EXHIBIT 10.19
REVOLVING NOTE
$3,000,000.00 Elk Grove Village, Illinois
August 22, 1996
Loan No. 600804665-55
FOR VALUE RECEIVED, the undersigned, CTI Industries
Corporation, a Delaware corporation (the "Borrower"), hereby promises to pay to
the order of First American Bank, an Illinois banking corporation (the "Bank"),
the principal sum of Three Million and No/100 Dollars ($3,000,000.00), or so
much thereof as may be advanced by the Bank and evidenced by this Note under the
Loan and Security Agreement dated August 19, 1996 between the Borrower and the
Bank (the "Loan Agreement"), on September 1, 1997 (or earlier as hereinafter
provided), together with interest to maturity (whether by lapse of time,
acceleration, or other wise) on the balance of principal remaining from time to
time outstanding at a fluctuating rate per annum equal to one percent (1%) per
annum over the Prime Rate announced from time to time by the Bank (which may not
be the Bank's lowest rate of interest) which shall be adjusted daily when and as
the Bank's Prime Rate changes. Interest shall be calculated on the basis of a
360-day year and actual days.
Unless accelerated or prepayable as hereinafter provided or as
otherwise provided in the Loan Agreement, the principal sum outstanding shall be
payable on September 1, 1997. Accrued interest shall be paid on the first day of
the month following the month in which the first disbursement evidenced by this
Note is made under the Loan Agreement and thereafter on the first day of each
succeeding month until this Note is fully paid, except that the final payment of
interest, if not sooner paid, shall be due on September 1, 1997. If an Event of
Default (as defined in the Loan Agreement) shall occur, the outstanding
principal of and accrued and unpaid interest on this Note shall become
immediately due and payable as provided in the Loan Agreement without notice.
All payments on account of the indebtedness evidenced by this
Note (other than required prepayments which shall be applied as provided in the
Loan Agreement) shall be applied first to accrued and unpaid interest and the
remainder to principal. Payments on this Note shall be made at the offices of
the Bank or at such other office as the legal holder of this Note may, from time
to time, designate in writing.
Notwithstanding anything to the contrary contained herein, the
undersigned agrees to pay a late charge of five percent (5%) of the amount of
any monthly installment received more than 10 days after the installment is due.
Late charges shall be due and payable on the due date of the next installment of
interest, together with the regular installment then due.
Revolving Note
Page Two
Upon and after the occurrence of an Event of Default, the
undersigned shall pay interest at the rate (the "Default Rate") of four percent
(4%) per annum over the Bank's Prime Rate then in effect, which shall be
adjusted daily when and as the Bank's Prime Rate changes.
Except as otherwise provided in the Loan Agreement, this Note
may be prepaid in whole or in part without premium or penalty at any time at the
option of the undersigned in accordance with the Loan Agreement.
This Note is secured by the Loan Agreement and other
documents, agreements, and instruments executed by the Borrower. This Note is
made and delivered pursuant to the Loan Agreement and is subject to the further
terms and conditions thereof, including the right of the holder to accelerate
payment of the principal of and accrued and unpaid interest on this Note and
other remedies upon the occurrence of an Event of Default and the required
prepayment of the principal of this Note upon certain other events or
conditions, all of which are hereby incorporated and made a part of this Note by
reference.
Any waiver of any payment due hereunder or the acceptance by
the Bank of partial payments hereunder shall not, at any other time, be taken to
be a waiver of the terms of this Note or the Loan Agreement or any other
agreement between the Borrower and the Bank.
The makers, sureties, guarantors, and endorsers of this Note,
if any, jointly and severally hereby waive notice of and consent to any and all
extensions of this Note or any part thereof without notice, and each hereby
waives demand, presentment for payment, notice of nonpayment, and protest and
any and all notice of whatever kind or nature and the exhaustion of legal
remedies herein, or any release of liability or any other indulgences or
forbearances whatsoever, without releasing or in any way affecting the personal
liability of any other party hereunder.
This Note shall be the joint and several obligation of all
makers, sureties, guarantors, and endorsers and shall be binding upon them,
their heirs, personal representatives, and assigns.
In the event the holder of this Note shall refer this Note to
an attorney for collection, the undersigned agrees to pay, in addition to unpaid
principal and interest, all of the costs and expenses incurred in attempting or
effecting collection, including reasonable attorneys' fees, whether or not suit
is instituted.
IN WITNESS WHEREOF, the undersigned has executed this Note as
of the date first written above.
CTI Industries Corporation
BY:/s/ John H. Schwan
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John H. Schwan
Chief Executive Officer
ATTEST
/s/ Howard W. Schwan
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Howard W. Schwan
Vice President