EXHIBIT 10.27




           This instrument was prepared by and after recording should
                                 be returned to:
                              Stephen N. Sher, Esq.
                                Winston & Strawn
                              35 West Wacker Drive
                             Chicago, Illinois 60601





                                                                (North Carolina)

                DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF
                    LEASES AND RENTS AND FINANCING STATEMENT

                     STANDARD PACKAGING AND PRINTING CORP.,
                                                  Mortgagor
                                       TO

                        CHICAGO TITLE INSURANCE COMPANY,
                                                  Trustee
                               FOR THE BENEFIT OF

                     FIRST SOURCE FINANCIAL, LLP, as Agent,
                                                  Mortgagee
                            Relating to Premises in:

                        Montgomery County, North Carolina

                           DATED: As of July 31, 1998

                       COLLATERAL IS OR INCLUDES FIXTURES
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<S> <C>

THIS INSTRUMENT IS A FUTURE ADVANCES DEED OF TRUST AS PROVIDED IN N.C.G.S.s.s.45-68.
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<PAGE>

                       TABLE OF CONTENTS



       TOPIC                                                                PAGE
       -----                                                                ----

I         RECITALS ............................................................1

II        THE GRANT ...........................................................3

III       GENERAL AGREEMENTS ..................................................6
   3.01   Payment of Indebtedness .............................................6
   3.02   Impositions .........................................................6
   3.03   Payment of Impositions by Mortgagee .................................7
   3.04   Insurance and Insurance Proceeds ....................................7
   3.05   Condemnation Awards .................................................7
   3.06   Restoration .........................................................8
   3.07   Maintenance of Property .............................................8
   3.08   Prohibited Liens and Transfers ......................................8
   3.09   Stamp Taxes .........................................................8
   3.10   Change in Tax Laws ..................................................8
   3.11   Assignment of Leases and Rents ......................................9
   3.12   Releases ...........................................................10
   3.13   Further Assurances .................................................10
   3.14   Environmental Provisions ...........................................11

IV        EVENT OF DEFAULT AND REMEDIES ......................................13
   4.01   Event of Default ...................................................13
   4.02   Acceleration of Maturity ...........................................14
   4.03   Intentionally Deleted ..............................................15
   4.04   Cumulative Remedies; Delay or Omission Not a Waiver ................15
   4.05   Mortgagee's Remedies Against Multiple Parcels ......................15
   4.06   No Merger ..........................................................15
   4.07   Insurance Upon Foreclosure .........................................15
   4.08   Waiver of Statutory Rights .........................................16

V         MISCELLANEOUS ......................................................16
   5.01   Notices ............................................................16
   5.02   Time of Essence ....................................................16
   5.03   Covenants Run with Land ............................................16
   5.04   GOVERNING LAW ......................................................17
   5.05   Rights and Remedies Cumulative .....................................17
   5.06   Severability .......................................................17
   5.07   Non-Waiver .........................................................17
   5.08   Headings ...........................................................17
   5.09   Grammar ............................................................17

                                       ii

<PAGE>

   5.10   Deed in Trust ......................................................17
   5.11   Successors and Assigns .............................................17
   5.12   Mortgagee in Possession ............................................18
   5.13   Compliance with Applicable Law .....................................18
   5.14   Incorporation of Credit Agreement ..................................18
   5.15   Security Agreement .................................................18
   5.16   Additional Provisions ..............................................20
   5.17   Future Disbursements. ..............................................21
   5.18   Reduction of Secured Amount ........................................21
   5.19   Application of Payments and Repayments .............................21
   5.20   Removal of Trustee .................................................21

                                      iii
<PAGE>

                DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT Of
                    LEASES AND RENTS AND FINANCING STATEMENT

       THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS,
AND FINANCING STATEMENT ("Mortgage") is made as of July 31, 1998 by STANDARD
PACKAGING AND PRINTING CORP., a North Carolina corporation ("Mortgagor") with
its principal office at 1140 Hayden Street, Fort Wayne, IN 46803 as trustor, to
Chicago Title Insurance Company, 1211 Avenue of the Americas, 28th Floor, New
York, New York 10036 ("Trustee"), for the ratable benefit of First Source
Financial, LLP ("First Source"), an Illinois Limited liability partnership with
its principal office at 2850 Golf Road, Rolling Meadows, Illinois 60008, as
mortgagee, and as agent for itself, and for and on behalf of the other Lenders
(as hereinafter defined), and as assignee and secured party (together with any
successors or assigns, the "Mortgagee").


