Document:

The
                    securities represented by this Warrant have not been registered
                    under the
                    Securities Act of 1933, and thus may not be transferred unless
                    registered
                    under that Act or unless an exemption from registration is
                    available.

                

              	 	 
	 	 	Warrant
                dated February 1, 2006, to purchase 151,515 Shares of Common Stock
                on or
                before February 1, 2011.	 
	 	 	 	 

      

       

    

    

    STOCK
      PURCHASE WARRANT

    TO
      PURCHASE COMMON STOCK OF

    CTI
      INDUSTRIES CORPORATION

    

    This
      certifies that, for value received, Stephen
      M. Merrick,
      or his
      assigns, is entitled to subscribe for and purchase from CTI INDUSTRIES
      CORPORATION, an Illinois corporation (hereinafter called the “Company”), at a
      price of $3.30 per share (subject to adjustment as set forth in paragraph 3
      below) and at any time after the date hereof to and including February 1, 2011,
      151,515 (subject to adjustment as set forth in paragraph 3 below) fully paid
      and
      non-assessable shares of the Company’s no par value common stock (hereinafter
      referred to as the “Common Stock”).

    

    This
      Warrant is subject to the following provisions, terms and
      conditions:

    

    1. Exercise;
      Issuance of Certificates; Payment for Shares.
      The
      rights represented by this Warrant may be exercised by the holder hereof at
      any
      time within the period specified above, in whole or in part (but not as to
      a
      fractional share of Common Stock), by the surrender of this Warrant (properly
      endorsed if required) at the principal office of the Company (or such other
      office of the Company as it may designate by notice in writing to the holder
      hereof at the address of such holder appearing on the books of the Company)
      (a)
      specifying the number of shares of Common Stock being purchased and (b)
      accompanied by a check payable to the Company for the purchase price for such
      shares. The Company agrees that the shares so purchased shall be deemed to
      be
      issued to the holder hereof as the record owner of such shares as of the close
      of business on the date on which this Warrant shall have been surrendered and
      payment made for such shares as aforesaid. Certificates for the shares so
      purchased shall be delivered to the holder hereof within a reasonable time,
      not
      exceeding ten days, after the rights represented by this Warrant shall have
      been
      so exercised, and, unless this Warrant has expired, a new Warrant of like tenor,
      representing the right to purchase the number of shares, if any, with respect
      to
      which this Warrant shall not then have been exercised, shall also be delivered
      to the holder hereof within such time.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2. Shares
      to be Fully Paid; Reservation of Shares.
      The
      Company covenants and agrees:

    

    (a) that
      all
      shares of Common Stock which may be issued upon exercise of the rights
      represented by this Warrant will, upon issuance, be fully paid and nonassessable
      and free from all taxes, liens and charges with respect to the issue
      thereof;

    

    (b) without
      limiting the generality of the foregoing, that the Company will from time to
      time take all such action as may be required to assure that the par or stated
      value, if any, per share of Common Stock is at all times equal to or less than
      the then effective Warrant Purchase Price (as hereinafter defined) per share
      of
      Common Stock issuable pursuant to this Warrant;

    

    (c) that,
      during the period within which the rights represented by this Warrant may be
      exercised, the Company will at all times have authorized, and reserved for
      the
      purpose of issue or transfer upon exercise of the rights evidenced by this
      Warrant, a sufficient number of shares of Common Stock to provide for the full
      exercise of the rights represented by this Warrant;

    

    (d) that
      the
      Company will take all such action as may be necessary to assure that the Common
      Stock issuable upon the exercise hereof may be so issued without violation
      of
      any applicable law or regulation; and

    

    (e) that
      the
      Company will not take any action which would result in any adjustment of the
      Warrant Purchase Price if (i) the total number of shares of Common Stock
      issuable after such action upon exercise of this Warrant, together with all
      shares of Common Stock then outstanding and all shares of Common Stock then
      issuable upon exercise of all Options (as hereinafter defined) and upon
      conversion of all Convertible Securities (as hereinafter defined) then
      outstanding, would exceed (ii) the total number of shares of Common Stock then
      authorized by the Company's Articles of Incorporation (all such issued and
      issuable Common Stock being called the "Potentially Outstanding Common
      Stock").

