EXHIBIT 10.6
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 December 3, 1996, to
purchase 200,000 Shares of Common Stock
on or before December 31, 2002.
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, a
Delaware corporation (hereinafter called the "Company"), at a price of
Thirty-five cents ($.35) per share (subject to adjustment as set forth in
paragraph 3 below) and at any time after the date hereof to and including
December 31, 2002, 200,000 (subject to adjustment as set forth in paragraph 3
below) fully paid and non-assessable shares of the Company's common stock, par
value $.075 per share (hereinafter referred to as the "Common 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:
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(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) without limiting the generality of the foregoing, that the
Company will from time to time take all such action as may be required
to assure that the par value, if any, per share of Common Stock is at
all times equal to or less than the then effective Warrant Purchase
Price (as hereinafter defined) per share of Common Stock issuable
pursuant to this Warrant;
(c) 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;
(d) 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; and
(e) that the Company will not take any action which would
result in any adjustment of the Warrant Purchase Price if (I) the total
number of shares of Common Stock issuable after such action upon
exercise of this Warrant, together with all shares of Common Stock then
outstanding and all shares of Common Stock then issuable upon exercise
of all Options (as hereinafter defined) and upon conversion of all
Convertible Securities (as hereinafter defined) then outstanding, would
exceed (ii) the total number of shares of Common Stock then authorized
by the Company's Articles of Incorporation (all such issued and
issuable Common Stock being called the "Potentially Outstanding Common
Stock").
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 (e) of this paragraph 2 as though
such clauses apply, equally, to such other stock or securities then issuable
upon the exercise hereof.
3. Warrant Purchase Price. The provisions set forth in paragraphs 1 and
2 above are, however, subject to the following:
3.1 Adjustment of Warrant Purchase Price; Resulting Adjustment
of Number of Purchasable Shares. The initial Warrant Purchase Price of
Thirty-five Cents ($.35) per share of Common Stock shall be subject to
adjustment from time to time as hereinafter provided (such price or
such price as last adjusted pursuant to the terms hereof, as the case
may be, is herein called the "Warrant Purchase Price"). Upon each
adjustment of the Warrant Purchase Price, the holder of this Warrant
shall thereafter be entitled to purchase, at the Warrant Purchase Price
resulting from such adjustment, the number of shares of
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Common Stock obtained by multiplying the Warrant Purchase Price in
effect immediately prior to such adjustment by the number of shares of
Common Stock purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the Warrant Purchase
Price resulting from such adjustment.
3.2 Adjustment of Warrant Purchase Price Upon Issuance of
Stock. If and whenever after the date hereof the Company shall issue or
sell any shares of its Common Stock for a consideration per share less
than the Warrant Purchase Price in effect immediately prior to the time
of such issue or sale (except if such issue or sale shall be made
pursuant to the exercise of Options or Convertible Securities, as
defined below, outstanding on the date hereof), then, forthwith upon
such issue or sale, the Warrant Purchase Price shall be reduced to the
price, calculated to the nearest cent, determined by dividing (a) the
sum of (I) the number of shares of Common Stock outstanding immediately
prior to such issue or sale multiplied by the then existing Warrant
Purchase Price and (ii) the consideration, if any, received by the
Company upon such issue or sale, by (b) the total number of shares of
Common Stock outstanding immediately after such issue or sale. No
adjustment of the Warrant Purchase Price, however, shall be made in an
amount less than $0.01 per share, but any such lesser adjustment shall
be carried forward and shall be made at the time and together with the
next subsequent adjustment which together with all adjustments so
carried forward shall amount to $0.01 per share or more.
