Document:

ex_174305.htm

Exhibit 10.1

 

AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT

 

This Amendment No. 1 dated as of February 24, 2020 (this “Amendment”) by and between CTI Industries Corporation, a corporation incorporated under the laws of the State of Illinois (the “Company” or “CTI”), and LF International Pte. Ltd., a Singapore company (“Buyer”), amends that certain Securities Purchase Agreement dated as of January 3, 2020 between the Company and the Buyer (the “Securities Purchase Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

 

WHEREAS, the parties wish to amend the Securities Purchase Agreement to permit an interim closing to occur prior to the satisfaction of the relevant closing conditions to, and the consummation of, the Second Closing, whereby $700,000 of the Second Tranche Purchase Price (the “Second Tranche Advance”) shall be released from the Escrow Account to purchase the Interim Shares (as defined below).

 

WHEREAS, in order to induce the Buyer to enter into this Amendment and to provide the Second Tranche Advance, the Company wishes to extend to the Buyer, and Buyer wishes to secure, the Board Appointment Right to appoint one additional Buyer Director Nominee (the “Second Buyer Director Nominee”), for which Buyer shall be entitled to all of the rights and privileges set forth in Section 5.05 of the Securities Purchase Agreement.

 

WHEREAS, as additional consideration to induce the Buyer to enter into this Amendment, the Company desires to issue to the Buyer an aggregate of 140,000 shares of Common Stock, valued at $1.00 per share (the “Inducement Shares” and, together with the Interim Shares, the “Interim Securities”).

 

NOW THEREFORE, in consideration of the premises, the mutual agreements contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned agree as follows:

 

1.      Interim Purchase and Sale. Upon satisfaction of the applicable closing conditions set forth herein, the Second Tranche Advance will be released from the Escrow Account in accordance with the Escrow Agreement, and the Company shall issue and sell to Buyer, and Buyer shall purchase from the Company (such purchase to be effected through release of the Second Tranche Advance) 70,000 Second Tranche Shares, at a purchase price of $10.00 per Share (the “Interim Shares”).

 

	 	
			2.

				
			Transactions to be Effected at the Interim Closing. 

			

 

	 	
			a.

				
			At or prior to the closing of the Interim Tranche Purchase (the “Interim Closing”):

			

 

	 	
			i.

				
			The Second Tranche Advance will be released from the Escrow Account to the Company in accordance with the Escrow Agreement; and

			

 

	 	
			ii.

				
			Buyer shall deliver to the Company all other agreements, documents, instruments or certificates that each is required to deliver, and take all actions Buyer is required to take, as may be reasonably required by the Company (without limiting the generality of the foregoing, Buyer shall execute any escrow release notice required for the release of the Second Tranche Advance under the Escrow Agreement).

			

 

 

 

 

	 	
			b.

				
			At or prior to the Interim Closing, the Company shall:

			

 

	 	
			i.

				
			deliver to Buyer stock certificates evidencing the Interim Shares, free and clear of all Encumbrances;

			

 

	 	
			ii.

				
			deliver to Buyer stock certificates evidencing the Inducement Shares, free and clear of all Encumbrances;

			

 

; and

 

	 	
			iii.

				
			deliver to Buyer all other agreements, documents, instruments or certificates that the Company is required to deliver, cause to be delivered all documents required to be delivered by advisors to the Company and take all actions the Company is required to take, as may be reasonably required by the Buyer and its counsel in their sole discretion.

			

	 	
			3.

				
			Second Buyer Director Nominee.

			

 

	 	
			a.

				
			At the earlier of (i) the Company’s upcoming 2020 annual meeting of shareholders and (ii) May 15, 2020, the Company shall cause the Additional Buyer Director Nominee (the individual whose name Buyer has submitted to the Company prior to the execution of this Amendment) to be elected to the Company Board, such that upon such election, the Company Board shall be comprised of seven directors, of which two shall be Buyer Director Nominees.

			

 

	 	
			b.

