This document was prepared by,     and after recording, return to:          
William A. Walker, Esq.     Nisen & Elliott, LLC     200 West Adams Street,
Suite 2500     Chicago, Illinois 60606           Permanent Tax Index Number:    
      13-21-400-014   This space reserved for Recorders use only.       Property
Address:           22160 North Pepper Road     Barrington, Illinois 60010      
         

 
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS AND LEASES AND FIXTURE FILING

This MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND FIXTURE
FILING dated as of February 1, 2006 (the “Mortgage”), is executed by CTI
Industries Corporation, an Illinois corporation, 22160 North Pepper Road,
Barrington, Illinois 60010 (the “Mortgagor”), to and for the benefit of CHARTER
ONE BANK, N.A., a national banking association, its successors and assigns 71
South Wacker Drive, Suite 2900, Chicago, Illinois 60606 (the “Lender”).

RECITALS:

A.  In addition to other loans, the Lender has agreed to loan to the Mortgagor
the principal amount of Two Million Eight Hundred and No/100 Dollars
($2,800,000.00) (the “Loan”). The Loan shall be evidenced by that certain
Mortgage Note of even date herewith (as amended, restated or replaced from time
to time, the “Note”), executed by the Mortgagor and made payable to the order of
the Lender in the original principal amount of the Loan and due on January 31,
2011 (the “Maturity Date”), except as may be accelerated pursuant to the terms
hereof, of the Note or of any other document or instrument now or hereafter
given to evidence or secure the payment of the Note or delivered to induce the
Lender to disburse the proceeds of the Loan (the Note, together with such other
documents, as amended, restated or replaced from time to time, being
collectively referred to herein as the “Loan Documents”).

B.  A condition precedent to the Lender’s extension of the Loan (and other
loans) to the Mortgagor is the execution and delivery by the Mortgagor of this
Mortgage.
 

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NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Mortgagor agrees as follows:

A G R E E M E N T S:

The Mortgagor hereby mortgages, grants, assigns, remises, releases, warrants and
conveys to the Lender, its successors and assigns, and grants a security
interest in, the following described property, rights and interests (referred to
collectively herein as the “Premises”), all of which property, rights and
interests are hereby pledged primarily and on a parity with the Real Estate (as
defined below) and not secondarily:

(a)  The real estate located in the County of Lake, State of Illinois and
legally described on Exhibit “A” attached hereto and made a part hereof (the
“Real Estate”);

(b)  All improvements of every nature whatsoever now or hereafter situated on
the Real Estate, and all fixtures and personal property of every nature
whatsoever now or hereafter owned by the Mortgagor and located on, or used in
connection with the Real Estate or the improvements thereon, or in connection
with any construction thereon, including all extensions, additions,
improvements, betterments, renewals, substitutions and replacements to any of
the foregoing and all of the right, title and interest of the Mortgagor in and
to any such personal property or fixtures together with the benefit of any
deposits or payments now or hereafter made on such personal property or fixtures
by the Mortgagor or on its behalf (the “Improvements”);

(c)  All easements, rights of way, gores of real estate, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments and appurtenances whatsoever, in any way now or hereafter
belonging, relating or appertaining to the Real Estate, and the reversions,
remainders, rents, issues and profits thereof, and all the estate, right, title,
interest, property, possession, claim and demand whatsoever, at law as well as
in equity, of the Mortgagor of, in and to the same;

(d)  All rents, revenues, issues, profits, proceeds, income, royalties, Letter
of Credit Rights (as defined in the Uniform Commercial Code of the State of
Illinois (the “Code”) in effect from time to time), escrows, security deposits,
impounds, reserves, tax refunds and other rights to monies from the Premises
and/or the businesses and operations conducted by the Mortgagor thereon, to be
applied against the Indebtedness (as hereinafter defined); provided, however,
that the Mortgagor, so long as no Event of Default (as hereinafter defined) has
occurred hereunder, may collect rent as it becomes due, but not more than one
(1) month in advance thereof;

(e)  All interest of the Mortgagor in all leases now or hereafter on the
Premises, whether written or oral (each, a “Lease”, and collectively, the
“Leases”), together with all security therefor and all monies payable
thereunder, subject, however, to the conditional permission hereinabove given to
the Mortgagor to collect the rentals under any such Lease;
 
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(f)  All fixtures and articles of personal property now or hereafter owned by
the Mortgagor and forming a part of or used in connection with the Real Estate
or the Improvements, including, but without limitation, any and all air
conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs,
bidets, boilers, bookcases, cabinets, carpets, computer hardware and software
used in the operation of the Premises, coolers, curtains, dehumidifiers,
disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment,
escalators, exercise equipment, fans, fittings, floor coverings, furnaces,
furnishings, furniture, hardware, heaters, humidifiers, incinerators, lighting,
machinery, motors, ovens, pipes, plumbing, pumps, radiators, ranges,
recreational facilities, refrigerators, screens, security systems, shades,
shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall
coverings, washers, windows, window coverings, wiring, and all renewals or
replacements thereof or articles in substitution therefor, whether or not the
same are or shall be attached to the Real Estate or the Improvements in any
manner; it being mutually agreed that all of the aforesaid property owned by the
Mortgagor and placed on the Real Estate or the Improvements, so far as permitted
by law, shall be deemed to be fixtures, a part of the realty, and security for
the Indebtedness; notwithstanding the agreement hereinabove expressed that
certain articles of property form a part of the realty covered by this Mortgage
and be appropriated to its use and deemed to be realty, to the extent that such
agreement and declaration may not be effective and that any of said articles may
constitute Goods (as defined in the Code), this instrument shall constitute a
security agreement, creating a security interest in such goods, as collateral,
in the Lender, as a Secured Party, and the Mortgagor, as Debtor, all in
accordance with the Code;

(g)  All of the Mortgagor’s interests in General Intangibles, including Payment
Intangibles and Software (each as defined in the Code) now owned or hereafter
acquired and related to the Premises, including, without limitation, all of the
Mortgagor’s right, title and interest in and to: (i) all agreements, licenses,
permits and contracts to which the Mortgagor is or may become a party and which
relate to the Premises; (ii) all obligations and indebtedness owed to the
Mortgagor thereunder; (iii) all intellectual property related to the Premises;
and (iv) all choses in action and causes of action relating to the Premises;

(h)  All of the Mortgagor’s accounts now owned or hereafter created or acquired
as relate to the Premises and/or the businesses and operations conducted
thereon, including, without limitation, all of the following now owned or
hereafter created or acquired by the Mortgagor: (i) Accounts (as defined in the
Code), contract rights book debts, notes, drafts, and other obligations or
indebtedness owing to the Mortgagor arising from the sale, lease or exchange of
goods or other property and/or the performance of services; (ii) the Mortgagor’s
rights in, to and under all purchase orders for goods, services or other
property; (iii) the Mortgagor’s rights to any goods, services or other property
represented by any of the foregoing; (iv) monies due or to become due to the
Mortgagor under all contracts for the sale, lease or exchange of goods or other
property and/or the performance of services including the right to payment of
any interest or finance charges in respect thereto (whether or not yet earned by
performance on the part of the Mortgagor); (v) Securities, Investment Property,
Financial Assets and Securities Entitlements (each as defined in the Code);
(vi) proceeds of any of the foregoing and all collateral security and guaranties
of any kind given by any person or entity with respect to any of the foregoing;
and (vii) all warranties, guarantees, permits and licenses in favor of the
Mortgagor with respect to the Premises; and
 
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(i)  All proceeds of the foregoing, including, without limitation, all
judgments, awards of damages and settlements hereafter made resulting from
condemnation proceeds or the taking of the Premises or any portion thereof under
the power of eminent domain, any proceeds of any policies of insurance,
maintained with respect to the Premises or proceeds of any sale, option or
contract to sell the Premises or any portion thereof.

TO HAVE AND TO HOLD the Premises, unto the Lender, its successors and assigns,
forever, for the purposes and upon the uses herein set forth together with all
right to possession of the Premises after the occurrence of any Event of
Default; the Mortgagor hereby RELEASING AND WAIVING all rights under and by
virtue of the homestead exemption laws of the State of Illinois.

FOR THE PURPOSE OF SECURING: (i) the payment of the Loan and all interest, late
charges, interest rate swap or hedge expenses (if any), reimbursement
obligations, fees and expenses for letters of credit issued by the Lender for
the benefit of the Mortgagor, if any, and other indebtedness evidenced by or
owing under the Note, any of the other Loan Documents, and any application for
letters of credit and master letter of credit agreement, together with any
extensions, modifications, renewals or refinancings of any of the foregoing;
(ii) the other obligations and liabilities of the Mortgagor to the Lender under
and pursuant to the Loan and Security Agreement dated of even date herewith, as
amended, and the Revolving Note in the maximum principal amount of Six Million
Five Hundred Thousand and No/100 Dollars ($6,500,000.00) and Term Note in the
original principal amount of Three Million Five Hundred Thousand and No/100
Dollars ($3,500,000.00) executed in connection therewith and other documents
related thereto (collectively the “Additional Loan Documents”); (iii) the
obligations and liabilities of the Mortgagor to the Lender under and pursuant to
interest rate, currency or commodity swap agreement, cap agreement or collar
agreement, executed by and between the Mortgagor and the Lender from time to
time (collectively, “Interest Rate Agreements”), (iv) the performance and
observance of the covenants, conditions, agreements, representations, warranties
and other liabilities and obligations of the Mortgagor or any other obligor to
or benefiting the Lender which are evidenced or secured by or otherwise provided
in the Note, this Mortgage, any of the other Loan Documents or any of the
Additional Loan Documents; and (v) the reimbursement to the Lender of any and
all sums incurred, expended or advanced by the Lender pursuant to any term or
provision of or constituting additional indebtedness under or secured by this
Mortgage, any of the other Loan Documents, any of the Additional Loan Documents,
any Interest Rate Agreements or any application for letters of credit and master
letter of credit agreement, with interest thereon as provided herein or therein
(collectively, the “Indebtedness”).
 