For purposes of this paragraph 3.2, the following paragraphs
3.3 to 3.15, inclusive, subject to the exception set forth above, shall
also be applicable:
3.3 Issuance of Rights or Options. In case at any time the
Company shall in any manner grant (whether directly or by assumption in
a merger or otherwise) any rights to subscribe for or to purchase, or
any options for the purchase of, Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (such
rights or options being herein called "Options" and such convertible or
exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such
Convertible Securities (determined as provided in the following
sentence) shall be less than the Warrant Purchase Price in effect
immediately prior to the time of granting of such Options, then the
maximum number of shares of Common Stock issuable upon the exercise of
all such Option or upon conversion or exchange of the total maximum
amount of such Convertible Securities shall be deemed to have been
issued for such price per share as of the date of the granting of such
Options and thereafter shall be deemed to be outstanding. The price per
share for which Common Stock is issuable, as referred to in the
preceding sentence, shall be determined by dividing (a) the sum of (I)
the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus (ii) the minimum
aggregate amount of additional consideration payable to the Company
upon the exercise of all such Options, plus (iii) in the case of all
such Options that relate to Convertible Securities, the minimum
aggregate amount of
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additional consideration, if any, payable upon the issue or sale of all
such Convertible Securities (to the extent not counted under the
immediately preceding clause (ii) and upon the conversion or exchange
of all such Convertible Securities into Common Stock, by (b) the total
maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities. The consideration received or receivable by the Company
shall in each case be determined in accordance with paragraph 3.7
below. Except a otherwise provided in paragraph 3.5 below, no
adjustment of the Warrant Purchase Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities.
3.4 Issuance of Convertible Securities. In case the Company
shall in any manner issue (whether directly or by assumption in a
merger or otherwise) or sell any Convertible Securities, whether or not
the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined as provided in the
following sentence) shall be less than the Warrant Purchase Price in
effect immediately prior to the time of such issue or sale, then the
total maximum number of shares of Common Stock issuable upon conversion
or exchange of all such Convertible Securities shall be deemed to have
been issued for such price per share as of the date of the issue or
sale of such Convertible Securities and thereafter shall be deemed to
be outstanding, provided that (a) except as otherwise provided in
paragraph 3.5 below, no adjustment of the Warrant Purchase Price shall
be made upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities, and (b) if any such issue or
sale of such Convertible Securities is made upon exercise of any
Options for which adjustments of the Warrant Purchase Price have been
or are to be made pursuant to other provisions of this paragraph 3, no
further adjustment of the Warrant Purchase Price shall be made by
reason of such issue or sale. The price per share for which Common
Stock is issuable, as referred to in the preceding sentence, shall be
determined by dividing (I) the sum of (A) the total amount received or
receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus (B) the minimum aggregate amount of
additional consideration, if any, payable upon the conversion or
exchange of such Convertible Securities into Common Stock, by (ii) the
total maximum number of shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities. The
consideration received or receivable by the Company shall in each case
be determined in accordance with paragraph 3.7 below.
3.5 Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any Option referred to in paragraph 3.3 above and still
outstanding, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
paragraph 3.3 or 3.4 above and still outstanding, or the rate at which
any such Convertible Securities are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution), the Warrant
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Purchase Price in effect at the time of such event shall forthwith be
readjusted to the Warrant Purchase Price which would have been in
effect at such time had such Options or Convertible Securities provided
for such changed purchase price, additional consideration, or
conversion rate, as the case may be, at the time initially granted,
issued, or sold. On the expiration of any Option referred to in
paragraph 3.3 above prior to the exercise thereof or the termination of
any right to convert or exchange any Convertible Securities referred to
in paragraph 3.3 or 3.4 above prior to the exercise of such right, the
Warrant Purchase Price then in effect hereunder shall forthwith be
increased to the Warrant Purchase Price which would have been in effect
at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to
such expiration or termination, never been issued, and the Common Stock
issuable thereunder shall no longer be deemed to be outstanding for the
purposes of any calculation under paragraph 3.3 or 3.4 above.
3.6 Determination of Consideration Upon Dividend or Other
Distribution. In case the Company shall declare a dividend or make any
other distribution upon any stock of the Company payable in Common
Stock, Options or Convertible Securities, any Common Stock, Options or
Convertible Securities, as the case may be, issuable in payment of such
dividend or distribution shall be deemed to have been issued or sold
without consideration.
