Exhibit 10.24
THIRD AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Agreement is made as of September 1, 1998 among CTI Industries
Corporation, a Delaware corporation (the "Borrower"), and First American Bank,
an Illinois banking corporation (the "Bank"), and Xxxxxxx X. Xxxxxxx, Xxxx X.
Xxxxxx, and Xxxxxx X. Xxxxxx (hereinafter referred to as the "Guarantors").
Whereas, the Borrower and the Bank are parties to an Amended and
Restated Loan and Security Agreement dated as of May 1, 1998, as it may be
amended from time to time (the "Loan Agreement"), and the Borrower is the maker
of the First Term Loan dated May 1, 1998 payable to the order of the Bank in the
original principal amount of $1,788,328.39 (the "First Term Note"), the Second
Term Loan dated August 22, 1996 payable to the order of the Bank in the original
principal amount of $2,128,322.80 (the "Second Term Note"), the Third Term Loan
dated May 1, 1998 payable to the order of the Bank in the original principal
amount of $2,258,000.00 (the "Third Term Note"), the Fourth Term Loan dated
August 24, 1998 payable to the order of the Bank in the original principal
amount of $1,268,000.00 (the "Fourth Term Note"), and the Revolving Loan dated
May 1, 1998 payable to the order of the Bank in the original principal amount of
$4,000,000.00 (the "Revolving Note") each delivered by the Borrower to the Bank
(the first Term Note, the Second Term Note, the Third Term Note, the Fourth Term
Note and the Revolving Note are hereinafter collectively referred to as the
"Notes"); and
Whereas, the obligations of the Borrower are secured by, among other
things: a security interest in all of Borrower's assets to secure the
obligations of the Borrower under this Agreement and the First Term Loan, the
Third Term Loan, and the Revolving Note; a mortgage (the "Mortgage I") on the
property commonly known as 00000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, XX owned by
American National Bank and Trust Company of Chicago, not personally but solely
as Trustee, under Trust Agreement dated September 19, 1984 and known as Trust
No. 61978 (the "Trust I") to secure the obligations of the Borrower under this
Agreement and the Second Term Note; and a mortgage (the "Mortgage II") on the
property commonly known as 00000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, XX (the
"Premises") owned by the First American Bank, not personally but solely as
Trustee, under Trust Agreement dated August 14, 1998 and known as Trust No.
1-98-134 (the "Trust II" together with the Trust I are hereinafter collectively
referred to as the "Trust") to secure the obligations of the Borrower under this
Agreement and the Fourth Term Note (Mortgage I and Mortgage II are hereinafter
collectively referred to as the "Mortgage"); an assignment of rents on the
Premises owned by the Trust II (the "Assignment"); a collateral assignment of
beneficial interest in the Trust II (the "ABI"); and separate subordination
agreements executed by the Guarantors (hereinafter collectively referred to as
the "Subordination"); and
Whereas, the Guarantors have guaranteed the obligations of the Borrower
to the Bank pursuant to separate guaranties dated August 22, 1996, dated May 1,
1998, August 24, 1998, and September 1, 1998 (hereinafter collectively referred
to as the "Guaranty"); and
Whereas, on August 24, 1998, the Borrower and the Bank executed a First
Amendment to Amended and Restated Loan and Security Agreement whereby the Bank
extended additional indebtedness to the Borrower in the form of a Fourth Term
Note; and
-1-
Whereas, on August 28, 1998, the Borrower and the Bank executed a
Second Amendment to Amended and Restated Loan and Security Agreement whereby the
Bank changed the advance rate under Eligible Inventory; and
Whereas, the Borrower, the Bank and the Guarantors desire to enter into
this Agreement in order to increase the amount of indebtedness under the
Revolving Note, extend the maturity of the Third Term Note and otherwise confirm
the obligations of the Borrower under the Loan Agreement, the Notes, the
Guaranty, the Mortgage, the Assignment, the ABI, the Subordination, and all
other documents and instruments at any time evidencing, creating, or securing
the obligations of the Borrower to the Bank (collectively, the "Loan
Documents").
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. Capitalized words used in this Agreement as defined
terms are used herein with the same meanings as in the Loan Agreement, unless
otherwise defined herein.
2. Amendment to Loan Agreement. Section 1.1 of the Loan Agreement is
hereby amended and restated in its entirety and as amended, reads as follows:
1.1 Loan Amount. Subject to and upon the terms and conditions
set forth in this Agreement, the Bank agrees to lend to the Borrower,
from time to time, such sums as may be requested by the Borrower and
which the Bank in its discretion agrees to lend from time to time, the
total of which shall not exceed, in the aggregate, $10,663,499.22,
subject to the further limits hereinafter set forth (the "Loan")
pursuant to the First Term Loan, the Second Term Loan, Third Term Loan,
Fourth Term Loan and the Revolving Loan hereinafter provided.
