Exhibit 10.22
THIS INSTRUMENT WAS )
PREPARED BY AND AFTER )
RECORDING RETURN TO: )
Xxxxxx X. Xxxxxx )
First American Bank )
0000 Xxxxx Xxxxxx )
Elk Grove Village, )
Illinois 60007 )
)
PERMANENT INDEX #: )
00-00-000-000 )
)
STREET ADDRESS: )
00000 Xxxxx Xxxxxx Xxxx )
Xxxxxxxxxx, XX 00000 )
MORTGAGE
THIS MORTGAGE, made August 24, 1998, by and between First
American Bank, not personally, but solely as Trustee under Trust Agreement,
dated August 14, 1998 and known as Trust No. 1-98-134 (hereinafter referred to
as "Mortgagor"), and First American Bank, an Illinois banking corporation
(hereinafter referred to as "Mortgagee");
WITNESSETH:
WHEREAS, CTI Industries, a Delaware corporation (the
"Borrower") is justly indebted to Mortgagee in the principal sum of One Million
Two Hundred Sixty Eight Thousand and 00/100 Dollars ($1,268,000.00), evidenced
by the certain Fifth Term Note of even date herewith (the "Note"), made by the
Borrower pursuant to the Amended and Restated Loan and Security Agreement, dated
May 1, 1998, between the Borrower and Mortgagee (the "Loan Agreement"), and made
payable to the order of and delivered to Mortgagee, in and by which Note the
Borrower promised to pay the principal sum and interest as set forth in the Note
in installments as provided in the Note, with a final maturity date occurring on
September 1, 2003 (or earlier as so provided in the Note); and
WHEREAS, the Borrower, as beneficiary of Mortgagor, has
directed Mortgagor to execute and deliver this Mortgage;
NOW, THEREFORE, the Mortgagor, to secure the payment of the
principal sum of money and the interest and other charges and income due in
accordance with the terms, provisions and limitations of this Mortgage, the Note
(and all extensions, renewals, refinancings, modifications, amendments, and
replacements thereof), and the Loan Agreement and the performance of the
covenants and agreements herein contained by Mortgagor to be performed, and the
performance of the covenants and agreements contained in the Loan Agreement to
be performed by the Borrower, and also in consideration of the sum of One Dollar
($1.00) in hand paid, the receipt of which is hereby acknowledged, does by these
presents MORTGAGE and CONVEY unto Mortgagee, its successors and assigns, the
real estate described on Exhibit A attached hereto and all of its estate, right,
title and interest therein, situated, lying and being in the City of Barrington,
County of Lake, and State of Illinois, which, with the property hereinafter
described, is referred to herein as the "Premises";
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TOGETHER with all improvements, tenements, easements,
fixtures, and appurtenances thereto belonging, and all rents, issues, profits
and monies for so long and during all such times as Mortgagor may be entitled
thereto (which are pledged primarily and on a parity with the real estate and
not secondarily), including, without limiting the foregoing, if and to the
extent owned by Mortgagor or the Borrower: (a) all fixtures, fittings,
furnishings, appliances, apparatus, equipment and machinery including, without
limitation, all gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, ranges, ovens, elevators and motors, bathtubs, sinks, water
closets, basins, pipes, faucets and other air-conditioning, plumbing and heating
fixtures, mirrors, mantles, refrigerating plants, refrigerators, iceboxes,
dishwashers, carpeting, furniture, laundry equipment, cooking apparatus and
appurtenances, and all building material, supplies and equipment now or
hereafter delivered to the Premises and intended to be installed therein; all
other fixtures and personal property of whatever kind and nature at present
contained in or hereafter placed in any building standing on the Premises; such
other goods, equipment, chattels and personal property as are usually furnished
by landlords in letting other premises of the character of the Premises; and all
renewals or replacements thereof or articles in substitution thereof; and all
proceeds and profits thereof and all of the estate, right, title and interest of
the Mortgagor in and to all property of any nature whatsoever, now or hereafter
situated on the Premises or intended to be used in connection with the operation
thereof; (b) all of the right, title and interest of Mortgagor or the Borrower
in and to any fixtures or personal property subject to a lease agreement,
conditional sale agreement, chattel mortgage, or security agreement, and all
deposits made thereon or therefor, together with the benefit of any payments now
or hereafter made thereon; (c) all leases and use agreements of machinery,
equipment and other personal property of Mortgagor or the Borrower in the
categories hereinabove set forth, under which Mortgagor is the lessee of, or
entitled to use, such items; (d) all rents, income, profits, revenues, receipts,
leases, tenancies, licenses or other use agreements or arrangements now existing
or hereafter created of the Premises or any part thereof including any business
conducted thereon) with the right to receive and apply the same to indebtedness
due Mortgagee and Mortgagee may demand, xxx for and recover such payments but
shall not be required to do so; (e) all judgments, awards of damages and
settlements hereafter made as a result of or in lieu of any taking of the
Premises of any part thereof or interest therein under the power of eminent
domain, or for any damage (whether caused by such taking or otherwise) to the
Premises or the improvements thereon or any part thereof or interest therein,
including any award for change of grade of streets; (f) all proceeds of the
conversion, voluntary or involuntary of any of the foregoing into cash or
liquidated claims; (g) any monies on deposit for the payment of real estate
taxes or special assessments against the Premises or for the payment of premiums
on policies of fire and other hazard insurance covering the collateral described
hereunder or the Premises, and all proceeds paid for damage done to the
collateral described hereunder or the Premises; and (h) all substitutions,
replacements, additions and proceeds, including insurance and condemnation award
proceeds, of any of the foregoing property; it being understood that the
enumeration of any specific articles of property shall in no way exclude or be
held to exclude any items of property not specifically mentioned. All of the
land, estate and property hereinabove described, real, personal and mixed,
whether affixed or annexed or not (except where otherwise hereinabove specified)
and all rights hereby conveyed and mortgaged are intended so to be as a unit and
are hereby understood, agreed and declared to form a part and parcel of the real
estate and to be appropriated to the use of the real estate, and shall be for
the purposes of this Mortgage deemed to be real estate
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and conveyed and mortgaged hereby. As to any of the property aforesaid which
(notwithstanding the aforesaid declaration and agreement) does not so form a
part and parcel of the real estate, this Mortgage is hereby deemed to be, as
well, a security agreement under the Uniform Commercial Code in effect in the
jurisdiction in which the Premises are located (hereinafter referred to as the
"UCC") for the purpose of creating a security interest in such property, which
Mortgagor hereby grants to Mortgagee as Secured Party (as defined in the UCC),
securing the indebtedness and obligations of Mortgagor and/or Borrower, and
Mortgagee shall have in addition to its rights and remedies hereunder all rights
and remedies of a Secured Party under the UCC. As to above personal property
which the UCC classifies as fixtures, this instrument shall constitute a fixture
filing and financing statement under the UCC.