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IT IS FURTHER UNDERSTOOD AND AGREED THAT:

1.  Title.

The Mortgagor represents, warrants and covenants that (a) the Mortgagor is the
holder of the fee simple title to the Premises, free and clear of all liens and
encumbrances, except those liens and encumbrances in favor of the Lender and as
otherwise described on Exhibit “B” attached hereto and made a part hereof (the
“Permitted Exceptions”); and (b) the Mortgagor has legal power and authority to
mortgage and convey the Premises.

2.  Maintenance, Repair, Restoration, Prior Liens, Parking.

The Mortgagor covenants that, so long as any portion of the Indebtedness remains
unpaid, the Mortgagor will:

(a)  promptly repair, restore or rebuild any Improvements now or hereafter on
the Premises which may become damaged or be destroyed to a condition
substantially similar to the condition immediately prior to such damage or
destruction, whether or not proceeds of insurance are available or sufficient
for the purpose;

(b)  keep the Premises in good condition and repair, without waste, and free
from mechanics’, materialmen’s or like liens or claims or other liens or claims
for lien (subject to the Mortgagor’s right to contest liens as permitted by the
terms of Section 28 hereof);

(c)  pay when due the Indebtedness in accordance with the terms of the Note, the
other Loan Documents and the Additional Documents and duly perform and observe
all of the terms, covenants and conditions to be observed and performed by the
Mortgagor under the Note, this Mortgage, the other Loan Documents and the
Additional Loan Documents;

(d)  pay when due any indebtedness which may be secured by a permitted lien or
charge on the Premises on a parity with, superior to or inferior to the lien
hereof, and upon request exhibit satisfactory evidence of the discharge of such
lien to the Lender (subject to the Mortgagor’s right to contest liens as
permitted by the terms of Section 28 hereof);

(e)  complete within a reasonable time any Improvements now or at any time in
the process of erection upon the Premises;

(f)  comply with all requirements of law, municipal ordinances or restrictions
and covenants of record with respect to the Premises and the use thereof;
 
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(g)  obtain and maintain in full force and effect, and abide by and satisfy the
material terms and conditions of, all material permits, licenses, registrations
and other authorizations with or granted by any governmental authorities that
may be required from time to time with respect to the performance of its
obligations under this Mortgage;

(h)  make no material alterations in the Premises or demolish any portion of the
Premises without the Lender’s prior written consent, except as required by law
or municipal ordinance;

(i)  suffer or permit no change in the use or general nature of the occupancy of
the Premises, without the Lender’s prior written consent;

(j)  pay when due all operating costs of the Premises;

(k)  not initiate or acquiesce in any zoning reclassification with respect to
the Premises, without the Lender’s prior written consent;

(l)  provide and thereafter maintain adequate parking areas within the Premises
as may be required by law, ordinance or regulation (whichever may be greater),
together with any sidewalks, aisles, streets, driveways and sidewalk cuts and
sufficient paved areas for ingress, egress and right-of-way to and from the
adjacent public thoroughfares necessary or desirable for the use thereof; and

(m)  shall comply, and shall cause the Premises at all times to be operated in
compliance, with all applicable federal, state, local and municipal
environmental, health and safety laws, statutes, ordinances, rules and
regulations, including, without limitation, Mortgagor shall (i) ensure, and
cause each of its subsidiaries to ensure, that no person who owns twenty percent
(20.00%) or more of the equity interests in the Mortgagor, or otherwise controls
the Mortgagor or any of its subsidiaries is or shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists maintained
by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury
or included in any Executive Orders, (ii) not use or permit the use of the
proceeds of the Loan to violate any of the foreign asset control regulations of
OFAC or any enabling statute or Executive Order relating thereto, and (iii)
comply, and cause each of its subsidiaries to comply, with all applicable Bank
Secrecy Act (“BSA”) laws and regulations, as amended.

3.  Payment of Taxes and Assessments.

The Mortgagor will pay when due and before any penalty attaches, all general and
special taxes, assessments, water charges, sewer charges, and other fees, taxes,
charges and assessments of every kind and nature whatsoever (all herein
generally called “Taxes”), whether or not assessed against the Mortgagor, if
applicable to the Premises or any interest therein, or the Indebtedness, or any
obligation or agreement secured hereby, subject to the Mortgagor’s right to
contest the same, as provided by the terms hereof; and the Mortgagor will, upon
written request, furnish to the Lender duplicate receipts therefor within ten
(10) days after the Lender’s request.
 
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4.  Tax Deposits.

At the Lender’s option, following an Event of Default, the Mortgagor shall
deposit with the Lender, on the first day of each month until the Indebtedness
is fully paid, a sum equal to one-twelfth (1/12th) of one hundred five percent
(105.00%) of the most recent ascertainable annual Taxes on the Premises. If
requested by the Lender, the Mortgagor shall also deposit with the Lender an
amount of money which, together with the aggregate of the monthly deposits to be
made pursuant to the preceding sentence as of one month prior to the date on
which the next installment of annual Taxes for the current calendar year become
due, shall be sufficient to pay in full such installment of annual Taxes, as
estimated by the Lender. Such deposits are to be held without any allowance of
interest and are to be used for the payment of Taxes next due and payable when
they become due. So long as no Event of Default shall exist, the Lender shall,
at its option, pay such Taxes when the same become due and payable (upon
submission of appropriate bills therefor from the Mortgagor) or shall release
sufficient funds to the Mortgagor for the payment thereof. If the funds so
deposited are insufficient to pay any such Taxes for any year (or installments
thereof, as applicable) when the same shall become due and payable, the
Mortgagor shall, within ten (10) days after receipt of written demand therefor,
deposit additional funds as may be necessary to pay such Taxes in full. If the
funds so deposited exceed the amount required to pay such Taxes for any year,
the excess shall be applied toward subsequent deposits. Said deposits need not
be kept separate and apart from any other funds of the Lender. The Lender, in
making any payment hereby authorized relating to Taxes, may do so according to
any bill, statement or estimate procured from the appropriate public office
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof.

5.  Lender’s Interest In and Use of Deposits.

Upon an Event of Default, the Lender may, at its option, apply any monies at the
time on deposit pursuant to Section 4 hereof to cure an Event of Default or to
pay any of the Indebtedness in such order and manner as the Lender may elect. If
such deposits are used to cure an Event of Default or pay any of the
Indebtedness, the Mortgagor shall immediately, upon demand by the Lender,
deposit with the Lender an amount equal to the amount expended by the Mortgagor
from the deposits. When the Indebtedness has been fully paid, any remaining
deposits shall be returned to the Mortgagor. Such deposits are hereby pledged as
additional security for the Indebtedness and shall not be subject to the
direction or control of the Mortgagor. The Lender shall not be liable for any
failure to apply to the payment of Taxes any amount so deposited unless the
Mortgagor, prior to an Event of Default, shall have requested the Lender in
writing to make application of such funds to the payment of such amounts,
accompanied by the bills for such Taxes. The Lender shall not be liable for any
act or omission taken in good faith or pursuant to the instruction of any party.
 
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6.  Insurance.

(a)  The Mortgagor shall at all times keep all buildings, improvements, fixtures
and articles of personal property now or hereafter situated on the Premises
insured against loss or damage by fire and such other hazards as may reasonably
be required by the Lender, in accordance with the terms, coverages and
provisions described on Exhibit “C” attached hereto and made a part hereof, and
such other insurance as the Lender may from time to time reasonably require.
Unless the Mortgagor provides the Lender evidence of the insurance coverages
required hereunder, the Lender may purchase insurance at the Mortgagor’s expense
to cover the Lender’s interest in the Premises. The insurance may, but need not,
protect the Mortgagor’s interest. The coverages that the Lender purchases may
not pay any claim that the Mortgagor makes or any claim that is made against the
Mortgagor in connection with the Premises. The Mortgagor may later cancel any
insurance purchased by the Lender, but only after providing the Lender with
evidence that the Mortgagor has obtained insurance as required by this Mortgage.
If the Lender purchases insurance for the Premises, the Mortgagor will be
responsible for the costs of such insurance, including, without limitation,
interest and any other charges which the Lender may impose in connection with
the placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Indebtedness. The cost of the insurance may be more than the cost of insurance
the Mortgagor may be able to obtain on its own.
 
(b)  The Mortgagor shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained hereunder
unless the Lender is included thereon as the loss payee or an additional insured
as applicable, under a standard mortgage clause acceptable to the Lender and
such separate insurance is otherwise acceptable to the Lender.
 