3.7 Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, without deduction therefrom of
any expenses incurred or any reasonable underwriting commissions or
concessions paid or allowed by the Company (or deducted from amounts
received by the Company) in connection therewith. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration
other than cash received by the Company shall be deemed to be the fair
value of such consideration as determined reasonably and in good faith
by the Board of Directors of the Company, without deduction of any
expenses incurred or any reasonable underwriting commissions or
concessions paid or allowed by the Company (or deducted from amounts
received by the Company) in connection therewith. The amount of
consideration deemed to be received by the Company pursuant to issuance
and/or sale, pursuant to an established compensation plan of the
Company, to directors, officers or employees of the Company or any
subsidiary of the Company in connection with their employment of shares
of Common stock, Options or Convertible Securities, shall be increased
by the amount of any tax benefit realized by the Company as a result of
such issuance and/or sale, the amount of such tax benefit being the
amount by which the federal and/or state income or other tax liability
of the Company shall be reduced by reason of any deduction or credit in
respect of such issuance and/or sale. In case any Common Stock, Options
or Convertible Securities shall be issued in connection with any merger
or consolidation in which the Company is the surviving corporation
(other than any consolidation or merger in which the previously
outstanding shares of Common Stock of the Company shall be changed into
or exchanged for the stock or other securities
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of another corporation), the amount of consideration received therefor
shall be deemed to be the fair value as determined reasonably and in
good faith by the Board of Directors of the Company of such portion of
the assets and business of the non-surviving corporation as such Board
may determined to be attributable to such shares of Common Stock,
Options or Convertible Securities, as the case may be. In the event of
any consolidation or merger of the Company in which the Company is not
the surviving corporation or in which the previously outstanding shares
of Common Stock of the Company shall be changed into or exchanged for
the stock or other securities of another corporation, or in the event
of any sale of all or substantially all of the assets of the Company
for stock or other securities of any corporation, the Company shall be
deemed to have issued a number of shares of its Common Stock computed
on the basis of the actual exchange ratio on which the transaction was
predicated and for a consideration equal to the fair market value on
the date of such transaction of all such stock or securities of the
other corporation, and if such calculation results in adjustment of the
Warrant Purchase Price, the determination of the number of shares of
Common Stock issuable upon exercise of the Warrants immediately prior
to such merger, consolidation or sale, for purposes of paragraph 3.13
below, shall be made after giving effect to such adjustment of the
Warrant Purchase Price. In case any shares of Common Stock shall be
issued (or issuable) pursuant to any Options for the purchase of the
same, the consideration deemed to be received (or receivable) therefor
shall be deemed to be the total amount, if any, received (or total
minimum amount receivable) by the Company as consideration for the
granting of such Options, plus the aggregate amount of additional
consideration paid (or minimum amount payable) to the Company upon the
exercise of such Options. In case any shares of Common Stock shall be
issued (or issuable) upon the conversion or exchange of any Convertible
Securities, the consideration deemed to be received (or receivable)
therefor shall be deemed to be the total amount received (or total
minimum amount receivable) by the Company as consideration for the
granting of any Options to subscribe to or purchase such Convertible
Securities, plus the total amount of additional consideration paid (or
minimum amount payable) to the Company as consideration for the issue
or sale of such Convertible Securities, plus the total amount of
additional consideration, if any, paid (or minimum amount payable) to
the Company upon the conversion or exchange thereof.
3.8 Record Date. In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them to
receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares of Common
stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution.
3.9 Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by
or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common stock for the
purposes of this paragraph 3.
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3.10 Liquidating Dividends. The Company will not declare
a dividend upon Common Stock payable otherwise than out of consolidated
earnings or consolidated earned surplus, determined in accordance with
generally accepted accounting principles, including the making of
appropriate deductions for minority interests, if any, in subsidiaries,
and otherwise than in Common Stock, unless the holder of this Warrant
shall have consented to such dividend in writing.
