EXHIBIT 10.22
THIRD TERM NOTE
$275,000.00 Elk Grove Village, Illinois
July 1, 1997
Loan No. 600804665-59
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 Two Hundred Seventy Five Thousand and No/100 Dollars
($275,000.00) on October 1, 2000 (or earlier as hereinafter provided), 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, as it has been amended from
time to time, between the Borrower and the Bank (the "Loan Agreement"), together
with interest to maturity (whether by lapse of time, acceleration, or otherwise)
on the balance of principal remaining from time to time out standing 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 as hereinafter provided or as otherwise
provided in the Loan Agreement, the principal sum outstanding shall be payable
in installments of $7,738.89 of principal per month payable on the first day of
each calendar month commencing with the month of November, 1997 and on the first
day of each succeeding month until this Note is fully paid except that the final
payment of principal, if not sooner paid, shall be due on October 1, 2000.
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 October 1, 2000. 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 and optional prepayments which shall be applied as provided in
this Note) 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
principal or interest, together with the regular installment then due.
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.
Third Term Note
Page Two
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. Any partial
prepayment made at the option of the undersigned shall be applied against the
principal amount outstanding and shall not postpone the due date of any
subsequent monthly installment or change the amount of such installment unless
the Bank shall otherwise agree in writing.
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, 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.
Attest: CTI Industries Corporation
/s/ Howard W. Schwan BY:/s/ John H. Schwan
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Howard W. Schwan John H. Schwan
Vice President Chief Executive Officer