(c)  In the event of loss, the Mortgagor shall give prompt notice thereof to the
Lender, who, if such loss exceeds the lesser of ten percent (10.00%) of the
Indebtedness or One Hundred Thousand Dollars ($100,000) (the “Threshold”), shall
have the sole and absolute right to make proof of loss. If such loss exceeds the
Threshold or if such loss is equal to or less than the Threshold and the
conditions set forth in clauses (i), (ii) and (iii) of the immediately
succeeding subsection are not satisfied, then the Lender, solely and directly
shall receive such payment for loss from each insurance company concerned. If
and only if (i) such loss is equal to or less than the Threshold, (ii) no Event
of Default or event that with the passage of time, the giving of notice or both
would constitute an Event of Default then exists, (iii) the Lender determines
that the work required to complete the repair or restoration of the Premises
necessitated by such loss can be completed no later than six (6) months prior to
the Maturity Date, and (iv) the total of the insurance proceeds and such
additional amounts placed on deposit with the Lender by the Mortgagor for the
specific purpose of rebuilding or restoring the Improvements equals or exceeds,
in the sole and absolute discretion of the Lender, the reasonable costs of such
rebuilding or restoration, then the Lender shall endorse to the Mortgagor any
such payment and the Mortgagor may collect such payment directly. The Lender
shall have the right, at its option and in its sole discretion, to apply any
insurance proceeds received by the Lender pursuant to the terms of this section,
after the payment of all of the Lender’s expenses, either (i) on account of the
Indebtedness, irrespective of whether such principal balance is then due and
payable, whereupon the Lender may declare the whole of the balance of
Indebtedness plus any Make Whole Costs (as defined in the Note) to be due and
payable, or (ii) to the restoration or repair of the property damaged as
provided in subsection (d) below; provided, however, that the Lender hereby
agrees to permit the application of such proceeds to the restoration or repair
of the damaged property, subject to the provisions of subsection (d) below, if
(i)  the Lender has received satisfactory evidence that such restoration or
repair shall be completed no later than the date that is six (6) months prior to
the Maturity Date, and (ii) no Event of Default, then exists. If insurance
proceeds are made available to the Mortgagor by the Lender as hereinafter
provided, the Mortgagor shall repair, restore or rebuild the damaged or
destroyed portion of the Premises so that the condition and value of the
Premises are substantially the same as the condition and value of the Premises
prior to being damaged or destroyed. Any insurance proceeds applied on account
of the unpaid principal balance of the Note shall be subject to the Make Whole
Costs described in the Note. In the event of foreclosure of this Mortgage, all
right, title and interest of the Mortgagor in and to any insurance policies then
in force shall pass to the purchaser at the foreclosure sale.
 
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(d)  If insurance proceeds are made available by the Lender to the Mortgagor,
the Mortgagor shall comply with the following conditions:

(i)  Before commencing to repair, restore or rebuild following damage to, or
destruction of, all or a portion of the Premises, whether by fire or other
casualty, the Mortgagor shall obtain from the Lender its approval of all site
and building plans and specifications pertaining to such repair, restoration or
rebuilding, which approval shall not be unreasonably withheld or delayed.

(ii)  Prior to each payment or application of any insurance proceeds to the
repair or restoration of the improvements upon the Premises to the extent
permitted in subsection (c) above (which payment or application may be made, at
the Lender’s option, through an escrow, the terms and conditions of which are
satisfactory to the Lender and the cost of which is to be borne by the
Mortgagor), the Lender shall be satisfied as to the following:

(A)  no Event of Default has occurred;

(B)  either such Improvements have been fully restored, or the expenditure of
money as may be received from such insurance proceeds will be sufficient to
repair, restore or rebuild the Premises, free and clear of all liens, claims and
encumbrances, except the lien of this Mortgage and the Permitted Exceptions, or,
if such insurance proceeds shall be insufficient to repair, restore and rebuild
the Premises, the Mortgagor has deposited with the Lender such amount of money
which, together with the insurance proceeds shall be sufficient to restore,
repair and rebuild the Premises; and
 
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(C)  prior to each disbursement of any such proceeds, the Lender shall be
furnished with a statement of the Lender’s architect (the cost of which shall be
borne by the Mortgagor), certifying the extent of the repair and restoration
completed to the date thereof, and that such repairs, restoration, and
rebuilding have been performed to date in conformity with the plans and
specifications approved by the Lender and with all statutes, regulations or
ordinances (including building and zoning ordinances) affecting the Premises;
and the Lender shall be furnished with appropriate evidence of payment for labor
or materials furnished to the Premises, and total or partial lien waivers
substantiating such payments.

(iii)  If the Mortgagor shall fail to restore, repair or rebuild the
Improvements within a time reasonably deemed satisfactory by the Lender, then
the Lender, at its option, may (A) commence and perform all necessary acts to
restore, repair or rebuild the said Improvements for or on behalf of the
Mortgagor, or (B) declare an Event of Default. If insurance proceeds shall
exceed the amount necessary to complete the repair, restoration or rebuilding of
the Improvements, such excess shall be applied on account of the Indebtedness
irrespective of whether such Indebtedness is then due and payable without
payment of any premium or penalty.

7.  Condemnation.

If all or any part of the Premises are damaged, taken or acquired, either
temporarily or permanently, in any condemnation proceeding, or by exercise of
the right of eminent domain, the amount of any award or other payment for such
taking or damages made in consideration thereof, to the extent of the full
amount of the remaining unpaid Indebtedness, is hereby assigned to the Lender,
who is empowered to collect and receive the same and to give proper receipts
therefor in the name of the Mortgagor and the same shall be paid forthwith to
the Lender. Such award or monies shall be applied on account of the
Indebtedness, irrespective of whether such Indebtedness is then due and payable
and, at any time from and after the taking the Lender may declare the whole of
the balance of the Indebtedness plus any Make Whole Costs to be due and payable.
Notwithstanding the provisions of this section to the contrary, if any
condemnation or taking of less than the entire Premises occurs and provided that
no Event of Default then exists, and if such partial condemnation, in the
reasonable discretion of the Lender, has no material adverse effect on the
operation or value of the Premises, then the award or payment for such taking or
consideration for damages resulting therefrom may be collected and received by
the Mortgagor, and the Lender hereby agrees that in such event it shall not
declare the Indebtedness to be due and payable, if it is not otherwise then due
and payable.

8.  Stamp Tax.

If, by the laws of the United States of America, or of any state or political
subdivision having jurisdiction over the Mortgagor, any tax is due or becomes
due in respect of the execution and delivery of this Mortgage, the Note, any of
the other Loan Documents, or any of the Additional Loan Documents, the Mortgagor
shall pay such tax in the manner required by any such law. The Mortgagor further
agrees to reimburse the Lender for any sums which the Lender may expend by
reason of the imposition of any such tax. Notwithstanding the foregoing, the
Mortgagor shall not be required to pay any income or franchise taxes of the
Lender.
 
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9.   Intentionally Omitted.

10.  Effect of Extensions of Time and Other Changes.

If the payment of the Indebtedness or any part thereof is extended or varied, if
any part of any security for the payment of the Indebtedness is released, if the
rate of interest charged under the Note is changed or if the time for payment
thereof is extended or varied, all persons now or at any time hereafter liable
therefor, or interested in the Premises or having an interest in the Mortgagor,
shall be held to assent to such extension, variation, release or change and
their liability and the lien and all of the provisions hereof shall continue in
full force, any right of recourse against all such persons being expressly
reserved by the Lender, notwithstanding such extension, variation, release or
change.

11.  Effect of Changes in Laws Regarding Taxation.

If any law is enacted after the date hereof requiring (a) the deduction of any
lien on the Premises from the value thereof for the purpose of taxation or
(b) the imposition upon the Lender of the payment of the whole or any part of
the Taxes, charges or liens herein required to be paid by the Mortgagor, or
(c) a change in the method of taxation of mortgages or debts secured by
mortgages or the Lender’s interest in the Premises, or the manner of collection
of taxes, so as to affect this Mortgage or the Indebtedness or the holders
thereof, then the Mortgagor, upon demand by the Lender, shall pay such Taxes or
charges, or reimburse the Lender therefor; provided, however, that the Mortgagor
shall not be deemed to be required to pay any income or franchise taxes of the
Lender. Notwithstanding the foregoing, if in the opinion of counsel for the
Lender it is or may be unlawful to require the Mortgagor to make such payment or
the making of such payment might result in the imposition of interest beyond the
maximum amount permitted by law, then the Lender may declare all of the
Indebtedness to be immediately due and payable.

12.  Lender’s Performance of Defaulted Acts and Expenses Incurred by Lender.

If an Event of Default has occurred, the Lender may, but need not, make any
payment or perform any act herein required of the Mortgagor in any form and
manner deemed expedient by the Lender, and may, but need not, make full or
partial payments of principal or interest on prior encumbrances, if any, and
purchase, discharge, compromise or settle any tax lien or other prior lien or
title or claim thereof, or redeem from any tax sale or forfeiture affecting the
Premises or consent to any tax or assessment or cure any default of the
Mortgagor in any lease of the Premises. All monies paid for any of the purposes
herein authorized and all expenses paid or incurred in connection therewith,
including reasonable attorneys’ fees, and any other monies advanced by the
Lender in regard to any tax referred to in Section 8 above or to protect the
Premises or the lien hereof, shall be so much additional Indebtedness, and shall
become immediately due and payable by the Mortgagor to the Lender, upon demand,
and with interest thereon accruing from the date of such demand until paid at
the Default Rate (as defined in the Note). In addition to the foregoing, any
costs, expenses and fees, including reasonable attorneys’ fees, incurred by the
Lender in connection with (a) sustaining the lien of this Mortgage or its
priority, (b) protecting or enforcing any of the Lender’s rights hereunder,
(c) recovering any Indebtedness, (d) any litigation or proceedings affecting the
Note, this Mortgage, any of the other Loan Documents, any of the Additional Loan
Documents or the Premises, including without limitation, bankruptcy and probate
proceedings, or (e)  preparing for the commencement, defense or participation in
any threatened litigation or proceedings affecting the Note, this Mortgage, any
of the other Loan Documents, any of the Additional Loan Documents or the
Premises, shall be so much additional Indebtedness, and shall become immediately
due and payable by the Mortgagor to the Lender, upon demand, and with interest
thereon accruing from the date of such demand until paid at the Default Rate.
The interest accruing under this section shall be immediately due and payable by
the Mortgagor to the Lender, and shall be additional Indebtedness evidenced by
the Note and secured by this Mortgage. The Lender’s failure to act shall never
be considered as a waiver of any right accruing to the Lender on account of any
Event of Default. Should any amount paid out or advanced by the Lender
hereunder, or pursuant to any agreement executed by the Mortgagor in connection
with the Loan, be used directly or indirectly to pay off, discharge or satisfy,
in whole or in part, any lien or encumbrance upon the Premises or any part
thereof, then the Lender shall be subrogated to any and all rights, equal or
superior titles, liens and equities, owned or claimed by any owner or holder of
said outstanding liens, charges and indebtedness, regardless of whether said
liens, charges and indebtedness are acquired by assignment or have been released
of record by the holder thereof upon payment.
 