                                        I

                                    RECITALS

       WHEREAS, Mortgagor is the owner of that certain real property situated in
Montgomery County, North Carolina;

       WHEREAS, Gibraltar Packaging Group, Inc., a Delaware corporation,
Mortgagee, and certain financial institutions (the "Lenders") from time to time
party to the Credit Agreement (as hereinafter defined) have executed of even
date herewith that certain Secured Credit Agreement (together with any and all
renewals, amendments, modifications, supplements, restatements, extensions for
any period, or increases or rearrangements thereof, the "Credit Agreement"),
pursuant to which Credit Agreement the Lenders have made and may in the future
make term and revolving loans and advances and other financial accommodations to
the Borrower (collectively, "Loans"; each, a "Loan") in the aggregate principal
amount of Forty-Two Million and no/100 Dollars ($42,000,000), upon the terms and
subject to the conditions set forth in the Credit Agreement;

       WHEREAS, capitalized terms used herein without definitions shall have the
meaning assigned to such terms in the Credit Agreement;

       WHEREAS, the Loans are in the form of: (i) a term loan in the aggregate
principal amount of Twenty Five Million and No/100 Dollars ($25,000,000) (the
"Term Loan"), (ii) a revolving credit loan in the aggregate principal amount of
Fifteen Million and No/100 Dollars ($15,000,000) (the "Revolving Credit Loan"),
(iii) a certain Letter of Credit (as defined in Section 1.1 of the Credit
Agreement) up to an amount not to exceed Two Million and No/100 Dollars
($2,000,000);

       WHEREAS, the Revolving Credit Loans and Term Loans are evidenced by
certain promissory notes (the "Notes");
<PAGE>

       WHEREAS, Mortgagor has executed that certain Subsidiary Guaranty of even
date herewith in favor of Mortgagee and the Lenders (the "Guaranty", together
with any and all renewals, amendments, modifications, supplements, restatements,
extensions for any period, or increases or rearrangements thereof), to secure
the "Obligations" (as defined in the Credit Agreement) by pledging to Mortgagee
the capital stock of Mortgagor and its subsidiaries, if any, and by granting to
Mortgagee a security interest in and lien upon all of its personal and real
property;

       WHEREAS, Mortgagor wishes to provide further assurance and security to
Mortgagee and as a condition to Mortgagee and Lenders executing the Credit
Agreement, Mortgagee and Lenders are requiring that Mortgagor grant to Mortgagee
a mortgage lien on the Property (as hereinafter defined) to secure the
Mortgagor's obligations under the Guaranty;

       WHEREAS, subject to the limitations set forth in Section 5.18 of this
Mortgage, this Mortgage is being given by Mortgagor to secure the performance of
all terms, covenants, conditions, agreements and liabilities of Mortgagor
contained in this Mortgage, the Guaranty and other Loan Documents (hereinafter,
collectively, the "Obligations");

       WHEREAS, Mortgagor derives substantial direct and indirect economic
benefit from the making of the Loans and other benefits to be provided to the
Borrower under the Credit Agreement, and other valuable consideration, the
receipt and adequacy of which are hereby acknowledged; and

       WHEREAS, this Mortgage also secures the payment of and includes all
amounts owing in respect of all future or further advances of the Loans as shall
be made at all times, regardless of whether proceeds of the Loans have or shall
be disbursed by Mortgagee herein or its successors or assigns, to and for the
benefit of Mortgagor, its successors or assigns, to the same extent as if such
future advances were made on the date of the execution of this Mortgage. The
total amount of Indebtedness secured by this Mortgage may decrease or increase
from time to time but the total unpaid principal balance so secured at any one
time shall not exceed the lesser of: (i) the maximum principal sum permitted by
the laws of the State in which the Premises are located; or (ii) Eighty-Four
Million and No/100 Dollars ($84,000,000), together with interest thereon and any
and all disbursements made by Mortgagee for the payment of taxes, or insurance
on the Property covered by the lien of this Mortgage and for reasonable
attorneys' fees, loan commissions, service charges, liquidated damages, expenses
and court costs incurred in the collection of any or all of such sums of money.
Such further or future advances shall be considered obligatory advances and the
same shall bear interest at the same rate as specified in the Credit Agreement
unless such interest rate shall be modified by subsequent agreement. The parties
hereby acknowledge and intend that all advances, including future advances
whenever hereafter made, shall be secured by this Mortgage.