Mortgagor covenants (a) that it is lawfully seized of the
Premises, (b) that the same are subject only to (i) the liens, encumbrances,
conditions, restrictions, easements, leases, and other matters, rights or
interests disclosed in Schedule B (or an equivalent section or portion) of the
mortgage loan title insurance policy delivered to Mortgagee, and (ii) matters
disclosed in writing by Mortgagor to Mortgagee, and (c) that it has good right,
full power and lawful authority to convey and mortgage the same and that it will
forever defend the Premises and the quiet and peaceful possession of the same
against the lawful claims of all persons whomsoever.
TO HAVE AND TO HOLD the Premises unto the Mortgagee, its
successors and assigns, forever, for the purposes and uses herein set forth.
IT IS FURTHER UNDERSTOOD AND AGREED THAT:
2. Maintenance, Repair and Restoration of Improvements,
Payment of Prior Liens. Mortgagor shall (a) promptly repair, restore or rebuild
any buildings or improvements now or hereafter on the Premises which may become
damaged or be destroyed; (b) keep the Premises in good condition and repair,
without waste, and free from mechanics' liens or other liens or claims for lien
not expressly subordinated to the lien hereof (except for mechanics' liens being
contested in good faith and as to which adequate reserves have been set aside in
conformity with generally accepted accounting principles consistently maintained
by the Borrower); (c) pay when due any indebtedness which may be secured by a
lien or charge on the Premises superior to the lien hereof, and upon request
exhibit satisfactory evidence of the discharge of such prior lien to Mortgagee;
(d) complete within a reasonable time all public improvements and any building
or buildings now or at any time in process of construction upon the Premises;
(e) comply with all requirements of law, municipal ordinances, or restrictions
of record with respect to the Premises and the use thereof; (f) make alterations
in the Premises only in accordance with plans and specifications duly approved
by Mortgagee; (g) suffer or permit no change in the general nature of the
occupancy of the Premises, without Mortgagee's written consent; (h) initiate or
acquiesce in no zoning variation or reclassification, without Mortgagee's
written consent; (i) pay the indebtedness secured hereby when due according to
the terms hereof or of the Loan Agreement and the Note.
3. Payment of Taxes. Mortgagor shall pay, before any penalty
attaches (except to the extent diligently contested in good faith by appropriate
proceedings and provided proper reserves are established on the books of the
Borrower), all general taxes, and shall pay special taxes, special assessments,
water charges, sewer service charges, and other charges against the Premises
when
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due, and shall furnish to Mortgagee paid tax receipts within sixty (60) days
after the final due date of such taxes. Mortgagee reserves the right to require
Mortgagor to make monthly deposits into an escrow account established and
controlled by Mortgagee for the payment of taxes under terms and in an amount
satisfactory to Mortgagee.
4. Insurance. Mortgagor shall cause all buildings and
improvements now or hereafter situated on the Premises to be insured against
loss or damage by fire and such other hazards as may be requested from time to
time by Mortgagee, including, but not limited to, hazards ordinarily insured
against by other companies similarly situated in operating like businesses and
properties, and including comprehensive public liability insurance as required
by Mortgagee and flood insurance if the Premises is within an area designated by
any government agency as a flood risk area. All policies of insurance to be
furnished hereunder shall be in forms, companies and amounts satisfactory to
Mortgagee, with mortgagee clauses attached to all policies in favor of and in
form satisfactory to Mortgagee, including a provision requiring that the
coverage evidenced thereby shall not be terminated or materially modified
without thirty (30) days' prior written notice to Mortgagee. Without limiting
the generality of the foregoing, property and casualty insurance shall be in
amounts and forms insuring the full replacement cost of fixed assets of the
Borrower. All policies shall name Mortgagee as an additional insured and as loss
payee. Mortgagor shall deliver all policies, including additional and renewal
policies, to Mortgagee, and, in the case of insurance about to expire, shall
deliver renewal policies not less than ten (10) days prior to their respective
dates of expiration. 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 Mortgagee is included thereon under a standard mortgagee clause
acceptable to Mortgagee. Mortgagor shall immediately notify Mortgagee whenever
any such separate insurance is taken out and shall promptly deliver to Mortgagee
the policy or policies of such insurance.