    

    In
      the
      event any stock or securities of the Company other than Common Stock are
      issuable upon the exercise hereof, the Company will take or refrain from taking
      any action referred to in clauses (a) through (e) of this paragraph 2 as though
      such clauses apply, equally, to such other stock or securities then issuable
      upon the exercise hereof.

    

    3. Adjustments:
      Stock Dividends, Reclassification, Reorganization and Merger
      Provisions.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a) If
      the
      Company increases or decreases the number of its issued and outstanding shares
      of Common Stock, or changes in any way the rights and privileges of such shares,
      by means of (i) the payment of a stock dividend or the making of any other
      distribution on such shares payable in its Common Stock, (ii) a forward or
      reverse stock split or other subdivision of shares, (iii) a consolidation
      or combination involving its Common Stock, or (iv) a reclassification or
      recapitalization involving its Common Stock, then the Exercise Price in effect
      at the time of such action and the number of Warrant Securities purchasable
      pursuant to this Warrant at that time shall be proportionately adjusted so
      that
      the numbers, rights, and privileges relating to the Warrant Securities then
      purchasable pursuant to this Warrant shall be increased, decreased or changed
      in
      like manner, for the same aggregate purchase price as set forth in this Warrant,
      as if the Warrant Securities purchasable pursuant to this Warrant immediately
      prior to the event at issue had been issued, outstanding, fully paid and
      nonassessable at the time of that event. As an example, if the Company were
      to
      declare a two-for-one forward stock split or a 100 percent stock dividend,
      then
      the unpurchased number of Warrant Securities subject to this Warrant would
      be
      doubled and the Exercise Price for all unpurchased Warrant Securities would
      be
      reduced by 50 percent. These adjustments would result in the Holder's rights
      under this Warrant not being diluted by the stock split or stock dividend and
      the Holder paying the same aggregate exercise price.

    

    If
      the
      Company shall declare a dividend payable in money on its Common Stock and at
      substantially the same time shall offer to its shareholders a right to purchase
      new shares of Common Stock from the proceeds of such dividend or for an amount
      substantially equal to the dividend, all shares of Common Stock so issued shall,
      for purposes of this Warrant, be deemed to have been issued as a stock
      dividend.

    

    (b) If
      the
      Company pays or makes any dividend or other distribution upon its Common Stock
      payable in securities or other property, excluding money or shares of the
      Company’s Common Stock but including (without limitation) shares of any other
      class of the Company’s stock or stock or other securities convertible into or
      exchangeable for shares of Common Stock or any other class of the Company’s
      stock or other interests in the Company or its assets (“Convertible
      Securities”), a proportionate part of those securities or that other property
      shall be set aside by the Company and delivered to the Holder in the event
      that
      the Holder exercises this Warrant. The securities and other property then
      deliverable to the Holder upon the exercise of this Warrant shall be in the
      same
      ratio to the total securities and property set aside for the Holder as the
      number of Warrant Securities with respect to which the Warrant is then exercised
      is to the total Warrant Securities purchasable pursuant to this Warrant at
      the
      time the securities or property were set aside for the Holder.

    

    If
      the
      Company shall declare a dividend payable in money on its Common Stock and at
      substantially the same time shall offer to its shareholders a right to purchase
      new shares of a class of stock (other than Common Stock), Convertible
      Securities, property or other interests from the proceeds of such dividend
      or
      for an amount substantially equal to the dividend, all shares of stock,
      Convertible Securities, property or other interests so issued or transferred
      shall, for purposes of this Warrant, be deemed to have been issued as a dividend
      or other distribution subject to this subsection (b).

    

    If
      the
      Company shall declare a dividend payable in money or shares of the Company’s
      Common Stock, and Holder has not fully exercised this Warrant, then, subject
      to
      the provisions of Section 4 hereof, Holder shall only be permitted to receive
      or
      participate in said dividends to the extent of his ownership of Warrant
      Securities actually purchased hereunder.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    (c) If
      at any
      time the Company grants to its shareholders rights to subscribe pro rata for
      additional securities of the Company, whether Common Stock, Convertible
      Securities, or other classifications, or for any other securities, property
      or
      interests that the Holder would have been entitled to subscribe for if,
      immediately prior to such grant, the Holder had exercised this Warrant, then
      the
      Company shall cause the Company also to grant to the Holder the same
      subscription rights that the Holder would be entitled to if the Holder had
      exercised this Warrant in full immediately prior to such grant.