                                      -2-
<PAGE>

                                       II

                                    THE GRANT

In consideration of the premises and for the foregoing purposes and for other
good and valuable consideration paid to Mortgagor by the Agent and Lenders, the
receipt and sufficiency of which is hereby acknowledged, Mortgagor hereby
grants, bargains, sells, assigns, releases, aliens, transfers, conveys, warrants
to the Trustee for the ratable benefit of the Agent, Lenders and Secured
Creditors (as defined in that certain Security Agreement ("Security Agreement")
of even date herewith from Mortgagor in favor of the Agent), a lien upon and
security interest in all Mortgagor's right, title and interest in and to the
following (collectively, the "Mortgaged Property"), whether now owned or held or
hereafter acquired:


       NOW, THEREFORE, subject to the limitations set forth in Section 5.18 of
this Mortgage, in order to secure the payment of the Obligations and the
performance of all of the covenants, provisions, agreements and obligations
contained in this Mortgage or in the Loan Documents and also to secure the
payment of any and all Secured Indebtedness, direct or contingent, that may now
or hereafter become owing from Mortgagor to Mortgagee and the Lenders and the
performance of all other obligations under the Loan Documents, and in
consideration of the Premises described on Exhibit A, and all of its estate,
right, claim and interest therein, together with the following described
property, all of which other property is pledged primarily on a parity with the
Premises and not secondarily and for the foregoing purposes and for other good
and valuable consideration paid to Mortgagor by the Agent and Lenders, the
receipt and sufficiency of which is hereby acknowledged, Mortgagor hereby
grants, bargains, sells, assigns, releases, aliens, transfers, conveys, warrants
to the Trustee for the ratable benefit of the Agent and Lenders pursuant to the
that certain Security Agreement ("Security Agreement") of even date herewith
from Mortgagor in favor of the Agent, a lien upon and security interest in all
Mortgagor's right, title and interest in and to the following (the Premises and
the following described rights, interests, claims and property collectively
referred to as the "Property"), whether now owned or held or hereafter acquired:

              (a) all buildings, structures and other improvements of every kind
       and description now or hereafter erected, situated, or placed upon the
       Premises (the "Improvements"), together with any and all Personal
       Property (as defined in Paragraph (i) below) and all attachments now or
       hereafter owned by Mortgagor and located in or on, forming part of,
       attached to, used or intended to be used in connection with, or
       incorporated in any such Improvements, including all extensions of,
       additions to, betterments, renewals of, substitutions for and
       replacements for any of the foregoing;

              (b) all estate, claim, demand, right, title and interest of
       Mortgagor now owned or hereafter acquired, including without limitation,
       any after-acquired title, franchise, license, remainder or reversion, in
       and to any and all (i) land or vaults lying within the right-of-way of
       any street, avenue, way, passage, highway, or alley, open or proposed,
       vacated or otherwise, adjoining the Premises; (ii) alleys, sidewalks,
       streets, 


                                      -3-
<PAGE>

       avenues, strips and gores of land belonging, adjacent or pertaining to
       the Premises or the Improvements; (iii) storm and sanitary sewer, water,
       gas, electric, railway and telephone services relating to the Premises
       and the Improvements; (iv) development rights, air rights, water, water
       rights, water stock, gas, oil, minerals, coal and other substances of any
       kind or character underlying or relating to the Premises or any part
       thereof; and (v) tenements, hereditaments, easements, appurtenances,
       other rights, liberties, reservations, allowances and privileges relating
       to the Premises or the Improvements or in any way now or hereafter
       appertaining thereto, including homestead and any other claims at law or
       in equity;