5. Adjustment of Losses With Insurer and Application of
Proceeds of Insurance. In case of loss or damage by fire or other casualty,
Mortgagee is authorized to (a) settle and adjust any claim under insurance
policies which insure against such risks, or (b) allow Mortgagor to agree with
the insurance company or companies on the amount to be paid in regard to such
loss. In either case, Mortgagee is authorized to collect and issue a receipt for
any such insurance money. At the option of Mortgagee, such insurance proceeds
may be applied in reduction of the indebtedness secured hereby, whether due or
not, or may be held by Mortgagee and used to reimburse Mortgagor for the cost of
the rebuilding or restoration of buildings or improvements on the Premises. Irre
spective of whether such insurance proceeds are used to reimburse Mortgagor for
the cost of said rebuilding or restoration or not, and irrespective of whether
such insurance proceeds are or are not adequate for such purpose, the buildings
and improvements shall be so restored or rebuilt so as to be of at least equal
value and substantially the same character as prior to such damage or destruc
tion. If the cost of rebuilding, repairing or restoring the building and
improvements can reasonably exceed the sum of TWENTY-FIVE THOUSAND AND 00/100
DOLLARS ($25,000.00), then Mortgagor shall obtain Mortgagee's approval of plans
and specifications for such work before such work shall be commenced. In any
case, where the insurance proceeds are made available for rebuilding and
restoration, such proceeds shall be disbursed in the manner and under the
conditions that Mortgagee may require and upon Mortgagee being furnished with
satisfactory evidence of the estimated cost of completion thereof and with
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architect's certificates, waivers of lien, contractor's and subcontractors'
sworn statements and other evidence of cost and payments so that Mortgagee can
verify that the amounts disbursed from time to time are represented by completed
and in place work and that the work is free and clear of mechanics' lien claims.
If the estimated cost of completion exceeds the amount of the insurance proceeds
available, Mortgagor immediately shall, on written demand of Mortgagee, deposit
with Mortgagee in cash the amount of such estimated excess cost. No payment made
prior to the final completion of the work shall exceed ninety percent (90%) of
the value of the work performed from time to time, and at all times the
undisbursed balance of the proceeds remaining in the hands of the disbursing
party shall be at least sufficient to pay for the cost of completion of the work
free and clear of liens. Any surplus which may remain out of the insurance
proceeds after payment of the cost of building or restoration shall, at the
option of Mortgagee, be applied on account of the indebtedness secured hereby or
be paid to any party entitled thereto, without interest.
6. Condemnation. Mortgagor hereby assigns, transfers and sets
over unto Mortgagee the entire proceeds of any award or any claim for damages
for any of the Premises taken or damaged under the power of eminent domain or by
condemnation. Mortgagee may elect to apply the proceeds of the award upon or in
reduction of the indebtedness secured hereby, whether due or not, or make the
proceeds available for restoration or rebuilding of the Premises. Irrespective
of whether such proceeds are made available for restoration or rebuilding, and
irrespective of whether such proceeds are adequate for such purpose, the
buildings and improvements shall be restored or rebuilt in accordance with plans
and specifications to be submitted to and approved by Mortgagee. In the event
said proceeds are made available for rebuilding or restoration, the proceeds of
the award shall be disbursed in the manner and under the conditions that
Mortgagee may require and paid out in the same manner as provided in Section 4
hereof for the payment of insurance proceeds toward the cost of rebuilding or
restoration. In such event, if the estimated cost to complete rebuilding or
restoration exceeds the proceeds of the condemnation awards, Mortgagor
immediately shall, on written demand of Mortgagee, deposit with Mortgagee in
cash the amount of such excess cost. Any surplus which may remain out of any
such award after payment of such cost of building or restoration shall, at the
option of Mortgagee, be applied on account of the indebtedness secured hereby or
be paid to any party entitled thereto, without interest.
7. Effect of Extensions of Time. If the payment of the
indebtedness secured hereby or any part thereof is extended or varied or if any
part of any security for the payment of the indebtedness secured hereby is
released or additional security is taken, all persons now or at any time
hereafter liable therefor, or interested in the Premises, shall be held to
assent to such extension, variation, or taking of additional security or
release, and their liability and the lien and all provisions of this Mortgage
shall continue in full force, the right of recourse against all such persons
being expressly reserved by Mortgagee, notwithstanding such extension,
variation, taking of additional security or release.
8. Effect of Changes in Laws Regarding Taxation. In the event
of the enactment after this date of any law of the state in which the Premises
is located deducting from the value of the land for the purpose of taxation any
lien thereon, or imposing upon Mortgagee the payment of the whole or any part of
the taxes or assessments or charges or liens herein required to be paid by
Mortgagor, or changing in any way the laws relating to the taxation of mortgages
or debts
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secured by mortgages or Mortgagee's interest in the Premises, or the manner of
collection of taxes, so as to affect this Mortgage or the indebtedness secured
hereby or the holders thereof, then, and in any event, Mortgagor, upon demand by
Mortgagee, shall pay such taxes or assessments, or reimburse Mortgagee therefor,
provided, however, that if in the opinion of counsel for Mortgagee (a) it might
be unlawful to require Mortgagor to make such payment or (b) the making of such
payment might result in the imposition of interest beyond the maximum amount
permitted by law, then and in such event, Mortgagee may elect, by notice in
writing given to Mortgagor, to declare all of the indebtedness secured hereby to
be and become due and payable sixty (60) days after the giving of such notice.
9. Mortgage as Security. The proceeds of the loan secured
hereby are to be disbursed by Mortgagee to Mortgagor and its beneficiaries, in
accordance with the provisions contained in the Loan Agreement. All advances and
indebtedness arising and accruing under the Loan Agreement from time to time,
whether or not the total amount thereof may exceed the face amount of the Note,
shall be secured hereby to the same extent as though the Loan Agreement were
fully incorporated in this Mortgage. In the event of any inconsistencies or
conflicts between this Mortgage and the Loan Agreement, the terms of the Loan
Agreement shall govern and control.
