THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO
(i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND WHERE THE
HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER
SAID ACT IS AVAILABLE.
CTI INDUSTRIES CORPORATION
9% UNSECURED PROMISSORY NOTE
$200,000 February 15, 2003 Barrington, Illinois
FOR VALUE RECEIVED, the undersigned, CTI Industries Corporation, an Illinois corporation (the "Payor"),
having its executive offices and principal place of business at 22160 N. Pepper Road, Barrington, Illinois 60010,
hereby promises to pay to Stephen M. Merrick (the "Payee"), having an address at 422 West Rosiland Road,
Palatine, Illinois 6074, at the Payee's address set forth hereinabove or, at such other place as the Payee shall
hereafter specify in writing, the principal sum of Two Hundred Thousand Dollars ($200,000) in legal tender of the
United States of America, in the amount and on the dates hereinafter set forth.
1. Interest and Payment
1.1 Unpaid principal and interest due under this Promissory Note shall be payable in full by Payor or any
successor holder of this Promissory Note on February 15, 2005 (the "Maturity Date").
1.2 The unpaid principal amount hereof outstanding from time to time shall bear simple interest from the date
hereof at the rate of 9% per annum until the first to occur of the Maturity Date or the date on which the entire
principal balance hereof shall have been paid.
1.3 Interest shall accrue and be payable on a calendar quarterly basis during such time as any portion of the
principal amount of this Promissory Note shall be outstanding. Payments of interest shall be due and payable one
calendar quarter in arrears, on or before the fifth day of each calendar month immediately follo