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13.  Security Agreement.

The Mortgagor and the Lender agree that this Mortgage shall constitute a
Security Agreement within the meaning of the Code with respect to (a) all sums
at any time on deposit for the benefit of the Mortgagor or held by the Lender
(whether deposited by or on behalf of the Mortgagor or anyone else) pursuant to
any of the provisions of this Mortgage or the other Loan Documents, and (b) with
respect to any personal property included in the granting clauses of this
Mortgage, which personal property may not be deemed to be affixed to the
Premises or may not constitute a “Fixture” (within the meaning of
Section 9-102(41) of the Code and which property is hereinafter referred to as
“Personal Property”), and all replacements of, substitutions for, additions to,
and the proceeds thereof, and the “Supporting Obligations” (as defined in the
Code) (all of said Personal Property and the replacements, substitutions and
additions thereto and the proceeds thereof being sometimes hereinafter
collectively referred to as “Collateral”), and that a security interest in and
to the Collateral is hereby granted to the Lender, and the Collateral and all of
the Mortgagor’s right, title and interest therein are hereby assigned to the
Lender, all to secure payment of the Indebtedness. All of the provisions
contained in this Mortgage pertain and apply to the Collateral as fully and to
the same extent as to any other property comprising the Premises; and the
following provisions of this section shall not limit the applicability of any
other provision of this Mortgage but shall be in addition thereto:

(a)  The Mortgagor (being the Debtor as that term is used in the Code) is and
will be the true and lawful owner of the Collateral, subject to no liens,
charges or encumbrances other than the lien hereof, other liens and encumbrances
benefiting the Lender and no other party, and liens and encumbrances, if any,
expressly permitted by the Loan Documents or the Additional Loan Documents.
 
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(b)  The Collateral is to be used by the Mortgagor solely for business purposes.

(c)  The Collateral will be kept at the Real Estate and, except for Obsolete
Collateral (as hereinafter defined), will not be removed therefrom without the
consent of the Lender (being the Secured Party as that term is used in the
Code). The Collateral may be affixed to the Real Estate but will not be affixed
to any other real estate.

(d)  The only persons having any interest in the Premises are the Mortgagor, the
Lender and holders of interests, if any, expressly permitted hereby.

(e)  No Financing Statement (other than Financing Statements showing the Lender
as the sole secured party, or with respect to liens or encumbrances, if any,
expressly permitted hereby) covering any of the Collateral or any proceeds
thereof is on file in any public office except pursuant hereto; and the
Mortgagor, at its own cost and expense, upon demand, will furnish to the Lender
such further information and will execute and deliver to the Lender such
financing statements and other documents in form satisfactory to the Lender and
will do all such acts as the Lender may request at any time or from time to time
or as may be necessary or appropriate to establish and maintain a perfected
security interest in the Collateral as security for the Indebtedness, subject to
no other liens or encumbrances, other than liens or encumbrances benefiting the
Lender and no other party, and liens and encumbrances (if any) expressly
permitted hereby; and the Mortgagor will pay the cost of filing or recording
such financing statements or other documents, and this instrument, in all public
offices wherever filing or recording is deemed by the Lender to be desirable.
The Mortgagor hereby irrevocably authorizes the Lender at any time, and from
time to time, to file in any jurisdiction any initial financing statements and
amendments thereto, without the signature of the Mortgagor that (i) indicate the
Collateral (A) is comprised of all assets of the Mortgagor or words of similar
effect, regardless of whether any particular asset comprising a part of the
Collateral falls within the scope of Article 9 of the Uniform Commercial Code of
the jurisdiction wherein such financing statement or amendment is filed, or (B)
as being of an equal or lesser scope or within greater detail as the grant of
the security interest set forth herein, and (ii) contain any other information
required by Section 5 of Article 9 of the Uniform Commercial Code of the
jurisdiction wherein such financing statement or amendment is filed regarding
the sufficiency or filing office acceptance of any financing statement or
amendment, including (A) whether the Mortgagor is an organization, the type of
organization and any organizational identification number issued to the
Mortgagor, and (B) in the case of a financing statement filed as a fixture
filing or indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of the real property to which the Collateral relates.
The Mortgagor agrees to furnish any such information to the Lender promptly upon
request. The Mortgagor further ratifies and affirms its authorization for any
financing statements and/or amendments thereto, executed and filed by the Lender
in any jurisdiction prior to the date of this Mortgage. In addition, the
Mortgagor shall make appropriate entries on its books and records disclosing the
Lender’s security interests in the Collateral.
 
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(f)  Upon an Event of Default hereunder, the Lender shall have the remedies of a
secured party under the Code, including, without limitation, the right to take
immediate and exclusive possession of the Collateral, or any part thereof, and
for that purpose, so far as the Mortgagor can give authority therefor, with or
without judicial process, may enter (if this can be done without breach of the
peace) upon any place which the Collateral or any part thereof may be situated
and remove the same therefrom (provided that if the Collateral is affixed to
real estate, such removal shall be subject to the conditions stated in the
Code); and the Lender shall be entitled to hold, maintain, preserve and prepare
the Collateral for sale, until disposed of, or may propose to retain the
Collateral subject to the Mortgagor’s right of redemption in satisfaction of the
Mortgagor’s obligations, as provided in the Code. The Lender may render the
Collateral unusable without removal and may dispose of the Collateral on the
Premises. The Lender may require the Mortgagor to assemble the Collateral and
make it available to the Lender for its possession at a place to be designated
by the Lender which is reasonably convenient to both parties. The Lender will
give the Mortgagor at least ten (10) days notice of the time and place of any
public sale of the Collateral or of the time after which any private sale or any
other intended disposition thereof is made. The requirements of reasonable
notice shall be met if such notice is mailed, by certified United States mail or
equivalent, postage prepaid, to the address of the Mortgagor hereinafter set
forth at least ten (10) days before the time of the sale or disposition. The
Lender may buy at any public sale. The Lender may buy at private sale if the
Collateral is of a type customarily sold in a recognized market or is of a type
which is the subject of widely distributed standard price quotations. Any such
sale may be held in conjunction with any foreclosure sale of the Premises. If
the Lender so elects, the Premises and the Collateral may be sold as one lot.
The net proceeds realized upon any such disposition, after deduction for the
expenses of retaking, holding, preparing for sale, selling and the reasonable
attorneys’ fees and legal expenses incurred by the Lender, shall be applied
against the Indebtedness in such order or manner as the Lender shall select. The
Lender will account to the Mortgagor for any surplus realized on such
disposition.

(g)  The terms and provisions contained in this section, unless the context
otherwise requires, shall have the meanings and be construed as provided in the
Code.

(h)  This Mortgage is intended to be a financing statement within the purview of
Section 9-502(b) of the Code with respect to the Collateral and the goods
described herein, which goods are or may become fixtures relating to the
Premises. The addresses of the Mortgagor (Debtor) and the Lender (Secured Party)
are herein set forth. This Mortgage is to be filed for recording with the
Recorder of Deeds of the county or counties where the Premises are located. The
Mortgagor is the record owner of the Premises.
 
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(i)  To the extent permitted by applicable law, the security interest created
hereby is specifically intended to cover all Leases between the Mortgagor or its
agents as lessor, and various tenants named therein, as lessee, including all
extended terms and all extensions and renewals of the terms thereof, as well as
any amendments to or replacement of said Leases, together with all of the right,
title and interest of the Mortgagor, as lessor thereunder.

(j)  The Mortgagor represents and warrants that: (i) the Mortgagor is the record
owner of the Premises; (ii) the Mortgagor’s chief executive office is located in
the State of Illinois; (iii) the Mortgagor’s state of incorporation is the State
of Illinois; and (iv) the Mortgagor’s exact legal name is as set forth on Page 1
of this Mortgage.

(k)  The Mortgagor hereby agrees that: (i) where Collateral is in possession of
a third party, the Mortgagor will join with the Lender in notifying the third
party of the Lender’s interest and obtaining an acknowledgment from the third
party that it is holding the Collateral for the benefit of the Lender; (ii) the
Mortgagor will cooperate with the Lender in obtaining control with respect to
Collateral consisting of: deposit accounts, investment property, letter of
credit rights and electronic chattel paper; and (iii) until the Indebtedness is
paid in full, Mortgagor will not change the state where it is located or change
its name or form of organization without giving the Lender at least thirty (30)
days prior written notice in each instance.

14.  Restrictions on Transfer.

(a)  The Mortgagor, without the prior written consent of the Lender, shall not
effect, suffer or permit any Prohibited Transfer (as defined herein). Any
conveyance, sale, assignment, transfer, lien, pledge, mortgage, security
interest or other encumbrance or alienation (or any agreement to do any of the
foregoing) of any of the following properties or interests shall constitute a
“Prohibited Transfer”:

(i)  The Premises or any part thereof or interest therein, excepting only sales
or other dispositions of Collateral (“Obsolete Collateral”) no longer useful in
connection with the operation of the Premises, provided that prior to the sale
or other disposition thereof, such Obsolete Collateral has been replaced by
Collateral of at least equal value and utility which is subject to the lien
hereof with the same priority as with respect to the Obsolete Collateral;

(ii)  The majority of the shares of capital stock of a corporate Mortgagor, a
corporation which is a general partner or managing member/manager in a
partnership or limited liability company Mortgagor, or a corporation which is
the owner of substantially all of the capital stock of any corporation described
in this subsection (other than the shares of capital stock of a corporate
trustee or a corporation whose stock is publicly traded on a national securities
exchange or on the National Association of Securities Dealers’ Automated
Quotation System);
 
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(iii)  All or any substantial part of the operating assets of the Mortgagor
outside of the ordinary course of business; or

(iv)  If there shall be any change in control (by way of transfers of stock,
partnership or member interests or otherwise) in any partner, member, manager or
shareholder, as applicable, which directly or indirectly controls the day to day
operations and management of the Mortgagor and/or owns a controlling interest in
the Mortgagor;

in each case whether any such conveyance, sale, assignment, transfer, lien,
pledge, mortgage, security interest, encumbrance or alienation is effected
directly, indirectly (including the nominee agreement), voluntarily or
involuntarily, by operation of law or otherwise; provided, however, that the
foregoing provisions of this section shall not apply (i) to liens securing the
Indebtedness, (ii) to the lien of current taxes and assessments not in default,
(iii) to any transfers of the Premises, or part thereof, or interest therein, or
any beneficial interests, or shares of stock or partnership or joint venture
interests, as the case may be, by or on behalf of an owner thereof who is
deceased or declared judicially incompetent, to such owner’s heirs, legatees,
devisees, executors, administrators, estate or personal representatives, or (iv)
to leases permitted by the terms of the Loan Documents or Additional Loan
Documents, if any.