3.11 Subdivision or Combination of Stock. In case at any time
the Company shall in any manner subdivide its outstanding shares of
Common stock into a greater number of shares or combine such shares of
Common Stock into a smaller number of shares, then the Warrant Purchase
Price in effect immediately subsequent to such subdivision or
combination shall be equal tot he product of (a) the Warrant Purchase
Price in effect immediately prior to such subdivision or combination
multiplied by (b) a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately prior to such
subdivision or combination and the denominator of which is the number
of shares of Common Stock outstanding immediately thereafter.
3.12 Reorganization, Reclassification, Consolidation, Merger
or Sale. If any reorganization or reclassification of the capital stock
of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of the
Company's assets to another corporation shall be effected in such a way
that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock,
then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provisions shall be
made whereby the holder hereof shall thereafter have the right to
purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of Common Stock of
the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, such shares of stock,
securities, or assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had such
reorganization, reclassification, consolidation, merger or sale not
taken place, and in any such case appropriate provision shall be made
with respect to the rights and interests of the holder of this Warrant
to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Warrant Purchase Price and of the
number of shares purchasable and receivable upon the exercise of this
Warrant) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of the rights represented hereby
(including an immediate adjustment, by reason of such consolidation or
merger, of the Warrant Purchase Price to the value for the Common Stock
reflected by the terms of such consolidation or merger if the value so
reflected is less than the Warrant Purchase Price in effect immediately
prior to such consolidation or merger). In the event of a merger or
consolidation of the Company with or into another corporation as a
result of which the number of shares of common stock of the surviving
corporation greater or lesser than the number of shares of Common Stock
of the Company outstanding
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immediately prior to such merger or consolidation are issuable to
holders of Common Stock of the Company, then the Warrant Purchase Price
in effect immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Company.
The Company shall not effect any such consolidation, merger, or sale,
unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger of
the corporation into or for the securities of which the previously
outstanding stock of the Company shall be exchanged in connection with
such consolidation or merger, or the corporation purchasing such
assets, as the case may be, shall assume, by written instrument
executed and mailed or delivered to the holder hereof at the last
address of such holder appearing on the books of the Company, the
obligation to deliver to such holder such shares of stock, securities,
or assets as, in accordance with the foregoing provisions, such holder
may be entitled to purchase. If a purchase, tender, or exchange offer
is made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock of the Company, the Company shall
not effect any consolidation, merger, or sale with the Person having
made such offer or with any Affiliate of such Person unless, prior to
the consummation of such consolidation, merger, or sale, the holder of
this Warrant shall have been given a reasonable opportunity to then
elect to receive either the stock, securities, or assets then issuable
upon the exercise of this Warrant. As used herein, the term "Person"
shall mean and include an individual, a partnership, a corporation, a
trust, a joint venture, an unincorporated organization, and a
government or any department or agency thereof, and an "Affiliate" of
any controlling, controlled by, or under direct or indirect common
control with, such other Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract, or otherwise. The provisions of this paragraph 3.3 governing
the substitution of another corporation for the Company shall similarly
apply to successive instances in which the corporation then deemed to
be the Company hereunder shall either sell all or substantially all of
its properties and assets to any other corporation, shall consolidate
with or merge into any other corporation, or shall be the surviving
corporation of the merger into it of any other corporation as a result
of which the holders of any of its stock or other securities shall be
deemed to have become the holders of, or shall become entitled to, the
stock or other securities of any corporation other than the corporation
at the time deemed to be the Company hereunder.
3.13 Duty to Make Fair Adjustments in Certain Cases. If any
event occurs as to which, in the opinion of the Board of Directors of
the Company, the other provisions of this paragraph 3 are not strictly
applicable or, if strictly applicable, would not fairly protect the
purchase rights of this Warrant in accordance with the essential intent
and principles hereof, the Board of Directors shall make such
adjustments in the Warrant Purchase Price as it deems necessary to
protect such purchase rights as aforesaid, but in no event shall any
such adjustment have the effect of increasing the Warrant Purchase
Price as otherwise determined pursuant to this paragraph 3.
