until such amount is paid in full.

 

  3.3       Computation
of Interest. All computations of interest shall be made on the basis of a year of 365 days, and the actual number of days elapsed.
Interest shall accrue on the principal portion of this Note on the day on which such Loan is made, and shall not accrue on the
Loan on the day on which it is paid. Interest shall not accrue on accrued and unpaid interest.

 

4.     Payment
Mechanics.

 

  4.1       Manner
of Payment. All payments of interest and principal shall be made in lawful money of the United States of America no later than
3:00 PM Central Time on the date on which such payment is due by wire transfer of immediately available funds to the Noteholder's
account at a bank specified by the Noteholder in writing to the Maker from time to time.

 

  4.2       Business
Day. Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest payable
under this Note.

 

5.     Representations
and Warranties. The Maker hereby represents and warrants to the Noteholder on the date hereof as follows:

 

  5.1       Existence.
The Maker is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Illinois.

 

  5.2       Power
and Authority. The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform
its obligations hereunder.

 

  5.3       Authorization;
Execution and Delivery. The execution and delivery of this Note by the Maker and the performance of its obligations hereunder
have been duly authorized by all necessary corporate action in accordance with all applicable Laws. The Maker has duly executed
and delivered this Note.

 

    	 	 3	 

     

    

 

  5.4       No
Approvals. Other than consent by PNC Bank, which consent has been given subject to the Subordination Agreement, no consent
or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is
required in order for the Maker to execute, deliver, or perform any of its obligations under this Note.

 

  5.5       No
Violations. The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby
do not and will not (a) violate any provision of the Maker's organizational documents; (b) violate any Law or Order applicable
to the Maker or by which any of its properties or assets may be bound; or (c) constitute a default under any material agreement
or contract by which the Maker may be bound.

 

  5.6       Enforceability.
The Note is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its terms except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.

 

6.     Events
of Default. The occurrence of any of the following shall constitute an Event of Default hereunder:

 

  6.1       Failure
to Pay. The Maker fails to pay any monthly installment of interest accruing hereunder unless such payment would violate the
terms of the Subordination Agreement.

 

  6.2       Breach
of Representations and Warranties. Any representation or warranty made or deemed made by the Maker to the Noteholder herein
is incorrect in any material respect on the date as of which such representation or warranty was made or deemed made.

 

  6.3       Bankruptcy.
 The following shall be considered acts of bankruptcy:

 

  (a)       the
Maker commences any case, proceeding or other action (i) under any existing or future law relating to bankruptcy, insolvency, reorganization,
or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt
or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Maker makes a general assignment for the benefit of its creditors;

 

    	 	 4	 

     

    

 

(b)       there
is commenced against the Maker any case, proceeding or other action of a nature referred to in clause (a) above which (i) results
in the entry of an order for relief or any such adjudication or appointment or (ii) remains undismissed, undischarged or unbonded
for a period of 60 days;

 

(c)       there
is commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution or similar
process against all or any substantial part of its assets which results in the entry of an order for any such relief which has
not been vacated, discharged, or stayed or bonded pending appeal within 30 days from the entry thereof;

 

(d)       the
Maker takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth
in clause (a), (b) or (c) above; or

 

(e)       the
Maker is generally not, or is unable to, or admits in writing its inability to, pay its debts as they become due.

 

6.4       Default.
The Maker shall be in default under, or shall have received notice of default with respect to, any note, agreement, or instrument
to which Maker shall be a party and such notice of default shall not have been rescinded or waived within ten (10) days from the
date given.

 

7.     Remedies.
Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default, the Noteholder
may at his option, but subject to the Subordination Agreement by written notice to the Maker (a) declare the entire principal
amount of this Note, together with all accrued interest thereon and all other amounts payable hereunder, immediately due and payable
and/or (b) exercise any or all of its rights, powers or remedies under applicable law.

 

8.     Miscellaneous.

 

8.1       Notices.
 All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing
to such address as a Party may from time to time specify in writing.

 

8.2       Expenses.
The Maker shall reimburse the Noteholder on demand for all reasonable out-of-pocket costs, expenses and fees (including reasonable
expenses and fees of its counsel) incurred by the Noteholder in connection with the transactions contemplated hereby including
the negotiation, documentation and execution of this Note and the enforcement of the Noteholder's rights hereunder.

 

8.3       Governing
Law. This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon,
arising out of or relating to this Note and the transactions contemplated hereby shall be governed by the laws of the State of
Illinois.

 

    	 	 5	 

     

    

 

8.4       Submission
to Jurisdiction.  

 

(a)       The
Maker hereby irrevocably and unconditionally (i) agrees that any legal action, suit or proceeding arising out of or relating to
this Note may be brought in the courts of the State of Illinois or of the United States of America for the Northern District of
Illinois and (ii) submits to the exclusive jurisdiction of any such court in any such action, suit or proceeding. Final judgment
against the Maker in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on
the judgment.

 

(b)       Nothing
in this Section 8.4 shall affect the right of the Noteholder to (i) commence legal proceedings or otherwise sue the
Maker in any other court having jurisdiction over the Maker or (ii) serve process upon the Maker in any manner authorized by the
laws of any such jurisdiction.

 

8.5       Venue.
The Maker irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may
now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Note in any court referred
to in Section 8.4(a) and the defense of an inconvenient forum to the maintenance of such action or proceeding in
any such court.

 

8.6       Waiver
of Jury Trial. THE MAKER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY.

 

8.7       Successors
and Assigns. Subject to the terms of the Subordination Agreement, this Note may be assigned, transferred or negotiated by the
Noteholder to any Person at any time without notice to or the consent of the Maker. The Maker may not assign or transfer this Note
or any of its rights hereunder without the prior written consent of the Noteholder. This Note shall inure to the benefit of and
be binding upon the parties hereto and their permitted assigns.

 

8.8       Waiver
of Notice. The Maker hereby waives presentment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration
of maturity and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.

 

8.9       Amendments
and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the
parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.

 

    	 	 6	 

     

    

 

IN WITNESS WHEREOF, the Maker has executed
this Note as of December 14, 2017.

 

	 	CTI INDUSTRIES CORPORATION
	 	 	 
	 	By	/s/ Stephen M. Merrick
	 	 	Authorized Officer
	 	 	 
	 	Name:	Stephen M. Merrick
	 	 	 
	 	Title:	CEO

 

    	 	 7

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