              (c) all leasehold estates and right, title and interest of
       Mortgagor in any and all leases, subleases, management agreements,
       arrangements, concessions or agreements, written or oral, relating to the
       use and occupancy of the Premises or the Improvements or any portion
       thereof, now or hereafter existing or entered into (collectively
       "Leases");

              (d) all rents, issues, profits, royalties, revenue, advantages,
       income, avails, claims against guarantors, all cash or security deposits,
       advance rentals, deposits or payments given and other benefits now or
       hereafter derived directly or indirectly from the Premises and
       Improvements under the Leases or otherwise (collectively "Rents"),
       subject to the right, power and authority to assign, collect and apply
       the Rents;

              (e) all right, title and interest of Mortgagor in and to all
       options to purchase or lease the Premises or the Improvements or any
       portion thereof or interest therein, or any other rights, interests or
       greater estates in the rights and properties comprising the Property now
       owned or hereafter acquired by Mortgagor;

              (f) any interests, estates or other claims of every name, kind or
       nature, both in law and in equity, which Mortgagor now has or may acquire
       in the Premises and Improvements or other rights, interests or properties
       comprising the Property now owned or hereafter acquired;

              (g) all rights of Mortgagor to any and all plans and
       specifications, designs, drawings and other matters prepared for any
       construction on the Premises or regarding the Improvements;

              (h) all rights of Mortgagor under any contracts executed by
       Mortgagor with any provider of goods or services for or in connection
       with any construction undertaken on or services performed or to be
       performed in connection with the Premises or the Improvements;

              (i) all right, title and interest of Mortgagor in and to all the
       following tangible personal property ("Personal Property") owned by
       Mortgagor and now or at any 

                                      -4-
<PAGE>

       time hereafter located in, on or at the Premises or the Improvements and
       used or useful in connection therewith:

                  (i) all building materials and equipment located upon the
              Premises and intended for construction, reconstruction,
              alteration, repair or incorporation in or to the Improvements now
              or hereafter to be constructed thereon, whether or not yet
              incorporated in such Improvements, (all of which shall be deemed
              to be included in the Property upon delivery thereto);

                  (ii) all machines, machinery, fixtures, apparatus, equipment
              or articles used in supplying heating, gas, electricity,
              air-conditioning, water, light, power, plumbing, sprinkler, waste
              removal, refrigeration, ventilation, and all fire sprinklers,
              alarm systems, protection, electronic monitoring equipment and
              devices;

                (iii)     all window, structural, maintenance and
              cleaning equipment and rigs; and

                 (iv) all fixtures now or hereafter owned by Mortgagor and
              attached to or contained in and used or useful in connection with
              the Premises or the Improvements. All such property owned by
              Mortgagor and placed by it on the Premises or used in connection
              with the operation or maintenance shall, so far as permitted by
              law, be deemed for the purposes of this Mortgage to be part of the
              real estate constituting and located on the Premises and covered
              by this Mortgage. As to any of the property that is not part of
              such real estate or does not constitute a "fixture," as such term
              is defined in the Uniform Commercial Code of the State (the
              "Code"), this Mortgage shall be deemed to be a security agreement
              under the Code for the purpose of creating hereby a security
              interest in property, which Mortgagor hereby grants to Mortgagee
              as "secured party" as defined in the Code. The enumeration of any
              specific items of Personal Property set forth herein shall in no
              way exclude or be held to exclude any items of property not
              specifically enumerated;

              (j) all the estate, interest, right, title or other claim or
       demand which Mortgagor now has or may hereafter have or acquire with
       respect to (i) proceeds of insurance in effect with respect to the
       Property and (ii) any and all awards, claims for damages, judgments,
       settlements and other compensation made for or consequent upon the taking
       by condemnation, eminent domain or any like proceeding, or by any
       proceeding or purchase in lieu thereof, of the whole or any part of the
       Property, including, without limitation, any awards and compensation
       resulting from a change of grade of streets and awards and compensation
       for severance damages (collectively "Awards").

       TO HAVE AND TO HOLD the Mortgaged Property unto the Trustee and unto his
successors or substitutes in this trust, and unto his or their respective
successors and assigns, forever, 


                                      -5-
<PAGE>

IN TRUST, and for the uses and purposes hereinafter set forth forev er, and
Mortgagor does hereby bind itself and its successors and assigns to WARRANT AND
FOREVER DEFEND the Mortgaged Property unto the Trustee and unto his respective
successors and assigns against any and every person lawfully claiming the same
or any part thereof.