10. Mortgagee's Performance of Defaulted Acts. In case of
default herein, Mortgagee may, but need not, make any payment or perform any act
herein required of Mortgagor in any form and manner deemed expedient, 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 Landlord 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 attorneys' fees, and any other monies advanced
by Mortgagee in regard to any tax or any leases of the Premises or to protect
the Premises and the lien of this Mortgage, shall be so much additional
indebtedness secured hereby, and shall become immediately due and payable on
demand and with interest thereon at the rate per annum applicable under the Note
upon and after an Event of Default under the Loan Agreement. Inaction of
Mortgagee shall never be considered as a waiver of any right accruing to it on
account of any default on the part of Mortgagor.
11. Mortgagee's Reliance on Tax Bills. Mortgagee in making any
payment hereby authorized: (a) relating to taxes and assessments, may do so
according to any xxxx, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien
or title or claim thereof; or (b) for the purchase, discharge, compromise or
settlement of any other prior lien, may do so without inquiry as to the validity
or amount of any claim for lien which may be asserted.
12. Acceleration of Indebtedness in Case of Default. If (a)
default is made in the due and punctual payment of the principal (or any part(s)
thereof) of the Note, or the Mortgagor or the Borrower fails to pay, within (10)
days after the date on which payment thereof is due, any installment of interest
on the Note or any other sum due and payable under the Loan Agreement, the Note,
or this Mortgage; or (b) default shall be made in the due observance or
performance of any other of the covenants, agreements or conditions herein
contained,
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required to be kept or performed or observed by Mortgagor or the Borrower; or
(c) default shall be made in the due observance or performance of any of the
covenants, agreements or conditions contained, required to be kept or observed
by Mortgagor or the Borrower in any other instrument given at any time to secure
the payment of the Note; or (d) an Event of Default shall occur under the Loan
Agreement; or (e) Mortgagor or the Borrower or any guarantor of the indebtedness
secured hereby becomes insolvent or bankrupt or admits in writing its inability
to pay its debts as they mature, or makes an assignment for the benefit of
creditors, or applies for or consents to the appointment of a trustee or
receiver for a major portion of its property or business; or (f) any petition is
filed or proceeding is commenced for any attachment, levy, or seizure of any
property of Mortgagor or the Borrower or any guarantor of the indebtedness
subject to a lien in favor of Mortgagee; or any judgment or judgments, writ or
writs, warrant or warrants of attachment, or any similar process or processes in
an aggregate amount in excess of $25,000.00 shall be entered or filed against
Mortgagor or the Borrower or any guarantor of the indebtedness or against any
property or assets of Mortgagor or the Borrower or any guarantor of the
indebtedness and remains unvacated, unbonded or unstayed for a period of sixty
(60) days; or (g) bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings for relief under any bankruptcy law
or similar law for the relief of debtors is instituted by or against Mortgagor
or the Borrower or any guarantor of the indebtedness and, if instituted against
Mortgagor or the Borrower or any guarantor of the indebtedness secured hereby,
are allowed against Mortgagor or the Borrower or any guarantor of the
indebtedness or are consented to or are not dismissed within sixty (60) days
after such institution, then and in every such case if default shall be contin
uing the whole of the indebtedness secured hereby shall, at once, at the option
of Mortgagee, become immediately due and payable without notice to Mortgagor.
13. Due on Sale -- Due on Encumbrance. Mortgagee may at its
option accelerate the maturity date of the indebtedness evidenced by the Note,
whereupon the whole of the indebtedness secured hereby shall at once become
immediately due and payable (without any cure or grace period), if Mortgagor
shall (whether voluntarily or by operation of law), without the prior written
consent of Mortgagee, sell, mortgage, encumber, hypothecate or otherwise
transfer the Premises or any part thereof, or otherwise cease to own the
Premises, or if the Borrower shall (whether voluntarily or by operation of law),
without the prior written consent of Mortgagee, sell, mortgage, encumber,
hypothecate, or otherwise transfer the beneficial interest in Mortgagor of any
portion thereof, or otherwise cease to own the beneficial interest in Mortgagor
or the full power of direction over Mortgagor.
14. Application of Funds. If while any insurance proceeds or
condemna tion awards are being held by Mortgagee to reimburse Mortgagor for the
cost of rebuilding or restoration of buildings or improvements on the Premises,
as set forth in Sections 4 or 5 hereof, or while Mortgagor is holding deposits
for the payment of taxes, Mortgagee shall be or become entitled to, and shall
accelerate the indebtedness secured hereby, then and in such event, Mortgagee
shall be entitled to apply all such insurance proceeds and condemnation awards
and deposits then held by it in reduction of the indebtedness secured hereby,
and any excess held by it over the amount of indebtedness then due shall be
returned to Mortgagor or any party entitled thereto, without interest.
15. Foreclosure; Expense of Litigation. When the indebtedness
hereby secured, or any part thereof, shall become due, whether by acceleration
or
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otherwise, Mortgagee shall have the right to foreclose the lien of this Mortgage
for such indebtedness or part thereof. In any civil action to foreclose the lien
of this Mortgage, there shall be allowed and included as additional indebtedness
in the order or judgment for sale all expenditures and expenses which may be
paid or incurred by or on behalf of Mortgagee for attorneys' fees, appraiser's
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 order or judgment) of procuring all such abstracts of title,
title searches and examinations, title insurance policies, Torrens certificates,
and similar data and assurances with respect to title as Mortgagee may deem
reasonably necessary either to prosecute such civil actions or to evidence to
bidders at any sale which may be had pursuant to such order or judgment 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 expenses and fees as
may be incurred in the protection of the Premises and maintenance of the lien of
this Mortgage, including the fees of any attorney employed by Mortgagee in any
litigation or proceeding affecting this Mortgage, the Note or the Premises,
including probate, bankruptcy and appellate proceedings, or in preparations for
the commencement or defense of any proceeding or threatened civil actions or
proceeding shall be immediately due and payable by Mortgagor, with interest
thereon at the rate of interest applicable under the Note upon the occurrence of
an Event of Default under the Loan Agreement, and shall be secured by this
Mortgage.