    

    (d) The
      Company shall cause the Company to make effective provision so that the Holder
      shall have the right thereafter, by the exercise of this Warrant, to purchase
      for the aggregate Exercise Price described in this Warrant the kind and amount
      of shares of stock and other securities, and property and interests, as would
      be
      issued or payable with respect to or in exchange for the number of Warrant
      Securities of the Company that are then purchasable pursuant to this Warrant
      as
      if such Warrant Securities had been issued to the Holder immediately before
      the
      occurrence of any of the following events: (i) the reclassification,
      capital reorganization, or other similar change of outstanding shares of Common
      Stock of the Company, other than as described and provided for in
      subsection (a) above; (ii) the merger or consolidation of the Company
      with one or more other corporations or other entities, other than a merger
      with
      a subsidiary or affiliate pursuant to which the Company is the continuing entity
      and the outstanding shares of Common Stock, including the Warrant Securities
      purchasable pursuant to this Warrant, are not affected; or (iii) the
      spin-off of assets to a subsidiary or an affiliated entity, or the sale, lease,
      or exchange of a significant portion of the Company’s assets, in a transaction
      pursuant to which the Company’s shareholders of record are to receive securities
      or other interests in another entity. Any such provision made by the Company
      for
      adjustments with respect to this Warrant shall be as nearly equivalent to the
      adjustments otherwise provided for in this Warrant as is reasonably practicable.
      The foregoing provisions of this subsection (d) shall similarly apply to
      successive reclassifications, capital reorganizations and similar changes of
      shares of Common Stock and to successive consolidations, mergers, spin-offs,
      sales, leases or exchanges. 

    

    (e) If
      any
      sale, lease or exchange of all, or substantially all, of the Company’s assets or
      business or any dissolution, liquidation or winding up of the Company (a
“Termination of Business”) shall be proposed, the Company shall cause effective
      provision to be made that the Company shall deliver written notice to the Holder
      or Holders of this Warrant in accordance with Section 4 below as a
      condition precedent to the consummation of that Termination of Business. If
      the
      result of the Termination of Business is that shareholders of the Company are
      to
      receive securities or other interests of another entity, the provisions of
      subsection (d) above shall apply. However, if the result of the Termination
      of Business is that shareholders of the Company are to receive money or property
      other than securities or other interests in another entity, the Holder or
      Holders of this Warrant shall be entitled to exercise this Warrant prior to
      the
      consummation of the event at issue and, with respect to any Warrant Securities
      so purchased, shall be entitled to all of the rights of the other shareholders
      of Common Stock with respect to any distribution by the Company in connection
      with the Termination of Business. In the event no other entity is involved
      and
      subsection (d) does not apply, all purchase rights under this Warrant shall
      terminate at the close of business on the date as of which shareholders of
      record of the Common Stock shall be entitled to participate in a distribution
      of
      the assets of the Company in connection with the Termination of Business;
      provided, that in no event shall that date be less than 30 days after
      delivery to the Holder or Holders of this Warrant of the written notice
      described above and in Section 4. If the termination of purchase rights
      under this Warrant is to occur as a result of the event at issue, a statement
      to
      that effect shall be included in that written notice.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    (f) Except
      as
      otherwise provided in this Section 3, upon any adjustment of the Exercise
      Price, the Holder shall be entitled to purchase, at the new Exercise Price,
      the
      number of shares of Common Stock, calculated to the nearest full share, obtained
      by multiplying the number of Warrant Securities purchasable pursuant to this
      Warrant immediately prior to the adjustment of the Exercise Price by the
      Exercise Price in effect immediately prior to its adjustment and dividing the
      product so obtained by the new Exercise Price.

    

    (g) If
      consideration other than money is received by the Company upon the issuance
      or
      sale of Common Stock, Convertible Securities, or other securities or interests,
      the fair market value of such consideration, as reasonably determined by the
      Board of Directors of the Company, shall be used for purposes of any adjustment
      required by this Section 3. The fair market value of such consideration
      shall be determined as of the date of the adoption of the resolution of the
      Board of Directors of the Company that authorizes the transaction giving rise
      to
      the adjustment. In case of the issuance or sale of Common Stock, Convertible
      Securities, or other securities or interests in conjunction with the issuance
      or
      sale of other securities or property without a separate allocation of the
      purchase price, the Board of Directors of the Company shall reasonably determine
      an allocation of the consideration among the items being issued or sold. The
      reclassification of securities other than Common Stock into securities including
      Common Stock shall be deemed to involve the issuance of that Common Stock for
      a
      consideration other than money immediately prior to the close of business on
      the
      date fixed for the determination of shareholders entitled to receive that Common
      Stock.