       The Mortgagor hereby covenants with the Mortgagee and with the purchaser
at any foreclosure sale that at the execution and delivery hereof, Mortgagor
owns the Property and has good, indefeasible estate therein, in fee simple; that
the Property is free from all encumbrances and exceptions to title (and any
claim of any other person) other than the Permitted Liens as defined in Section
1.1 of the Credit Agreement, (said encumbrances and Permitted Liens are
hereinafter collectively referred to as "Permitted Exceptions"); that it has
good and marketable title in and to the Property and good and lawful right to
sell, mortgage and convey the Property; and that Mortgagor and its successors
and assigns shall forever warrant and defend the Property against all claims and
demands whatsoever.

       If and when Mortgagor has paid all of the Obligations, to the extent
secured hereby, as provided in Section 5.18 hereof, and there exist no
commitments of the Lender under the Loan Documents which could give rise to
Obligations, then this Mortgage and the estate, right and interest of Mortgagee
in and to the Property shall cease and shall be released by Mortgagee delivering
to Mortgagor a satisfaction of this Mortgage in proper recordable form at the
cost of Mortgagor, but until such time shall remain in full force and effect.


                                       III

                               GENERAL AGREEMENTS


       III.1 Payment of Indebtedness. Mortgagor shall pay promptly and when due
all amounts owing in respect of the Obligations in the manner provided in the
Guaranty, this Mortgage or the other Loan Documents.

       III.2 Impositions. Mortgagor shall pay immediately, when first due and
owing, all general taxes, special taxes, special assessments, water charges,
sewer charges, and any other charges, fees, taxes, claims, levies, expenses,
liens and assessments, ordinary or extraordinary, governmental or
nongovernmental, statutory or otherwise (all of the foregoing being herein
collectively referred to as "Impositions"), that may be asserted against the
Property or any part thereof or interest therein.

       Mortgagor may, in good faith and with reasonable diligence, contest the
validity or amount of any Impositions; provided, that:

                                      -6-
<PAGE>

              (a) Mortgagor shall pay all such Impositions so contested under
       protest if such payment is required to prevent such contest from having
       the effect of preventing the sale or forfeiture of the Property or any
       sub-part or interest;

              (b) Mortgagor has notified Mortgagee in writing of the intention
       of Mortgagor to prosecute the contest before any Impositions have been
       materially increased by any interest, penalties, or costs; and

              (c) Mortgagor shall diligently prosecute the contest of such
       Impositions by appropriate legal proceedings.

       III.3 Payment of Impositions by Mortgagee. Upon Mortgagor's failure to
pay the Impositions as provided above, Mortgagee is hereby author ized to make
or advance, in the place and stead of Mortgagor, any payment relating to
Impositions, unless such Imposition is then being contested by Mortgagor
pursuant to Section 3.02. Mortgagee may do so according to any bill, statement,
or estimate procured from the appropriate public office without inquiry into the
accuracy or the validity of any Impositions, lien, sale, forfeiture, or related
title or claim. Mortgagee is further authorized to make or advance, in place of
Mortgagor, unless such matter is being contested by Mortgagor in accordance with
Section 3.02 or Section 3.08(a), any payment relating to any apparent adverse
title, lien, statement of lien, encumbrance, claim, charge, or payment otherwise
relating to any other purpose herein and hereby authorized (except the Permitted
Exceptions), but not enumerated in this Section, whenever, in Mortgagee's
reasonable judgment and discretion, such advance is necessary or desirable to
protect the full security intended to be created by this Mortgage. Subject to
the limitations set forth in Section 5.18, all such advances and indebtedness
authorized by this Section shall constitute Obligations and shall be repayable
by Mortgagor upon demand with interest at the rate of interest which may be due
and owing from time to time on any loan and payable pursuant to Section 4.2(a)
of the Credit Agreement (the "Default Rate").

       III.4 Insurance and Insurance Proceeds. Mortgagor's insurance
requirements shall be as set forth in Section 11.4 of the Credit Agreement.
Mortgagor's rights to insurance proceeds shall be as set forth in Section 7.6 of
the Credit Agreement.