16. Application of Proceeds of Foreclosure Sale. The proceeds
of any foreclosure sale of the Premises shall be distributed and applied in the
following order of priority: first, on account of all costs and expenses
incident to the foreclosure proceedings, including all such items as are
mentioned in Section 14 hereof; second, all other items which may under the
terms hereof or the Loan Agreement constitute secured indebtedness additional to
that evidenced by the Note, with interest thereon as provided herein or in the
Loan Agreement; third, all principal and interest remaining unpaid on the Note;
and fourth, any overplus to Mortgagor, its successors or assigns, as their
rights may appear.
17. 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 may appoint a receiver of the Premises. Such appointment may
be made either before or after sale, without notice, without regard to the
solvency or insolvency of Mortgagor at the time of application for such receiver
and without regard to the then value of the Premises or whether the same shall
be then occupied as a homestead, and Mortgagee or any 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 during the pendency of such foreclosure suit
and during the full statutory period of redemption, whether there be redemption
or not, as well as during any further times when Mortgagor, except for the
intervention of such receiver, would be entitled to collect such rents, issues
and profits, and all other powers which may be necessary or are usual in such
cases for the protection, possession, control, management and operation of the
Premises during the whole of such period. The court from time to time may
authorize the receiver to apply the net income in his hands to the payment in
whole or in part of: (a) the indebtedness secured hereby, or by any judgment or
order 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
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such application is made prior to foreclosure sale; and (b) the deficiency in
case of a sale and deficiency.
18. Mortgagee's Right of Possession in Case of Default. In any
case in which under the provisions of this Mortgage, Mortgagee has a right to
institute foreclosure proceedings, whether before or after the whole
indebtedness secured hereby is declared to be immediately due, or whether before
or after the institution of legal proceedings to foreclose the lien hereof or
before or after sale thereunder, forthwith, upon demand of Mortgagee, Mortgagor
shall surrender to Mortgagee and Mortgagee shall be entitled to take actual
possession of the Premises or any part thereof personally, or by its agent or
attorneys. In such event Mortgagee in its discretion may, in accordance with
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 of
Mortgagor or the then owner of the Premises relating thereto, and may exclude
Mortgagor, its agents or servants, wholly therefrom and may as attorney in fact
or agent of Mortgagor, or in its own name as Mortgagee and under the powers
herein granted, hold, operate, manage and control the Premises and conduct the
business, if any, thereof, either personally or by its agents, and with full
power to use such measures, legal or equitable, as in its discretion or in the
discretion of its successors or assigns 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, and with full power to: (a) cancel or
terminate any lease or sublease for any cause or on any ground which would
entitle 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 make new leases, which extensions, modifications and
new leases may provide for terms to expire, or for options to lessees to extend
or renew terms to expire, beyond the maturity date of the indebtedness hereunder
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 Mortgagor and all persons whose interests in the Premises are
subject to the lien of this Mortgage and upon the purchaser or purchasers at any
foreclosure sale, notwithstanding any redemption from a foreclosure of this
Mortgage, discharge of the indebtedness secured hereby, satisfaction of any
foreclosure decree, or issuance of any certificate of sale or deed to any
purchaser; (d) make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and improvements to the
Premises as to it may seem judicious; (e) insure and reinsure the same and all
risks incidental to Mortgagee's possession, operation and management thereof;
and (f) receive all of such avails, rents, issues and profits, hereby granting
full power and authority to exercise each and every of the rights, privileges
and powers herein granted at any and all times hereafter, without prior notice
to Mortgagor provided that Mortgagor shall give subsequent notice thereof.
Mortgagee shall not be obligated to perform or discharge, nor does it hereby
undertake to perform or discharge, any obligation, duty or liability under any
leases. Mortgagor shall and does hereby agree to indemnify and hold Mortgagee
harmless of and from any and all liability, loss, damage, or expense (including
reasonable attorneys' fees) which Mortgagee may or might incur under said leases
or under or by reason of the assignment thereof and of and from any and all
claims and demands whatsoever which may be asserted against it by reason of any
alleged obligations or undertakings on its part to perform or dis charge any of
the terms, covenants or agreements contained in said leases. Should Mortgagee
incur any such liability, loss or damage, under said leases or
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under or by reason of the assignment thereof, or in the defense of any claims or
demands, the amount thereof, including costs, expenses and reasonable attorneys'
fees, shall be secured hereby, and Mortgagor shall reimburse Mortgagee therefor
immediately upon demand.
19. Application of Income Received by Mortgagee. Mortgagee, in
the exercise of the rights and powers conferred herein, 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 Mortgagee may
determine:
(a) to the payment of the operating expenses of the
Premises, including cost of management, 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;
(c) to the payment of all repairs, replacements,
alterations, additions, betterments, and improvements of the Premises
and of placing the Premises in such condition as will, in the judgment
of Mortgagee, make it readily marketable;
(d) to the payment of any indebtedness secured hereby
or any deficiency which may result from any foreclosure sale.
20. Rights Cumulative. Each right, power and remedy herein
conferred upon Mortgagee is cumulative and in addition to every other right,
power or remedy, express or implied, given now or hereafter existing, 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 Mortgagee, 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 Mortgagee 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 default or acquiescence
therein.
21. Compliance With Illinois Mortgage Foreclosure Law. In the
event that any provision in this Mortgage shall be inconsistent with any
provision of the Illinois Mortgage Foreclosure Law (Sections 735 ILCS 5/15-1101
et seq., Illinois Compiled Statutes) (herein called the "Act"), the 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. If any provision of this
Mortgage shall grant to Mortgagee any rights or remedies upon default of
Mortgagor which are more limited than the rights that would otherwise be vested
in Mortgagee under the Act in the absence of said provision, Mortgagee shall be
vested with the rights granted in the Act to the full extent permitted by law.