(b)  In determining whether or not to make the Loan, the Lender evaluated the
background and experience of the Mortgagor and its officers in owning and
operating property such as the Premises, found it acceptable and relied and
continues to rely upon same as the means of maintaining the value of the
Premises which is the Lender’s security for the Note. The Mortgagor and its
officers are well experienced in borrowing money and owning and operating
property such as the Premises, were ably represented by a licensed attorney at
law in the negotiation and documentation of the Loan and bargained at arm’s
length and without duress of any kind for all of the terms and conditions of the
Loan, including this provision. The Mortgagor recognizes that the Lender is
entitled to keep its loan portfolio at current interest rates by either making
new loans at such rates or collecting assumption fees and/or increasing the
interest rate on a loan, the security for which is purchased by a party other
than the original Mortgagor. The Mortgagor further recognizes that any secondary
junior financing placed upon the Premises (i) may divert funds which would
otherwise be used to pay the Note; (ii) could result in acceleration and
foreclosure by any such junior encumbrancer which would force the Lender to take
measures and incur expenses to protect its security; (iii) would detract from
the value of the Premises should the Lender come into possession thereof with
the intention of selling same; and (iv) would impair the Lender’s right to
accept a deed in lieu of foreclosure, as a foreclosure by the Lender would be
necessary to clear the title to the Premises. In accordance with the foregoing
and for the purposes of (a) protecting the Lender’s security, both of repayment
and of value of the Premises; (b) giving the Lender the full benefit of its
bargain and contract with the Mortgagor; (c) allowing the Lender to raise the
interest rate and collect assumption fees; and (d) keeping the Premises free of
subordinate financing liens, the Mortgagor agrees that if this section is deemed
a restraint on alienation, that it is a reasonable one.

15.  Intentionally Omitted.

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16.  Events of Default; Acceleration.

Each of the following shall constitute an “Event of Default” for purposes of
this Mortgage:

(a)  The Mortgagor fails to pay within five (5) days after the date when any
such payment is due in accordance with the terms hereof or thereof (i) any
installment of principal or interest payable pursuant to the terms of the Note,
or (ii) any other amount payable to Lender under the Note, this Mortgage, any of
the other Loan Documents or any of the Additional Loan Documents;

(b)  The Mortgagor fails to perform or cause to be performed any other
obligation or observe any other condition, covenant, term, agreement or
provision required to be performed or observed by the Mortgagor under the Note,
this Mortgage, any of the other Loan Documents or any of the Additional Loan
Documents; provided, however, that if such failure by its nature can be cured,
then so long as the continued operation and safety of the Premises, and the
priority, validity and enforceability of the liens created by the Mortgage or
any of the other Loan Documents and the value of the Premises are not impaired,
threatened or jeopardized, then the Mortgagor shall have a period (the “Cure
Period”) of thirty (30) days after the Mortgagor obtains actual knowledge of
such failure or receives written notice of such failure to cure the same and an
Event of Default shall not be deemed to exist during the Cure Period, provided
further that if the Mortgagor commences to cure such failure during the Cure
Period and is diligently and in good faith attempting to effect such cure, the
Cure Period shall be extended for thirty (30) additional days, but in no event
shall the Cure Period be longer than sixty (60) days in the aggregate;

(c)  the existence of any inaccuracy or untruth in any material respect in any
certification, representation or warranty contained in this Mortgage, any of the
other Loan Documents or any of the Additional Loan Documents or of any statement
or certification as to facts delivered to the Lender by the Mortgagor;

(d)  The Mortgagor files a voluntary petition in bankruptcy or is adjudicated a
bankrupt or insolvent or files any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal, state, or other
statute or law, or seeks or consents to or acquiesces in the appointment of any
trustee, receiver or similar officer of the Mortgagor or of all or any
substantial part of the property of the Mortgagor, the Premises or all or a
substantial part of the assets of the Mortgagor are attached, seized, subjected
to a writ or distress warrant or are levied upon unless the same is released or
located within thirty (30) days;

(e)  the commencement of any involuntary petition in bankruptcy against the
Mortgagor or the institution against the Mortgagor of any reorganization,
arrangement, composition, readjustment, dissolution, liquidation or similar
proceedings under any present or future federal, state or other statute or law,
or the appointment of a receiver, trustee or similar officer for all or any
substantial part of the property of the Mortgagor which shall remain undismissed
or undischarged for a period of sixty (60) days;
 
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(f)  the dissolution, termination or merger of the Mortgagor;

(g)  the occurrence of a Prohibited Transfer;

(h)  the occurrence of an Event of Default under the Note, any of the other Loan
Documents or any of the Additional Loan Documents; or

(i)  the occurrence of any default or event of default, after the expiration of
any applicable periods of notice or cure, under any document or agreement
evidencing or securing any other obligation or indebtedness of the Mortgagor to
the Lender.

If an Event of Default occurs, the Lender may, at its option, declare the whole
of the Indebtedness to be immediately due and payable without further notice to
the Mortgagor, with interest thereon accruing from the date of such Event of
Default until paid at the Default Rate.

17.  Foreclosure; Expense of Litigation.

(a)  When all or any part of the Indebtedness shall become due, whether by
acceleration or otherwise, the Lender shall have the right to foreclose the lien
hereof for such Indebtedness or part thereof and/or exercise any right, power or
remedy provided in this Mortgage, any of the other Loan Documents, or any of the
Additional Loan Documents in accordance with the Illinois Mortgage Foreclosure
Act (Chapter 735, Sections 5/15-1101 et seq., Illinois Compiled Statutes) (as
may be amended from time to time, the “Act”). In the event of a foreclosure
sale, the Lender is hereby authorized, without the consent of the Mortgagor, to
assign any and all insurance policies to the purchaser at such sale or to take
such other steps as the Lender may deem advisable to cause the interest of such
purchaser to be protected by any of such insurance policies.

(b)  In any suit to foreclose the lien hereof, there shall be allowed and
included as additional indebtedness in the decree for sale all expenditures and
expenses which may be paid or incurred by or on behalf of the Lender for
reasonable attorneys’ fees, appraisers’ fees, outlays for documentary and expert
evidence, stenographers’ charges, publication costs, and costs (which may be
estimated as to items to be expended after entry of the decree) of procuring all
such abstracts of title, title searches and examinations, title insurance
policies, and similar data and assurances with respect to the title as the
Lender may deem reasonably necessary either to prosecute such suit or to
evidence to bidders at any sale which may be had pursuant to such decree the
true condition of the title to or the value of the Premises. All expenditures
and expenses of the nature mentioned in this section and such other expenses and
fees as may be incurred in the enforcement of the Mortgagor’s obligations
hereunder, the protection of said Premises and the maintenance of the lien of
this Mortgage, including the reasonable fees of any attorney employed by the
Lender in any litigation or proceeding affecting this Mortgage, the Note, or the
Premises, including probate and bankruptcy proceedings, or in preparations for
the commencement or defense of any proceeding or threatened suit or proceeding
shall be immediately due and payable by the Mortgagor, with interest thereon
until paid at the Default Rate and shall be secured by this Mortgage.
 
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18.  Application of Proceeds of Foreclosure Sale.

The proceeds of any foreclosure sale of the Premises shall be distributed and
applied in accordance with the Act and, unless otherwise specified therein, in
such order as the Lender may determine in its sole and absolute discretion.

19.  Appointment of Receiver.

Upon or at any time after the filing of a complaint to foreclose this Mortgage,
the court in which such complaint is filed shall, upon petition by the Lender,
appoint a receiver for the Premises in accordance with the Act. Such appointment
may be made either before or after sale, without notice, without regard to the
solvency or insolvency of the Mortgagor at the time of application for such
receiver and without regard to the value of the Premises or whether the same
shall be then occupied as a homestead or not and the Lender hereunder or any
other holder of the Note may be appointed as such receiver. Such receiver shall
have power to collect the rents, issues and profits of the Premises (i) during
the pendency of such foreclosure suit, (ii) in case of a sale and a deficiency,
during the full statutory period of redemption, whether there be redemption or
not, and (iii) during any further times when the Mortgagor, but for the
intervention of such receiver, would be entitled to collect such rents, issues
and profits. Such receiver also shall have all other powers and rights that may
be necessary or are usual in such cases for the protection, possession, control,
management and operation of the Premises during said period, including, to the
extent permitted by law, the right to lease all or any portion of the Premises
for a term that extends beyond the time of such receiver’s possession without
obtaining prior court approval of such lease. The court from time to time may
authorize the application of the net income received by the receiver in payment
of (a) the Indebtedness, or by any decree foreclosing this Mortgage, or any tax,
special assessment or other lien which may be or become superior to the lien
hereof or of such decree, provided such application is made prior to foreclosure
sale, and (b) any deficiency upon a sale and deficiency.

