Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): April 29,
2010
CTI INDUSTRIES
CORPORATION
(Exact
name of registrant as specified in its charter)
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Illinois
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0-23115
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36-2848943
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(State
or other jurisdiction of incorporation)
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(Commission File
Number)
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(IRS
Employer Identification
No.)
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22160 North Pepper Road, Lake Barrington,
IL
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60010
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (847)
382-1000
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N/A
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item No. 1.01 – Entry in to
a Material Definitive Agreement
On April 29, 2010, Registrant entered
into a Credit Agreement and associated documents with Harris N.A. (“Harris”)
under which Harris agreed to extend to Registrant a credit facility in the
aggregate amount of $14,417,000. The facility includes (i) a
Revolving Credit providing for maximum advances to Registrant, and letters of
credit, based upon the level of availability measured by the levels
of eligible receivables and inventory of Registrant of $9,000,000, (ii) an
Equipment Loan of up to $2,500,000 providing for loans for the purchase of
equipment, (iii) a Mortgage Loan of $2,333,350 and (iv) a Term Loan in the
amount of $583,333. The maturity date of the loans is April 29,
2013.
On April
30, 2010, the loan transaction was closed and loan advances were made by Harris
in the aggregate amount of $11,964,739 to pay off all balances due under loan
and lease obligations of Registrant with Charter One Bank, N.A. and RBS Asset
Finance, Inc.
The
Credit Agreement includes various representations, warranties and covenants of
Registrant, including financial covenants covering the senior leverage ratio,
fixed charge coverage ratio and tangible net worth.
In
connection with the Credit Agreement, Registrant executed and delivered to
Harris, a Term Loan Note, a Mortgage Loan Note, an Equipment Note and a
Revolving Note, as well as a form of Mortgage, Security Agreement, Pledge
Agreement (pursuant to which shares of capital stock of the Registrant’s Mexico
subsidiary were pledged as security for the loans), Patent Security Agreement
and Trademark Security Agreement. Two officers and principal
shareholders of Registrant, John H. Schwan and Stephen M. Merrick (“Guarantors”)
each executed Limited Guaranties of the loans and also executed Subordination
Agreements with respect to obligations of Registrant to them.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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CTI Industries
Corporation |
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(Registrant) |
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Date:
May 3,
2010
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By: |
/s/
Stephen M. Merrick
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Stephen
M. Merrick
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Chief
Financial Officer
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