Without limiting the generality of the foregoing, all expenses incurred by
Mortgagee to the extent reimbursable under Sections 735 ILCS 5/15-1510 and 15-
1512 of the Act, whether incurred before or after any decree or judgment of
foreclosure, and whether enumerated in Section 14 of this Mortgage, shall be
added to the indebtedness secured by this Mortgage or by the judgment of foreclo
sure.
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22. Waiver of Statutory Rights. Mortgagor shall not apply for
or avail itself of any appraisal, valuation, stay, extension or exemption laws,
or any so-called "Moratorium Laws," now existing or hereafter enacted, in order
to prevent or hinder the enforcement or foreclosure of this Mortgage, but hereby
waives the benefit of such laws. Mortgagor, for itself, and all who may claim
through or under it, waives any and all right to have the property and estates
comprising the Premises marshaled upon any foreclosure of the lien hereof and
agrees that any court having jurisdiction to foreclose such lien may order the
Premises sold as an entirety. Mortgagor does hereby expressly waive any and all
rights of redemption from any order, judgment or decree of foreclosure of this
Mortgage on behalf of Mortgagor, the trust estate and all persons beneficially
interested therein, and each and every person acquiring any interest in or title
to the Premises subsequent to the date of this Mortgage. Mortgagor hereby
represents and warrants to Mortgagee that it has been directed in writing by the
appropriate beneficiaries and holders of the power of direction of the trust
estate to expressly waive all rights of redemption to the Premises and
reinstatement of the loan secured hereby in the manner herein set forth.
Mortgagor does hereby further expressly waive, to the extent now or hereafter
permitted by law, all rights of reinstatement of this Mortgage pursuant to
Section 15-1602 of the Act.
23. Waiver of Notice. No action for the enforcement of the
lien or of any provision hereof shall be subject to any defense which would not
be good and available to the party interposing same in an action at law upon the
Note.
24. Release upon Payment and Discharge of Mortgagor's
Obligations. Mortgagee shall release this Mortgage and the lien thereof by
proper instrument upon payment and discharge of all indebtedness secured hereby,
in accordance with the terms and conditions in the Note and the Loan Agreement,
and including a reasonable fee to Mortgagee for the execution of such release.
25. Filing and Recording Fees. Mortgagor will pay all filing,
registration or recording fees, and all expenses incident to the execution and
acknowledgment of this Mortgage and all federal, state, county, and municipal
taxes, and other taxes, duties, imposts, assessments and charges arising out of
or in connection with the execution and delivery of the Note and this Mortgage.
26. Compliance With Laws. Except as disclosed in writing to
Mortgagee on or before the date hereof, the Premises and its present use
complies, and at all times shall comply, with all applicable laws and
governmental regulations including, without limitation, all applicable federal,
state and local laws pertaining to air and water quality, hazardous waste, waste
disposal, air emissions and other environmental matters, all zoning and other
land use matters, and utility availability. Except as disclosed in writing to
Mortgagee on or before the date hereof, neither Mortgagor nor, to the best of
Mortgagor's knowledge, any previous owner or occupier of the Premises, used,
generated, stored or disposed of, on, under or about the Premises any Hazardous
Materials. For purposes of this Mortgage, Hazardous Materials shall mean and
include any hazardous substance, hazardous material, toxic substance, solid
waste, or any pollutant or contaminant now or hereafter defined as such in (or
for purposes of) the Comprehensive Environmental Response, Compensation, and
Liability Act, any so-called applicable "Superfund" or "Superlien" or
"Non-priority lien" law, the Toxic Substances Control Act, or the Resource
Conservation and Recovery Act, all as amended from time to time. Further, to the
best of Mortgagor's knowledge, except as disclosed in writing to Mortgagee on or
before the date hereof, the Premises does not contain any underground tanks and
does not contain and has not
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in the past contained any asbestos-containing material in friable form. Mortga
gor shall protect, indemnify and hold harmless Mortgagee, its directors,
officers, employees, agents, successors and assigns, from and against any and
all loss, damage, cost, expense or liability (including attorneys' fees and
costs) directly or indirectly arising out of or attributable to the use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or presence of Hazardous Materials or asbestos on, under or
about the Premises including without limitation (a) all foreseeable
consequential damages; and (b) the costs of any required or necessary repair,
cleanup or detoxification of the Premises and the preparation and implementation
of any closure, remedial or other required plans. This indemnity shall survive
the payment of the Note and the reconveyance or release of the lien of this
Mortgage, or the extinguishment of the lien by foreclosure or action in
reconveyance or extinguishment or deed in lieu of foreclosure. This indemnity
shall not apply to any claims, losses, liabilities, damages, penalties, and
expenses which are incurred by Mortgagee solely as a direct result of any act or
omission of the Mortgagee and which are not the result, in whole or in part, of
any pre-existing condition or event. In the event that any investigation, site
monitoring, containment, clean-up, removal, restoration or other remedial work
of any kind or nature (the "Remedial Work") is reasonably necessary or desirable
under any applicable local, state or federal law or regulation, any judicial
order, or by any governmental entity or person because of, or in connection
with, the current or future presence, suspected presence, release or suspected
release of any Hazardous Materials in or about the air, soil, ground water,
surface water or soil vapor at, on, about, under or within the Premises (or any
portion thereof), Mortgagor shall within thirty (30) days after written demand
for performance thereof by Mortgagee (or such shorter period of time as may be
required under any applicable law, regulation, order or agreement), commence and
thereafter diligently prosecute to completion, all the Remedial Work. All
Remedial Work shall be performed by contractors approved in advance by
Mortgagee, and under the supervision of a consulting engineer approved by
Mortgagee. All costs and expenses of Remedial Work shall be paid by Mortgagor
including, without limitation, Mortgagee's reasonable attorneys' fees and costs
incurred in connection with monitoring or review of the Remedial Work. In the
event Mortgagor shall fail to timely prosecute to completion, the Remedial Work,
Mortgagee may, but shall not be required to, cause the Remedial Work to be
performed and all costs and expenses thereof, or incurred in connection
therewith, shall become part of the indebtedness secured hereby.