				
			Buyer shall be entitled to all of the rights and privileges set forth in Section 5.05 of the Securities Purchase Agreement as to the Second Buyer Director Nominee, subject to any pro rata adjustment, as applicable.

			

 

	 	
			c.

				
			For the avoidance of doubt, Section 5.05(iv) is hereby replaced in its entirety with the following:

			

 

	 	
			(iv)

				
			For so long as Buyer owns at least 9.9% of the voting power or equity interest in the Company’s then-outstanding capital stock, in the event there are more than seven members of the Board, Buyer shall be entitled to designate one or more additional directors (who shall be reasonably acceptable to the Company), if necessary, to ensure that the percentage of Buyer nominees serving on the Board most closely approximates the initial ratio of 2:7 board nominees designated by the Buyer relative to the total ownership percentage of the Company’s voting power then-held by the Buyer at any such time following the First Closing. For the avoidance of doubt, if at the time the Company increases the size of the Board to ten directors, Buyer holds 56% of the Company’s voting power, then Buyer will be entitled to a total of three Buyer Director Nominees.

			

 

 

 

 

4.     Use of Proceeds. For the avoidance of doubt, the net proceeds from the transactions contemplated herein shall be used in strict accordance with Section 5.12 of the Securities Purchase Agreement.

 

5.     To the extent any other provisions of the Securities Purchase Agreement need to be amended to properly reflect the revisions set forth above, such provisions are hereby so amended.     

 

6.     Except as modified and amended herein, all of the terms and conditions of the Securities Purchase Agreement shall remain in full force and effect.

 

7.     This Amendment may be executed in one or more counterparts (including facsimile counterparts), each of which shall, for all purposes, be deemed an original and all of such counterparts, taken together, shall constitute one and the same Amendment.

 

8.     This Amendment and the rights of the parties hereto shall be interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflict of laws.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

	
			 

				
			CTI INDUSTRIES CORPORATION

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By

				
			/s/ Frank J. Cesario

				
			 

			
	
			 

				
			Name:

				
			Frank J. Cesario

				
			 

			
	
			 

				
			Title:

				
			Chief Financial Officer and Chief Executive Officer

				
			 

			

 

 

	
			 

				
			LF INTERNATIONAL PTE. LTD.

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			By

				
			/s/ Yubao Li

				
			 

			
	
			 

				
			Name:

				
			Yubao Li

				
			 

			
	
			 

				
			Title:

				
			Authorized Representativecbtx_EX4_2

		
			Exhibit 4.2
		

		
			 
		

		
			DESCRIPTION OF REGISTRANT’S SECURITIES
		

		
			 
		

		
			As of December 31, 2019, CBTX, Inc. (the “Company”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Company’s common stock.
		

		
			 
		

		
			Description of Common Stock
		

		
			The following is a summary and does not describe every right, term or condition of owning the Company’s common stock. It is subject to and is qualified in its entirety by reference to the Company’s amended and restated certificate of formation (the “Certificate of Formation”) and amended and restated bylaws (the “Bylaws”). For a complete description, refer to the Certificate of Formation and the Bylaws and any applicable provisions of relevant law, including the applicable provisions of the Texas Business Organizations Code and federal law governing bank holding companies.
		

		
			General
		

		
			The Certificate of Formation authorizes the Company to issue up to 90,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share. The authorized but unissued shares of the Company’s capital stock are available for future issuance without shareholder approval, unless otherwise required by applicable law or the rules of any applicable securities exchange.
		

		
			Voting
		

		
			Each holder of the Company’s common stock is entitled to one vote for each share held of record on all matters on which shareholders generally are entitled to vote, except as otherwise required by law. The rights of the holders of the Company’s common stock to vote on certain matters may be subject to the rights and preferences of the holders of any outstanding shares of any preferred stock that the Company may issue. The Certificate of Formation expressly prohibits cumulative voting.
		