20.  Lender’s Right of Possession in Case of Default.

At any time after an Event of Default has occurred, the Mortgagor shall, upon
demand of the Lender, surrender to the Lender possession of the Premises. The
Lender, in its discretion, may, with process of law, enter upon and take and
maintain possession of all or any part of the Premises, together with all
documents, books, records, papers and accounts relating thereto, and may exclude
the Mortgagor and its employees, agents or servants therefrom, and the Lender
may then hold, operate, manage and control the Premises, either personally or by
its agents. The Lender shall have full power to use such measures, legal or
equitable, as in its discretion may be deemed proper or necessary to enforce the
payment or security of the avails, rents, issues, and profits of the Premises,
including actions for the recovery of rent, actions in forcible detainer and
actions in distress for rent. Without limiting the generality of the foregoing,
the Lender shall have full power to:
 
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(a)  cancel or terminate any lease or sublease for any cause or on any ground
which would entitle the Mortgagor to cancel the same;

(b)  elect to disaffirm any lease or sublease which is then subordinate to the
lien hereof;

(c)  extend or modify any then existing leases and to enter into new leases,
which extensions, modifications and leases may provide for terms to expire, or
for options to lessees to extend or renew terms to expire, beyond the Maturity
Date and beyond the date of the issuance of a deed or deeds to a purchaser or
purchasers at a foreclosure sale, it being understood and agreed that any such
leases, and the options or other such provisions to be contained therein, shall
be binding upon the Mortgagor and all persons whose interests in the Premises
are subject to the lien hereof and upon the purchaser or purchasers at any
foreclosure sale, notwithstanding any redemption from sale, discharge of the
Indebtedness, satisfaction of any foreclosure judgment, or issuance of any
certificate of sale or deed to any purchaser;

(d)  make any repairs, renewals, replacements, alterations, additions,
betterments and improvements to the Premises as the Lender deems are necessary;

(e)  insure and reinsure the Premises and all risks incidental to the Lender’s
possession, operation and management thereof; and

(f)  receive all of such avails, rents, issues and profits.

21.  Application of Income Received by Lender.

The Lender, in the exercise of the rights and powers hereinabove conferred upon
it, shall have full power to use and apply the avails, rents, issues and profits
of the Premises to the payment of or on account of the following, in such order
as the Lender may determine:

(a)  to the payment of the operating expenses of the Premises, including cost of
management and leasing thereof (which shall include compensation to the Lender
and its agent or agents, if management be delegated to an agent or agents, and
shall also include lease commissions and other compensation and expenses of
seeking and procuring tenants and entering into leases), established claims for
damages, if any, and premiums on insurance hereinabove authorized;

(b)  to the payment of taxes and special assessments now due or which may
hereafter become due on the Premises; and
 
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(c)  to the payment of any Indebtedness, including any deficiency which may
result from any foreclosure sale.

22.  Compliance with Illinois Mortgage Foreclosure Law.

(a)  If any provision in this Mortgage shall be inconsistent with any provision
of the Act, provisions of the Act shall take precedence over the provisions of
this Mortgage, but shall not invalidate or render unenforceable any other
provision of this Mortgage that can be construed in a manner consistent with the
Act.

(b)  If any provision of this Mortgage shall grant to the Lender (including the
Lender acting as a mortgagee-in-possession) or a receiver appointed pursuant to
the provisions of Section 19 of this Mortgage any powers, rights or remedies
prior to, upon or following the occurrence of an Event of Default which are more
limited than the powers, rights or remedies that would otherwise be vested in
the Lender or in such receiver under the Act in the absence of said provision,
the Lender and such receiver shall be vested with the powers, rights and
remedies granted in the Act to the full extent permitted by law.

(c)  Without limiting the generality of the foregoing, all expenses incurred by
the Lender which are of the type referred to in Section 5/15-1510 or 5/15-1512
of the Act, whether incurred before or after any decree or judgment of
foreclosure, and whether or not enumerated in Sections 12, 17 or 29 of this
Mortgage, shall be added to the Indebtedness and/or by the judgment of
foreclosure.

23.  Rights Cumulative.

Each right, power and remedy herein conferred upon the Lender is cumulative and
in addition to every other right, power or remedy, express or implied, given now
or hereafter existing under any of the Loan Documents or any of the Additional
Loan Documents or at law or in equity, and each and every right, power and
remedy herein set forth or otherwise so existing may be exercised from time to
time as often and in such order as may be deemed expedient by the Lender, and
the exercise or the beginning of the exercise of one right, power or remedy
shall not be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy, and no delay or omission of the Lender in the
exercise of any right, power or remedy accruing hereunder or arising otherwise
shall impair any such right, power or remedy, or be construed to be a waiver of
any Event of Default or acquiescence therein.

24.  Lender’s Right of Inspection.

The Lender and its representatives shall have the right to inspect the Premises
and the books and records with respect thereto at all reasonable times upon not
less than twenty four (24) hours prior notice to the Mortgagor, and access
thereto, subject to the rights of tenants in possession, shall be permitted for
that purpose.
 
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25.  Release Upon Payment and Discharge of Mortgagor’s Obligations.

The Lender shall release this Mortgage and the lien hereof by proper instrument
upon payment and discharge of all Indebtedness, including payment of all
reasonable expenses incurred by the Lender in connection with the execution of
such release.

26.  Notices.

Any notices, communications and waivers under this Mortgage shall be in writing
and shall be (a) delivered in person, (b) mailed, postage prepaid, either by
registered or certified mail, return receipt requested, or (c) sent by overnight
express carrier, addressed in each case as follows:

 
To the Lender
Charter One Bank, N.A.
71 South Wacker Drive, Suite 2900
Chicago, Illinois 60606
Attention:___________________________
       
With a copy to:
Nisen & Elliott, LLC
200 West Adams Street, Suite 2500
Chicago, Illinois 60606
Attention: Thomas V. McCauley, Esq.
       
To the Mortgagor:
CTI Industries Corporation
22160 North Pepper Road
Barrington, Illinois 60010
Attention:____________________________
       
With copy to:
_____________________________________
_____________________________________
_____________________________________
Attention:_____________________________

or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this section shall be deemed received (i) if personally
delivered, then on the date of delivery, (ii) if sent by overnight, express
carrier, then on the next federal banking day immediately following the day
sent, or (iii) if sent by registered or certified mail, then on the earlier of
the third federal banking day following the day sent or when actually received.
 
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27.  Waiver of Rights.

The Mortgagor hereby covenants and agrees that it will not at any time insist
upon or plead, or in any manner claim or take any advantage of, any stay,
exemption or extension law or any so-called “Moratorium Law” now or at any time
hereafter in force providing for the valuation or appraisement of the Premises,
or any part thereof, prior to any sale or sales thereof to be made pursuant to
any provisions herein contained, or to decree, judgment or order of any court of
competent jurisdiction; or, after such sale or sales, claim or exercise any
rights under any statute now or hereafter in force to redeem the property so
sold, or any part thereof, or relating to the marshalling thereof, upon
foreclosure sale or other enforcement hereof; and without limiting the
foregoing:

(a)  The Mortgagor hereby expressly waives any and all rights of reinstatement
and redemption, if any, under any order or decree of foreclosure of this
Mortgage, on its own behalf and on behalf of each and every person, it being the
intent hereof that any and all such rights of reinstatement and redemption of
the Mortgagor and of all other persons are and shall be deemed to be hereby
waived to the full extent permitted by the provisions of Illinois Compiled
Statutes 735 ILCS 5/15-1601 or other applicable law or replacement statutes;

(b)  The Mortgagor will not invoke or utilize any such law or laws or otherwise
hinder, delay or impede the execution of any right, power remedy herein or
otherwise granted or delegated to the Lender but will suffer and permit the
execution of every such right, power and remedy as though no such law or laws
had been made or enacted; and

(c)  If the Mortgagor is a trustee, the Mortgagor represents that the provisions
of this section (including the waiver of reinstatement and redemption rights)
were made at the express direction of the Mortgagor’s beneficiaries and the
persons having the power of direction over the Mortgagor, and are made on behalf
of the trust estate of the Mortgagor and all beneficiaries of the Mortgagor, as
well as all other persons mentioned above.

28.  Contests.

Notwithstanding anything to the contrary herein contained, the Mortgagor shall
have the right to contest by appropriate legal proceedings diligently prosecuted
any Taxes imposed or assessed upon the Premises or which may be or become a lien
thereon and any mechanics’, materialmen’s or other liens or claims for lien upon
the Premises (each, a “Contested Liens”), and no Contested Lien shall constitute
an Event of Default hereunder, if, but only if:

(a)  The Mortgagor shall forthwith give notice of any Contested Lien to the
Lender at the time the same shall be asserted;

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(b)  The Mortgagor shall either pay under protest or deposit with the Lender the
full amount (the “Lien Amount”) of such Contested Lien, together with such
amount as the Lender may reasonably estimate as interest or penalties which
might arise during the period of contest; provided that in lieu of such payment
the Mortgagor may furnish to the Lender a bond or title indemnity in such amount
and form, and issued by a bond or title insuring company, as may be satisfactory
to the Lender;

(c)  The Mortgagor shall diligently prosecute the contest of any Contested Lien
by appropriate legal proceedings having the effect of staying the foreclosure or
forfeiture of the Premises, and shall permit the Lender to be represented in any
such contest and shall pay all expenses incurred, in so doing, including fees
and expenses of the Lender’s counsel (all of which shall constitute so much
additional Indebtedness bearing interest at the Default Rate until paid, and
payable upon demand);

(d)  The Mortgagor shall pay each such Contested Lien and all Lien Amounts
together with interest and penalties thereon (i) if and to the extent that any
such Contested Lien shall be determined adverse to the Mortgagor, or
(ii) forthwith upon demand by the Lender if, in the opinion of the Lender, and
notwithstanding any such contest, the Premises shall be in jeopardy or in danger
of being forfeited or foreclosed; provided that if the Mortgagor shall fail so
to do, the Lender may, but shall not be required to, pay all such Contested
Liens and Lien Amounts and interest and penalties thereon and such other sums as
may be necessary in the judgment of the Lender to obtain the release and
discharge of such liens; and any amount expended by the Lender in so doing shall
be so much additional Indebtedness bearing interest at the Default Rate until
paid, and payable upon demand; and provided further that the Lender may in such
case use and apply monies deposited as provided in subsection (b) above and may
demand payment upon any bond or title indemnity furnished as aforesaid.