27. Indemnity. Mortgagor agrees to indemnify and hold harmless
Mortgagee from and against any and all losses, liabilities, suits, obligations,
fines, damages, judgments, penalties, claims, charges, costs and expenses
(including attorneys' fees and disbursements) which may be imposed on, incurred
or paid by or asserted against Mortgagee by reason or on account of, or in
connection with, (a) any willful misconduct of Mortgagor or any default by
Mortgagor hereunder or under any other documents executed at any time to secure
the payment of the Note, (b) Mortgagee's good faith and commercially reasonable
exercise of any of its rights and remedies, or the performance of any of its
duties, hereunder or under any other documents executed at any time to secure
payment of the Note, (c) the construction, reconstruction or alteration of the
Premises, (d) any negligence of Mortgagor, or any negligence or willful
misconduct of any lessee of the Premises, or any of their respective agents,
contractors, subcontractors, servants, employees, licensees or invitees or (e)
any accident, injury, death or damage to any person or property occurring in, on
or about the Premises or any street, drive, sidewalk, curb or passageway
-12-
adjacent thereto, except for the willful misconduct or gross negligence of the
indemnified person. Any amount payable to Mortgagee under this Section shall be
due and payable within ten (10) days after demand therefor and receipt by
Mortgagor of a statement from Mortgagee setting forth in reasonable detail the
amount claimed and the basis therefor, and such amounts shall bear interest,
from and after the date such amounts are paid by Mortgagee until paid in full by
Mortgagor, at the rate of interest applicable under the Note upon the occurrence
of an Event of Default under the Loan Agreement. Mortgagor's obligations under
this Section shall not be affected by the absence or unavailability of insurance
covering the same or by the failure or refusal by any insurance carrier to
perform any obligation on its part under any such policy of covering insurance.
If any claim, action or proceeding is made or brought against Mortgagor and/or
Mortgagee which is subject to the indemnity set forth in this Section, Mortgagor
shall resist or defend against the same, if necessary, in the name of Mortgagee,
by attorneys for Mortgagor's insurance carrier (if the same is covered by
insurance) or otherwise by attorneys approved by Mortgagee. Notwithstanding the
foregoing, Mortgagee, in its discretion, may engage its own attorneys to resist
or defend, or assist therein, and Mortgagor shall pay, or, on demand, shall
reimburse Mortgagee for the payment of, the reasonable fees and disbursements of
Mortgagee's attorneys.
28. Giving of Notice. Any notice which either party hereto may
desire or be required to give to the other party shall be in writing and shall
be given in person or by the mailing thereof by certified mail addressed to
Mortgagor at: First American Bank, 000 X. Xxxx Xxxxxx, Xxxx Xxxxxx, XX 00000 or
to Mortgagee at: First American Bank, 0000 Xxxxx Xxxxxx, Xxx Xxxxx Xxxxxxx,
Xxxxxxxx 00000, or at such other place as any party hereto may by notice in
writing designate as a place for service of notice.
29. Miscellaneous.
(a) This Mortgage, and all provisions hereof, shall
extend to and be binding upon Mortgagor and its successors, grantees
and assigns, any subsequent owner or owners of the Premises and all
persons claiming under or through Mortgagor, and the word "Mortgagor"
when used herein shall include all such persons and all persons liable
for the payment of the indebtedness secured hereby or any part thereof,
whether or not such persons shall have executed the Note or this
Mortgage. The word "Mortgagee" when used herein shall include the
successors and assigns of Mortgagee named herein, and the holder or
holders, from time to time, of the Note. The word "indebtedness" when
used herein shall include the principal sum evidenced by the Note,
together with all interest, additional interest, and late charges
thereon and other sums due thereunder and all other sums due to
Mortgagee under the Loan Agreement or this Mortgage. The word "Note"
when used herein shall include all extensions, renewals, refinancings,
modifications, amendments, and replacements thereof.
(b) In the event one or more of the provisions
contained in this Mortgage or the Note or in any other security
documents given to secure the payment of the Note shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall, at the option of
Mortgagee, not affect any other provision of this Mortgage, and this
Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
This Mortgage shall be construed and governed by the laws of the State
of Illinois.
-13-
(c) At all times, regardless of whether any loan
proceeds have been disbursed, this Mortgage secures (in addition to any
loan proceeds disbursed from time to time) the payment of any and all
expenses and advances due to or incurred by Mortgagee in connection
with the indebtedness secured hereby, provided, however,
notwithstanding anything to the contrary herein, the total aggregate
indebtedness secured by this Mortgage shall not exceed an amount equal
to two (2) times the face amount of the Note.
(d) No offset or claim that Mortgagor now has or may
have in the future against Mortgagee shall relieve Mortgagor from
paying any amounts due under the Note or from performing any other
obligations contained herein or secured hereby.
(e) Mortgagor shall not by act or omission permit any
building or other improvement on the 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 Mortgagor hereby assigns to Mortgagee any and all rights to give
consent for all or any portion of the Premises or any interest therein
to be 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. Mortgagor shall not by act or omission impair the
integrity of the Premises as zoned for its present or intended use. Any
act or omission by Mortgagor which would result in a violation of any
of the provi sions of this Section shall be void.
(f) Mortgagee shall have the right to inspect the
Premises at all reasonable times and access thereto shall be permitted
for that purpose.