    

    The
      Company shall promptly deliver written notice of all such determinations by
      its
      Board of Directors to the Holder or Holders of this Warrant, and those
      determinations shall be final and binding on the Holder or Holders.

    

    (h) The
      provisions of this Section 3 shall apply to successive events that may
      occur from time to time but shall only apply to a particular event if it occurs
      prior to the expiration of this Warrant either by its terms or by its exercise
      in full.

    

    (i) For
      purposes of subsections (a) and (b) above, Shares of the Company’s Common
      Stock owned or held at any relevant time by, or for the account of, the Company,
      in its treasury or otherwise, shall not be deemed to be outstanding for purposes
      of the calculations and adjustments described.

    

    4. Issue
      Tax.
      The
      issuance of certificates for shares of Common Stock upon the exercise of this
      Warrant shall be made without charge to the holder of this Warrant for any
      issuance tax in respect thereof.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    5. Closing
      of Books.
      The
      Company will at no time close its transfer books against the transfer of this
      Warrant or of any shares of Common Stock issued or issuable upon the exercise
      of
      this Warrant in any manner which interferes with the timely exercise of this
      Warrant.

    

    6. No
      Voting Rights.
      This
      Warrant shall not entitle the holder hereof to any voting rights or other rights
      as a stockholder of the Company.

    

    7. Warrants
      Transferable.
      Subject
      to the restrictions referred to in the legend set forth on the face of this
      Warrant, this Warrant and all rights hereunder are transferable to any person,
      in whole or in part, without charge to the holder hereof, at the office of
      the
      Company referred to in paragraph 1 above, by the holder hereof in person or
      by
      duly authorized attorney, upon surrender of this Warrant properly endorsed.
      Each
      taker and holder of this Warrant, by taking or holding the same, consents and
      agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
      and that the holder hereof, when this Warrant shall have been so endorsed,
      may
      be treated by the Company and all other persons dealing with this Warrant as
      the
      absolute owner hereof for any purpose and as the person entitled to exercise
      the
      rights represented by this Warrant, or to the transfer hereof on the books
      of
      the Company, any notice to the contrary notwithstanding. Until such transfer
      on
      such books, however, the Company may treat the registered holder hereof as
      the
      owner for all purposes.

    

    8. Transfer
      to Comply With the Securities Act of 1933.

    

    (a) All
      securities issued or issuable upon exercise of this Warrant, may not be offered,
      sold or transferred, in whole or in part, except in compliance with the
      Securities Act of 1933, as amended (the "Act"), and except in compliance with
      all applicable state securities statutes.

    

    (b) The
      Company may cause the following legend, or its equivalent, to be set forth
      on
      each certificate representing any security issued or issuable upon exercise
      of
      this Warrant to the extent such Common Stock has not been registered for sale
      by
      the Company.

    

    “The
      shares represented by this Certificate have not been registered under the
      Securities Act of 1933 (“the Act”) and are 'restricted securities' as that term
      is defined in Rule 144 under the Act. The shares may not be offered for
      sale, sold or otherwise transferred except pursuant to an effective registration
      statement under the Act or pursuant to an exemption from registration under
      the
      Act, the availability of which is to be established to the satisfaction of
      the
      Company.”

    

    9. Warrant
      Exchangeable for Different Denominations.
      This
      Warrant is exchangeable, upon its surrender by the holder hereof at the office
      of the Company referred to in paragraph 1 above, for new Warrants of like tenor
      representing in the aggregate the right to subscribe for and purchase the number
      of Shares which may be subscribed for and purchased hereunder, each of such
      new
      Warrants to represent the right to subscribe for and purchase such number of
      shares as shall be designated by said holder hereof at the time of such
      surrender.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    10. Descriptive
      Headings and Governing Law.
      The
      descriptive headings of the several paragraphs of this Warrant are inserted
      for
      convenience of reference only and do not constitute a part of this Warrant.
      This
      Warrant is being delivered and is intended to be performed in the State of
      Illinois and shall be construed and enforced in accordance with, and the rights
      of the parties shall be governed by, the laws of such State.