29.  Expenses Relating to Note and Mortgage.

(a)  The Mortgagor will pay all expenses, charges, costs and fees relating to
the Loan or necessitated by the terms of the Note, this Mortgage, any of the
other Loan Documents, or any of the Additional Loan Documents, including without
limitation, the Lender’s reasonable attorneys’ fees in connection with the
negotiation, documentation, administration, servicing and enforcement of the
Note, this Mortgage, the other Loan Documents, and the Additional Loan
Documents, all filing, registration and recording fees, all other expenses
incident to the execution and acknowledgment of this Mortgage and all federal,
state, county and municipal taxes, and other taxes (provided the Mortgagor shall
not be required to pay any income or franchise taxes of the Lender), duties,
imposts, assessments and charges arising out of or in connection with the
execution and delivery of the Note and this Mortgage. The Mortgagor recognizes
that, during the term of this Mortgage, the Lender:

(i)  May be involved in court or administrative proceedings, including, without
restricting the foregoing, foreclosure, probate, bankruptcy, creditors’
arrangements, insolvency, housing authority and pollution control proceedings of
any kind, to which the Lender shall be a party by reason of the Loan Documents
or Additional Loan Documents or in which the Loan Documents, Additional Loan
Documents or the Premises are involved directly or indirectly;
 
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(ii)  May make preparations following the occurrence of an Event of Default
hereunder for the commencement of any suit for the foreclosure hereof, which may
or may not be actually commenced;

(iii)  May make preparations following the occurrence of an Event of Default
hereunder for, and do work in connection with, the Lender’s taking possession of
and managing the Premises, which event may or may not actually occur;

(iv)  May make preparations for and commence other private or public actions to
remedy an Event of Default hereunder, which other actions may or may not be
actually commenced;

(v)  May enter into negotiations with the Mortgagor or any of its agents,
employees or attorneys in connection with the existence or curing of any Event
of Default hereunder, the sale of the Premises, the assumption of liability for
any of the Indebtedness or the transfer of the Premises in lieu of foreclosure;
or

(vi)  May enter into negotiations with the Mortgagor or any of its agents,
employees or attorneys pertaining to the Lender’s approval of actions taken or
proposed to be taken by the Mortgagor which approval is required by the terms of
this Mortgage.

(b)  All expenses, charges, costs and fees described in this section shall be so
much additional Indebtedness, shall bear interest from the date so incurred
until paid at the Default Rate and shall be paid, together with said interest,
by the Mortgagor forthwith upon demand.

30.  Intentionally Omitted.

31.  Statement of Indebtedness.

The Mortgagor, within seven days after being so requested by the Lender, shall
furnish a duly acknowledged written statement setting forth the amount of the
debt secured by this Mortgage, the date to which interest has been paid and
stating either that no offsets or defenses exist against such debt or, if such
offsets or defenses are alleged to exist, the nature thereof.

32.  Further Instruments.

Upon request of the Lender, the Mortgagor shall execute, acknowledge and deliver
all such additional instruments and further assurances of title and shall do or
cause to be done all such further acts and things as may reasonably be necessary
fully to effectuate the intent of this Mortgage, of the other Loan Documents and
of the Additional Loan Documents.

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33.  Additional Indebtedness Secured.

All persons and entities with any interest in the Premises or about to acquire
any such interest should be aware that this Mortgage secures more than the
stated principal amount of the Note and interest thereon; this Mortgage secures
any and all other amounts which may become due under the Note, any of the other
Loan Documents, any of the Additional Loan Documents, or any other document or
instrument evidencing, securing or otherwise affecting the Indebtedness,
including, without limitation, any and all amounts expended by the Lender to
operate, manage or maintain the Premises or to otherwise protect the Premises or
the lien of this Mortgage.

34.  Indemnity.

The Mortgagor hereby covenants and agrees that no liability shall be asserted or
enforced against the Lender in the exercise of the rights and powers granted to
the Lender in this Mortgage, and the Mortgagor hereby expressly waives and
releases any such liability, except to the extent resulting from the gross
negligence or willful misconduct of the Lender. The Mortgagor shall indemnify
and save the Lender harmless from and against any and all liabilities,
obligations, losses, damages, claims, costs and expenses, including reasonable
attorneys’ fees and court costs (collectively, “Claims”), of whatever kind or
nature which may be imposed on, incurred by or asserted against the Lender at
any time by any third party which relate to or arise from: (a) any suit or
proceeding (including probate and bankruptcy proceedings), or the threat
thereof, in or to which the Lender may or does become a party, either as
plaintiff or as a defendant, by reason of this Mortgage or for the purpose of
protecting the lien of this Mortgage; (b) the offer for sale or sale of all or
any portion of the Premises; and (c) the ownership, leasing, use, operation or
maintenance of the Premises, if such Claims relate to or arise from actions
taken prior to the surrender of possession of the Premises to the Lender in
accordance with the terms of this Mortgage; provided, however, that the
Mortgagor shall not be obligated to indemnify or hold the Lender harmless from
and against any Claims directly arising from the gross negligence or willful
misconduct of the Lender. All costs provided for herein and paid for by the
Lender shall be so much additional Indebtedness and shall become immediately due
and payable upon demand by the Lender and with interest thereon from the date
incurred by the Lender until paid at the Default Rate.

35.  Subordination of Property Manager’s Lien.

Any property management agreement for the Premises entered into hereafter with a
property manager shall contain a provision whereby the property manager agrees
that any and all mechanics’ lien rights that the property manager or anyone
claiming by, through or under the property manager may have in the Premises
shall be subject and subordinate to the lien of this Mortgage and shall provide
that the Lender may terminate such agreement, without penalty or cost, at any
time after the occurrence of an Event of Default hereunder. Such property
management agreement or a short form thereof, at the Lender’s request, shall be
recorded with the Recorder of Deeds of the county where the Premises are
located. In addition, if the property management agreement in existence as of
the date hereof does not contain a subordination provision, the Mortgagor shall
cause the property manager under such agreement to enter into a subordination of
the management agreement with the Lender, in recordable form, whereby such
property manager subordinates present and future lien rights and those of any
party claiming by, through or under such property manager to the lien of this
Mortgage.
 
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36.  Compliance with Environmental Laws.

Concurrently herewith the Mortgagor has executed and delivered to the Lender
that certain Environmental Indemnity Agreement dated as of the date hereof (the
“Indemnity”) pursuant to which the Mortgagor has indemnified the Lender for
environmental matters concerning the Premises, as more particularly described
therein. The provisions of the Indemnity are hereby incorporated herein and this
Mortgage shall secure the obligations of the Mortgagor thereunder.

37.  Intentionally Omitted.

38.  Revolving Loan.

This Mortgage is given in part to secure a revolving credit loan under the
Additional Loan Documents and shall secure not only presently existing
indebtedness thereunder, but also future advances, whether such advances are
obligatory or to be made at the option of the Lender, or otherwise, as are made
within twenty (20) years from the date hereof to the same extent as if such
future advances were made on the date of the execution of this Mortgage,
although there may be no advance made at the time of execution of this Mortgage
and although there may be no Indebtedness outstanding at the time any advance is
made. The lien of this Mortgage shall be valid as to all Indebtedness including
future advances, from the time of its filing for record in the recorder’s or
registrar’s office of the county in which the real estate is located. This
Mortgage secures, among other Indebtedness, a “revolving credit” arrangement
within the meaning of 815 ILCS 205/4.1 and 205 ILCS 5/5d. The total amount of
Indebtedness may increase or decrease from time to time, as provided in the
Additional Loan Documents, and any disbursements which the Lender may make under
this Mortgage, the Note or the Additional Loan Documents or any other document
with respect hereto (e.g., for payment of taxes, insurance premiums or other
advances to protect the Lender’s liens and security interests, as permitted
hereby) shall be additional Indebtedness secured hereby. This Mortgage is
intended to and shall be valid and have priority over all subsequent liens and
encumbrances, including statutory liens, excepting solely taxes and assessments
levied on the real estate, to the extent of the maximum amount secured hereby.

39.  Miscellaneous.

(a)  Successors and Assigns. This Mortgage and all provisions hereof shall be
binding upon and enforceable against the Mortgagor and its assigns and other
successors. This Mortgage and all provisions hereof shall inure to the benefit
of the Lender, its successors and assigns and any holder or holders, from time
to time, of the Note, or the notes included in the Additional Loan Documents.
 
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(b)  Invalidity of Provisions; Governing Law. In the event that any provision of
this Mortgage is deemed to be invalid by reason of the operation of law, or by
reason of the interpretation placed thereon by any administrative agency or any
court, the Mortgagor and the Lender shall negotiate an equitable adjustment in
the provisions of the same in order to effect, to the maximum extent permitted
by law, the purpose of this Mortgage and the validity and enforceability of the
remaining provisions, or portions or applications thereof, shall not be affected
thereby and shall remain in full force and effect. This Mortgage is to be
construed in accordance with and governed by the laws of the State of Illinois.