		
			Dividends and Other Distributions    
		

		
			Subject to certain regulatory restrictions and to the rights of holders of the Company’s preferred stock and any other class or series of stock having a preference as to dividends over the common shares then outstanding, dividends may be paid on the shares of common stock out of assets legally available for dividends, but only at such times and in such amounts as the Company’s board of directors (the “Board of Directors”) shall determine and declare. 
		

		
			Preemptive Rights    
		

		
			Holders of the Company’s common stock do not have preemptive or subscription rights to acquire any authorized but unissued shares of the Company’s capital stock upon any future issuance of shares.
		

		
			Liquidation Rights
		

		
			Subject to applicable law, upon any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, all holders of the Company’s common stock would be entitled to share, ratably in proportion to the number of shares held by them, in all of the Company’s remaining assets available for distribution to the Company’s shareholders after payment of creditors and subject to any prior distribution rights related to the Company’s preferred stock and any other class or series of stock having a preference over the common shares then outstanding.  The holders of the Company’s common stock have no conversion rights or other subscription rights. There are no other redemption or sinking fund provisions that are applicable to the Company’s common stock.
		

		
			
		

		
			

		 

		

			1

		

		

			 

		

		

		
			Preferred Stock Issuances
		

		
			The Certificate of Formation authorizes the Board of Directors to issue up to 10,000,000 shares of one or more series of preferred stock. The Board of Directors will have the authority to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by the Company’s shareholders. As noted herein, the preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of the Company’s common stock. 
		

		
			Certain Anti-Takeover Effects
		

		
			The Certificate of Formation and Bylaws contain certain provisions that could have an anti-takeover effect and may delay, discourage or prevent an attempted acquisition or change of control of the Company or a replacement of the incumbent Board of Directors or management of the Company. The governing documents of the Company include provisions that:
		

			
	
			
				 ·
			

			
	
			
			empower the Board of Directors, without shareholder approval, to issue preferred stock, the terms of which, including voting power, are to be set by the Board of Directors;

			
	
			
				 ·
			

			
	
			
			establish a classified Board of Directors, with directors of each class serving a three-year term;

			
	
			
				 ·
			

			
	
			
			provide that directors may only be removed from office for cause and only upon a majority shareholder vote;

			
	
			
				 ·
			

			
	
			
			eliminate cumulative voting in elections of directors;

			
	
			
				 ·
			

			
	
			
			permit the Board of Directors to alter, amend or repeal the Bylaws or to adopt new bylaws;

			
	
			
				 ·
			

			
	
			
			require the request of holders of at least 50.0% of the outstanding shares of the Company’s capital stock entitled to vote at a meeting to call a special shareholders’ meeting;

			
	
			
				 ·
			

			
	
			
			prohibit shareholder action by less than unanimous written consent, thereby requiring virtually all actions to be taken at a meeting of the shareholders;

			
	
			
				 ·
			

			
	
			
			require shareholders that wish to bring business before annual or special meetings of shareholders, or to nominate candidates for election as directors at any such annual meeting of shareholders, to provide timely notice of their intent in writing; and

			
	
			
				 ·
			

			
	
			
			enable the Board of Directors to increase, between annual meetings (no more than two vacancies), the number of persons serving as directors and to fill the vacancies created as a result of the increase by a majority vote of the directors.

		
			Classified Board of Directors
		

		
			Pursuant to the Bylaws, commencing with the annual shareholders’ meeting held in 2018, the Board of Directors has been classified into three classes, Class I, Class II and Class III, with members of each class serving a three-year term.  The Company’s four Class I directors were elected at the Company’s 2019 annual meeting for terms to expire at the 2022 annual meeting of shareholders; the terms of the Company’s four Class II directors expire at the Company’s 2020 annual meeting of shareholders; and the terms of the Company’s three Class III directors expire at the Company’s 2021 annual meeting of shareholders.
		

		
			Listing
		

		
			The Company’s common stock is listed on the NASDAQ Stock Market under the trading symbol “CBTX.”
		

		 

		

			2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}]]