3. Amendment to Loan Agreement. The first paragraph of Section 1.1.5 of
the Loan Agreement is hereby amended and restated in its entirety and, as
amended, reads as follows:
1.1.5 Revolving Loan (Loan No. 600804665-67) The Bank agrees
to lend to the Borrower, subject to and upon the terms and conditions
set forth herein, at any time or from time to time on or after the date
hereof and on or before May 1, 1999, such amounts (each such loan and
all such loans, collectively, as the context requires being herein
referred to as the "Revolving Loan") as may be requested by the
Borrower and which the Bank in its discretion agrees to lend from time
to time, subject to the limitations hereinafter set forth. Within the
limits and subject to and upon the terms and conditions herein set
forth, amounts under the Revolving Loan may be borrowed and repaid and
reborrowed from time to time. Except as otherwise permitted by the
Bank, the aggregate unpaid principal amount of the Revolving Loan
outstanding at any time shall not exceed the lesser of Four Million
Five Hundred Thousand and No/100 Dollars ($4,500,000.00) or the Advance
Limit (as hereinafter defined). The Revolving Loan shall be evidenced
by and be repayable with interest in accordance with the terms of this
Agreement and a promissory note payable to the order of the Bank in the
original principal amount of $4,000,000.00
-2-
which shall be dated on or before the initial disbursement of the
Revolving Loan and shall be duly executed and delivered by the Borrower
(the "Revolving Note"). For purposes of this Agreement, the Advance
Limit shall be equal to the sum of: (i) 80% of the Eligible Accounts
(as defined in the Loan Agreement) or $4,500,000.00, whichever is less;
(ii) for the period commencing September 1, 1998 until January 1, 1999,
30% of Eligible Inventory (as defined in the Loan Agreement) or
$2,400,000.00, whichever is less; (iii) for the period commencing
January 2, 1999 until February 1, 1999, 25% of Eligible Inventory or
$2,000,000.00, whichever is less; (iv) for the period commencing
February 2, 1999 until March 1, 1999, 20% of Eligible Inventory or
$1,600,000.00, whichever is less; and (v) for the period commencing
March 2, 1999 until maturity, 15% of Eligible Inventory or
$1,300,000.00, whichever is less.
4. Amendment to Loan Agreement. Section 1.4.3 of the Loan Agreement is
hereby amended and restated in its entirety and, as amended, reads as follows:
1.4.3 Third Term Loan Maturity. The Third Term Loan shall be
due and payable in equal monthly installments of $46,194.61 of
principal and interest, commencing on March 1, 1999, and a like sum on
the first day of each calendar month thereafter until the principal of
and accrued and unpaid interest on the Third Term Loan is paid in full,
provided that the outstanding principal of and accrued and unpaid
interest on the Third Term Loan, if not sooner paid in full, shall be
due and payable in full on February 1, 2004 (or earlier as provided in
this Agreement or the Third Term Note).
5. Delivery of Loan Documents. The Borrower shall execute and deliver
to the Bank the following:
(a) a Revolving Note dated September 1, 1998 in the original
principal amount of $4,500,000.00;
(b) a First Amendment to Third Term Note in the form attached
as Appendix A hereto providing that the Third Term Note shall be due
and payable in full on March 1, 2004 (or earlier as provided in the
First Amendment to Third Term Note, the Notes, or the Loan Agreement).
(c) an Officer's Certificate dated September 1, 1998; and
(d) separate Guaranties, each dated September 1, 1998 and
executed by the Guarantors;
6. Validity of Agreements. Except as specifically provided in this
Agreement, all of the terms, provisions, and covenants of the Borrower and
Guarantors in the Loan Agreement, the Notes, and the other Loan Documents are
now and shall remain in full force and effect and have not been and shall not be
modified in any way and are hereby affirmed, confirmed, and ratified in all
respects. The Borrower and the Guarantors hereby acknowledge that they have no
claims or offsets against, or defenses or counterclaims to, the enforcement by
the Bank of the Loan Agreement, the Notes and the Amendment, or any of the other
Loan Documents. After the date hereof, all references to "Agreement", "hereof",
"herein", or the like appearing in the Loan Agreement shall be deemed to be
-3-
references to the Loan Agreement as herein amended or modified; all references
to the "Notes" or the "First Term Note" or the "Second Term Note" or the "Third
Term Note" or the "Fourth Term Note" or the "Revolving Note" in the Loan
Agreement, the Notes, or any other Loan Documents shall be deemed to refer to
the Notes as amended by the Third Amendment to Amended and Restated Loan and
Security Agreement and any extension, renewal, refinancing, modification,
amendment, or restructuring thereof.
7. Miscellaneous Provisions.
a. This Agreement shall be governed by the internal laws of
the State of Illinois.
b. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
c. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
d. This Agreement represents the complete agreement of the
parties with respect to the subject matter hereof and supersedes all prior
negotiations and Agreements with respect to the subject matter hereof.
In Witness hereof, the parties have executed this Agreement on the date
first written above.
BORROWER:
CTI Industries Corporation
By:________________________________
Xxxxxxx X. Xxxxxxx,
Chief Executive Officer
BANK:
First American Bank
By:________________________________
Xxxx Xxxxx,
Asst. Vice President
GUARANTORS:
________________________________
Xxxxxxx X. Xxxxxxx, Individually
________________________________
Xxxx X. Xxxxxx, Individually
________________________________
Xxxxxx X. Xxxxxx, Individually
-4-