(c)  Municipal Requirements. The Mortgagor shall not by act or omission permit
any building or other improvement on premises not subject to the lien of this
Mortgage to rely on the Premises or any part thereof or any interest therein to
fulfill any municipal or governmental requirement, and the Mortgagor hereby
assigns to the Lender any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Similarly, no building or
other improvement on the Premises shall rely on any premises not subject to the
lien of this Mortgage or any interest therein to fulfill any governmental or
municipal requirement. Any act or omission by the Mortgagor which would result
in a violation of any of the provisions of this subsection shall be void.

(d)  Rights of Tenants. The Lender shall have the right and option to commence a
civil action to foreclose this Mortgage and to obtain a decree of foreclosure
and sale subject to the rights of any tenant or tenants of the Premises having
an interest in the Premises prior to that of the Lender. The failure to join any
such tenant or tenants of the Premises as party defendant or defendants in any
such civil action or the failure of any decree of foreclosure and sale to
foreclose their rights shall not be asserted by the Mortgagor as a defense in
any civil action instituted to collect the Indebtedness, or any part thereof or
any deficiency remaining unpaid after foreclosure and sale of the Premises, any
statute or rule of law at any time existing to the contrary notwithstanding.
 
(e)  Option of Lender to Subordinate. At the option of the Lender, this Mortgage
shall become subject and subordinate, in whole or in part (but not with respect
to priority of entitlement to insurance proceeds or any condemnation or eminent
domain award) to any and all leases of all or any part of the Premises upon the
execution by the Lender of a unilateral declaration to that effect and the
recording thereof in the Office of the Recorder of Deeds in and for the county
wherein the Premises are situated.
 
(f)  Mortgagee-in-Possession. Nothing herein contained shall be construed as
constituting the Lender a mortgagee-in-possession in the absence of the actual
taking of possession of the Premises by the Lender pursuant to this Mortgage.
 
(g)  Relationship of Lender and Mortgagor. The Lender shall in no event be
construed for any purpose to be a partner, joint venturer, agent or associate of
the Mortgagor or of any lessee, operator, concessionaire or licensee of the
Mortgagor in the conduct of their respective businesses, and, without limiting
the foregoing, the Lender shall not be deemed to be such partner, joint
venturer, agent or associate on account of the Lender becoming a
mortgagee-in-possession or exercising any rights pursuant to this Mortgage, any
of the other Loan Documents, any of the Additional Loan Documents, or otherwise.
The relationship of the Mortgagor and the Lender hereunder is solely that of
debtor/creditor.
 
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(h)  Time of the Essence. Time is of the essence of the payment by the Mortgagor
of all amounts due and owing to the Lender under the Note, the other Loan
Documents and the Additional Loan Documents and the performance and observance
by the Mortgagor of all terms, conditions, obligations and agreements contained
in this Mortgage, the other Loan Documents and the Additional Loan Documents.
 
(i)  No Merger. The parties hereto intend that the Mortgage and the lien hereof
shall not merge in fee simple title to the Premises, and if the Lender acquires
any additional or other interest in or to the Premises or the ownership thereof,
then, unless a contrary intent is manifested by the Lender as evidenced by an
express statement to that effect in an appropriate document duly recorded, this
Mortgage and the lien hereof shall not merge in the fee simple title and this
Mortgage may be foreclosed as if owned by a stranger to the fee simple title.
 
(j)  Maximum Indebtedness. Notwithstanding anything contained herein to the
contrary, in no event shall the Indebtedness exceed an amount equal to
$25,000,000; provided, however, in no event shall the Lender be obligated to
advance funds in excess of the face amount of the Note, plus the amount set
forth in the Additional Loan Documents.
 
(k)  CONSENT TO JURISDICTION. TO INDUCE THE LENDER TO ACCEPT THE NOTE, THE
MORTGAGOR IRREVOCABLY AGREES THAT, SUBJECT TO THE LENDER’S SOLE AND ABSOLUTE
ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THE
NOTE AND THIS MORTGAGE WILL BE LITIGATED IN COURTS HAVING SITUS IN CHICAGO,
ILLINOIS. THE MORTGAGOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
COURT LOCATED WITHIN CHICAGO, ILLINOIS, WAIVES PERSONAL SERVICE OF PROCESS UPON
THE MORTGAGOR, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL DIRECTED TO THE MORTGAGOR AT THE ADDRESS STATED HEREIN AND
SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.
 
(l)  WAIVER OF JURY TRIAL. THE MORTGAGOR AND THE LENDER (BY ACCEPTANCE HEREOF),
HAVING BEEN REPRESENTED BY COUNSEL EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS (A) UNDER THIS MORTGAGE OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION WITH THIS MORTGAGE OR (B) ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS MORTGAGE, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE
MORTGAGOR AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST THE LENDER OR ANY
OTHER PERSON INDEMNIFIED UNDER THIS MORTGAGE ON ANY THEORY OF LIABILITY FOR
SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.
 
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(m)  Complete Agreement. This Mortgage, the Note, the other Loan Documents and
the Additional Loan Documents constitute the complete agreement between the
parties with respect to the subject matter hereof and the Loan Documents and
Additional Loan Documents may not be modified, altered or amended except by an
agreement in writing signed by both the Mortgagor and the Lender.

IN WITNESS WHEREOF, the Mortgagor has executed and delivered this Mortgage,
Security Agreement, Assignment of Rents and Leases and Fixture Filing the day
and year first above written.
 

        CTI Industries Corporation, an Illinois corporation  
   
   
    By:   /s/ Howard W. Schwan  

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Name: Howard W. Schwan
Title: President
   

 
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STATE OF ILLINOIS
 
COUNTY OF _________ 
)
)  SS.
)
 

 
The undersigned, a Notary Public in and for the said County, in the State
aforesaid, DO HEREBY CERTIFY that _______________________________, the
_____________________, of CTI Industries Corporation, an Illinois corporation,
who is personally known to me to be the same person whose name is subscribed to
the foregoing instrument as such _________________, appeared before me this day
in person and acknowledged that he/she signed and delivered the said instrument
as his/her own free and voluntary act and as the free and voluntary act of said
corporation, for the uses and purposes therein set forth.

GIVEN under my hand and notarial seal this _____ day of ________________, 20__.

______________________________________
Notary Public

My Commission Expires:

______________________________________

 
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EXHIBIT “A”

LEGAL DESCRIPTION OF REAL ESTATE

[To Be Inserted]

PROPERTY ADDRESS OF REAL ESTATE:

22160 North Pepper Road
Barrington, Illinois 60010

PERMANENT TAX IDENTIFICATION NUMBER:

13-21-400-014

 
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EXHIBIT “B”

PERMITTED EXCEPTIONS

1.
General real estate taxes for the year 2005 and each year thereafter not yet due
and payable.

2.
Exception Nos. ___________, inclusive, contained on Schedule B of __________
Title Insurance Company Commitment No. ______________ dated ____________, 200__.

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EXHIBIT “C”

INSURANCE REQUIREMENTS

GENERAL INFORMATION

1.
All insurance policies referred to herein shall be in form and substance
acceptable to Charter One Bank, N.A. (“Charter One”).

2.
Charter One must receive evidence/certificates of insurance at least ten (10)
business days prior to closing. Original policies must be provided to Charter
One as soon as they are available from insurers. Certified copies should be
available within sixty (60) to ninety (90) days.

 
3.
Proof of coverage must be on an ACORD 28 - EVIDENCE OF PROPERTY INSURANCE form.
Liability insurance must be written on ACORD 25 or its equivalent. NOTE: Please
remove any “endeavor to” and “but failure to mail such notice shall impose .…
representatives” language as it relates to notices. Initials by an authorized
representative should appear next to any deletions on the certificates.

4.
All property policies shall contain a standard mortgage clause in favor of
Charter One and shall provide for a thirty (30) day written notice to Charter
One of any material change or cancellation. Certificates with disclaimers will
NOT be accepted.

 
5.
The Mortgagor must be the named insured.

6.
Property & Builders Risk certificates must show Charter One as First Mortgagee
and Lender’s Loss Payee as follows:

Charter One Bank, N.A.
71 South Wacker Drive, Suite 2900
Chicago, Illinois 60606
Attention:_______________________

(Charter One may be shown as “Mortgagee and Lender’s Loss Payee As Their
Interests May Appear” until the insurance agent receives release of interest
from the prior lender. At that time, the insurance policies will need to be
endorsed to show Charter One as First Mortgagee and Lender’s Loss Payee).

7.
The insured property must be identified as 22160 North Pepper Road, Barrington,
Illinois 60010.

8.
All insurance companies must have a Policy Rating of “A” and a Financial Rating
of “VIII” from AM Best’s Rating Guide.

9.
The insurance documentation must be signed by an authorized representative of
the Insurer.

 
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SPECIFIC REQUIREMENTS

1.
If the property policy is a blanket policy or limit, Charter One must receive a
schedule of the amount allocated to the property/rents or the amounts allocated
to the property must be indicated on the certificate.

2.
Coverage must be on an “all risk” (Special Perils), 100% replacement cost basis
without deduction for foundations and footings, and WITHOUT co-insurance. The
co-insurance must be waived or an Agreed Amount endorsement must be included and
either “No Co-insurance” or “Agreed Amount” must be provided and indicated on
the certificate.

3.
Ordinance or Law coverage providing for demolition and increased cost of
construction, must be provided and indicated on the certificate.

4.
Other coverages such as earthquake, boiler and machinery (which includes the
mechanics of the building, such as elevators), and flood will be required when
these risks are present.

5.
Rent Loss or Business Income coverage shall be in an amount equal to 100% of the
projected annual rents or revenue with a minimum period of indemnity of 12
months, or such greater period as Charter One may require. This coverage needs
to be written on a Gross Rental Income, Gross Profits or Extended Period of
Indemnity form, not on an actual loss sustained basis which may terminate as
soon as the premises are tenantable or operational.

6.
Charter One must be named as an Additional Insured for all general liability
coverage, with a minimum limit of $2,000,000 for any one occurrence.

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