    

    11. Certain
      Covenants of the Company.
      So long
      as this Warrant remains outstanding, in whole or in part, the Company will,
      unless the holder of this Warrant otherwise consents in writing:

    

    (a) within
      60
      days after the end of each of the first three quarterly fiscal periods in each
      fiscal year of the Company, deliver to the holder of this Warrant (i) a
      consolidated balance sheet of the Company and its subsidiaries, if any, as
      at
      the end of such period, and (ii) consolidated statements of income and of
      surplus of the Company and its subsidiaries, if any, for such period and (in
      the
      case of the second and third such quarterly periods) for the period from the
      beginning of the current fiscal year to the end of such quarterly period,
      setting forth in each case in comparative form the consolidated figures for
      the
      corresponding periods of the previous fiscal year, all in reasonable detail
      and
      certified as prepared in accordance with generally accepted accounting
      principles consistently applied, subject to exchanges resulting from year-end
      audit adjustments, by the principal financial officer of the Company;
      and

    

    (b) within
      90
      days after the end of each fiscal year of the Company, deliver to the holder
      of
      this Warrant (i) a consolidated balance sheet of the Company and its
      subsidiaries, if any, as at the end of such year, and (ii) consolidated
      statements of income and of surplus of the Company and its subsidiaries, if
      any,
      for such year, setting forth in each case in comparative form the consolidated
      figures for the previous fiscal year, all in reasonable detail and accompanied
      by an opinion thereon of independent public accountants, which opinion shall
      state that such financial statements have been prepared in accordance with
      generally accepted accounting principles consistently applied and that the
      audit
      by such accountants in connection with such financial statements has been made
      in accordance with generally accepted auditing standards; and

    

    (c) as
      soon
      as practicable, notify the holder of this Warrant in writing of any potentially
      material adverse development concerning the Company; and permit such holder
      of
      his representative to examine the books and records of the company at any time
      during regular business hours and make copies of any portions thereof desired
      to
      be copied by such holder or his representative.

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
      authorized officers under its corporate seal and this Warrant to be dated this
      1st day of February, 2006.

     

     

    
      	 	 	 
	 	
              CTI
                INDUSTRIES CORPORATION

            
	 
 	 
 	 
 
	 	By:  	/s/ Howard
              W.
              Schwan
	 	
              
President
	 	 

    

     

    (CORPORATE
      SEAL)

    

    Attest:

    

        
      /s/Stephen M.
      Merrick                         

    Secretary

    

     

    
      
         

        

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    SUBSCRIPTION
      AGREEMENT

    

    Dated:
      ______________, 200_

    

    
      	To:          
              	
              CTI
                Industries Corporation 
                22160
                  N. Pepper Road

                Barrington,
                  Illinois

                 

              

            

    

    
    

    The
      undersigned, pursuant to the provisions set forth in the within Warrant, hereby
      agrees to subscribe for and purchase shares of the Common Stock covered by
      such
      Warrant, and makes payment herewith in full therefor at the price per share
      provided by such Warrant.

    

    Signature___________________________

    

    Address_____________________________

    

    ____________________________________

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers all of the rights
      of the undersigned under the within Warrant, with respect to the number of
      shares of Common stock set forth below, unto:

    

    
      

      
        	Name of Assignee	                      
                Address	
                     Number
                  of Shares

              

      

       

    

    

    
 

    

    Dated:
      __________________, 200__

    

    Signature___________________________

    

    Witness_____________________________

    
 

    
      
        
        

      

      
        10Unassociated Document

     

    
      	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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      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;

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      (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.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

      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.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (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:

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      

      (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

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      

      (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;

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      

      (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;

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      

      (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.

      

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      

      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.

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      

      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.

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      

      (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.

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      (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.

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      (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
	 	
                

                Name: Howard
                  W. Schwan

                Title: President

              
	 	 

      

      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      

      
        	
                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:

      

      

      ______________________________________

      

      

      
 

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

         

      

      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

      
 

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      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__.

              

      

      

      

      

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      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.

              

      

      
 

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      

      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.

              

      

      

      
        
          
          

        

        
          35

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