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3.14 Notice of Adjustment. The Company shall give to the
holder of this Warrant prompt written notice of every adjustment of the
Warrant Purchase Price, by first class mail, postage prepaid, addressed
to the address of such holder as shown on the books of the Company,
which notice shall state the Warrant Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price upon the exercise of this Warrant, and
shall set forth in reasonable detail the method of calculation and the
facts upon which such calculation was based.
3.15 Other Notices. In case at any time:
(a) the Company shall declare any cash dividend upon
its Common Stock payable at a rate in excess of the rate of
the last cash dividend theretofore paid;
(b) the Company shall declare any dividend upon its
Common Stock payable in stock or make any special dividend or
other distribution (other than regular cash dividends) to the
holders of its Common Stock;
(c) the Company shall offer for subscription to the
holders of any of its Common Stock any additional shares of
stock of any class or other rights;
(d) there shall be any capital reorganization of the
Company or any reclassification of its capital stock or any
consolidation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation; or
(e) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give, by
first class mail, postage prepaid, addressed to the holder of this
Warrant at the address of such holder as shown on the books of the
Company, (i) at least 20 days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation
or winding up, at least 20 days prior written notice of the date when
the same shall take place. Any notice required by clause (i) shall also
specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of Common Stock shall be entitled
thereto, and any notice required by clause (ii) shall also specify the
date on which the holders of Common Stock shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
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4. Issue Tax. The issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the holder of
this Warrant for any issuance tax in respect thereof.
5. 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.
6. No Voting Rights. This Warrant shall not entitle the holder hereof
to any voting rights or other rights as a stockholder of the Company.
7. 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.
8. 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.
9. Descriptive Headings and 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.
10. Certain Covenants of the Company. So long as this Warrant remains
outstanding, in whole or in part, the Company will, unless the holder of this
Warrant otherwise consents in writing:
(a) within 60 days after the end of each of the first three
quarterly fiscal periods in each fiscal year of the Company, deliver to
the holder of this Warrant (i) a consolidated balance sheet of the
Company and its subsidiaries, if any, as at the end of such period, and
(ii) consolidated statements of income and of surplus of the Company
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and its subsidiaries, if any, for such period and (in the case of the
second and third such quarterly periods) for the period from the
beginning of the current fiscal year to the end of such quarterly
period, setting forth in each case in comparative form the consolidated
figures for the corresponding periods of the previous fiscal year, all
in reasonable detail and certified as prepared in accordance with
generally accepted accounting principles consistently applied, subject
to exchanges resulting from year-end audit adjustments, by the
principal financial officer of the Company; and
(b) within 90 days after the end of each fiscal year of the
Company, deliver to the holder of this Warrant (i) a consolidated
balance sheet of the Company and its subsidiaries, if any, as at the
end of such year, and (ii) consolidated statements of income and of
surplus of the Company and its subsidiaries, if any, for such year,
setting forth in each case in comparative form the consolidated figures
for the previous fiscal year, all in reasonable detail and accompanied
by an opinion thereon of independent public accountants, which opinion
shall state that such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied and that the audit by such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards; and
(c) as soon as practicable, notify the holder of this Warrant
in writing of any potentially material adverse development concerning
the Company; and permit such holder of his representative to examine
the books and records of the company at any time during regular
business hours and make copies of any portions thereof desired to be
copied by such holder or his representative.
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 ____________, 1997.
CTI INDUSTRIES CORPORATION
By:_____________________________________
President
(CORPORATE SEAL)
Attest:
- --------------------------
Secretary
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SUBSCRIPTION AGREEMENT
Dated: ______________, 199__
To: CTI Industries Corporation
22160 N. Pepper Road
Barrington, Illinois
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase shares of the Common Stock
covered by such Warrant, and makes payment herewith in full therefor at the
price per share provided by such Warrant.
Signature___________________________
Address_____________________________
____________________________________
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: __________________, 199__
Signature___________________________
Witness_____________________________
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