30. Exculpatory. This Mortgage is executed by First American
Bank, not personally but as Trustee as aforesaid in the exercise of the power
and authority conferred upon and vested in it as Trustee, and it is expressly
understood and agreed that nothing herein or in the Note contained shall be
construed as creating any liability on First American Bank personally to pay the
Note or any interest that may accrue thereon, or any indebtedness, or to perform
any covenant, either express or implied, herein contained, all such liability,
if any, being expressly waived by Mortgagee and by every person now or hereafter
claiming any right or security hereunder, and that so far as First American Bank
personally is concerned, the legal holder or holders of the Note and the owner
or owners of any indebtedness shall look solely to the Premises hereby conveyed
for the payment thereof, by the enforcement of the lien hereby created, in the
manner herein provided, by action against any other security given at any time
to secure the payment of the Note and by action to enforce the personal
liability of the guarantors, if any.
IN WITNESS WHEREOF, the Mortgagor has executed this instrument
the day and year first written above.
First American Bank
not personally but as Trustee
as aforesaid
BY:__________________________
Its:______________________
ATTEST:________________________
____________________________
Its:________________________
-00-
XXXXX XX XXXXXXXX )
) SS
COUNTY OF _______ )
I___________________________, a Notary Public in and for said
County in the State aforesaid, DO HEREBY CERTIFY THAT __________________________
and __________________________, personally known to me and known by me to be the
__________________________and __________________________, respectively, of First
American Bank, in whose name, as Trustee, the above and foregoing instrument is
executed, appeared before me this day in person and acknowledged that they
signed and delivered the said instrument as their free and voluntary act and as
the free and voluntary act of said First American Bank, as Trustee as aforesaid,
for the uses and purposes therein set forth, and the said then and there
acknowledged that he, as custodian of the corporate seal of said First American
Bank did affix the said corporate seal to said instrument as his free and
voluntary act and as the free and voluntary act of said First American Bank, as
Trustee as aforesaid, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this ___ day of _______,
19___.
____________________________
Notary Public
My Commission Expires:
____________________________
-15-
EXHIBIT A
Legal Description
THAT PART OF THE SOUTH 1/2 OF SECTION 21, TOWNSHIP 43 NORTH, RANGE 9, EAST OF
THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS: COMMENCING AT A POINT IN THE
EAST LINE OF THE WEST 1/2 OF THE SOUTH EAST 1/4 OF SAID SECTION 21, 983.62 FEET
NORTH OF THE SOUTHEAST CORNER THEREOF; THENCE WEST PARALLEL WITH THE SOUTH LINE
OF SAID SOUTH EAST 1/4, 699.98 FEET; THENCE NORTHERLY 332.59 FEET TO A POINT
323.17 FEET NORTH AND 648.28 FEET WEST OF THE POINT OF BEGINNING; THENCE
EASTERLY PARALLEL TO THE SOUTH LINE OF SAID SOUTH EAST 1/4, 648.28 FEET TO THE
EAST LINE OF THE WEST 1/2 OF SAID SOUTH EAST 1/4; THENCE SOUTH 323.17 FEET TO
THE POINT OF BEGINNING, (EXCEPTING THEREFROM THE EAST 33 FEET THEREOF) IN LAKE
COUNTY, ILLINOIS.
PIN: 00-00-000-000
COMMONLY KNOWN AS: 00000 XXXXX XXXXXX XXXX, XXXXXXXXXX, XXXXXXXX 00000
JOINDER
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, the undersigned, being the owner
of 100% of the beneficial interest in the land trust known as First American
Bank ("Mortgagor"), hereby joins in the Mortgage made by Mortgagor in favor of
First American Bank ("Mortgagee") for purposes of: (a) conveying, mortgaging,
warranting, granting, transferring, setting over, and assigning to Mortgagee,
all of its right, title, and interest in and to the real property described
therein, including, without limitation, all of the buildings, structures, and
improvements now or at any time hereafter erected, constructed, or situated on
such real property or any part thereof and all machinery, apparatus, equipment,
personal property, and fixtures of every kind and nature whatsoever now or at
any time hereafter located in, on, or about such real property or any part
thereof, and any and all rents, issues, income, and profits of and from such
real property and all other property that, if owned by Mortgagee, would form a
portion of the Premises subject to the lien of the Mortgage; and (b) agreeing
that to the extent the undersigned has the right, power, or obligation to
perform or cause the performance of any act that Mortgagor is required to
perform in the Mortgage or has the right, power, or obligation to prohibit or
limit or cause the prohibition or limitation of any act that is prohibited or
limited under the Mortgage, the undersigned shall act to cause the compliance
with the provisions thereof.
IN WITNESS WHEREOF, the undersigned has joined in the
foregoing Mortgage by executing and delivering this Joinder as of August 24,
1998.
CTI Industries
By:____________________________
Xxxxxxx X. Xxxxxxx,
Chief Executive Officer
STATE OF ILLINOIS )
) SS
COUNTY OF _______ )
The undersigned, a notary public in and for the county and
state aforesaid, do hereby certify that Xxxxxxx X. Xxxxxxx, the Chief Executive
Officer of CTI Industries, who is personally known to me to be the same person
whose name is subscribed to the foregoing instrument as such officer appeared
before me this day in person and acknowledged that he signed and delivered the
said instrument as such officer as his own free and voluntary act and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth, and caused the corporate seal of said corporation to be affixed
thereto.
Given under my hand and notarial seal on _____________, 19__.
_________________________
Notary Public
THIS INSTRUMENT WAS )
PREPARED BY AND AFTER )
RECORDING RETURN TO: )
Xxxxxx X. Xxxxxx )
First American Bank )
0000 Xxxxx Xxxxxx )
Elk Grove Village, )
Illinois 60007 )
)
PERMANENT INDEX #: )
00-00-000-000 )
)
STREET ADDRESS: )
00000 Xxxxx Xxxxxx Xxxx )
Xxxxxxxxxx, XX 00000 )