       III.5 Condemnation Awards. In the event of any taking of the Property or
any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of the Property or any part thereof, by any
governmental authority, civil or military (each, a "Taking"), Mortgagor shall
immediately notify Mortgagee upon receiving notice of such Taking or
commencement of proceedings therefor. All proceeds or any award or payment in
respect of any Taking are hereby assigned and shall be paid to Mortgagee and
Mortgagor shall take all steps necessary to notify the condemning authority of
such assignment. Such award or payment, less the amount of any expenses incurred
in litigating, arbitrating, compromising or settling any claim arising out of
such Taking ("Net Award"), shall be applied in accordance with the provisions of
Section 3.06 hereafter. 


                                      -7-
<PAGE>

       III.6 Restoration. Mortgagor's rights with respect to restoring the
Premises with a Net Award of Net Proceeds shall be as set forth in the Credit
Agreement.2

       III.7 Maintenance of Property. Mortgagor shall:

              (a) promptly repair, restore, replace or rebuild any portion of
       the Property which may become damaged, destroyed, altered, removed,
       severed, or demolished, whether or not proceeds of insurance are
       available or sufficient for the purpose, with replacements at least equal
       in quality and condition as previously existed, free from any security
       interest in, encumbrances on or reservation of title thereto;

              (b) keep the Property in good condition and repair, without waste,
       and free from mechanics', materialmen's or like liens or claims except
       for the
              Permitted Exceptions and as permitted under the Credit
       Agreement; and

              (c) not make any material alterations in the Property, except as
       permitted or not prohibited by the Credit Agreement.

       III.8 Prohibited Liens and Transfers.

              (a) Except as otherwise provided in the Credit Agreement, and as
       provided by operation of the laws of the State, Mortgagor shall not
       create, suffer, or permit to be created or filed against the Property any
       Mortgage lien or other lien superior or inferior to the lien created by
       this Mortgage. To the extent that any lien, privilege or other security
       device is created by operation of law, Mortgagor shall cause such
       security device to be released as soon as practicable after its creation.
       Mortgagor may contest any lien claim arising from any work performed,
       material furnished, or obligation incurred by Mortgagor upon furnishing
       Mortgagee security and indemnification reasonably satisfactory to
       Mortgagee for the final payment and discharge of the lien.

              (b) Except as otherwise provided in the Credit Agreement,
       Mortgagor may not sell, lease or convey all or any part of the Property.

       III.9 Stamp Taxes. If at any time the United States government, or any
federal, state, or municipal governmental subdivision, requires Internal Revenue
or other documentary stamps or levies any tax on this Mortgage or on the Notes,
or requires payment of any tax in the nature of or comparable to the United
States Interest Equalization Tax on the Obligations, then Mortgagor shall pay
such tax, including interest and penalties, in the required manner.

       III.10 Change in Tax Laws. In the event of the enactment, after the date
of this Mortgage, of any law of the United States of America, or any state or
political subdivision thereof, (i) deducting from the value of the Premises, for
the purpose of taxation, the amount of any lien thereon; (ii) imposing upon
Mortgagee the payment of all or any part of the taxes, assessments, charges or
liens hereby required to be paid by Mortgagor; or (iii) changing in any way the
laws 


                                      -8-
<PAGE>

relating to the taxation of mortgages or debts secured by mortgages or
Mortgagor's interest in the Property, or the manner of collection of taxes, so
as to affect this Mortgage or the Obligations; then Mortgagor, upon demand by
Mortgagee, and as required by law, shall pay such taxes, assessments, charges,
or liens or reimburse Mortgagee therefor. If, in the opinion of counsel for
Mortgagee, it would be unlawful to require 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 applicable provisions of the Credit
Agreement shall apply. Nothing contained in this Section 3.10 shall be construed
as obligating Mortgagor to pay any portion of Mortgagee's federal, state and
local income tax.

       III.11 Assignment of Leases and Rents. All right, title, and interest of
Mortgagor in and to all present Leases affecting the Property and including and
together with any and all future Leases, written or oral, upon all or any part
of the Property and together with all of the rents, income, receipts, revenues,
issues, avails and profits from or due or arising out of the Property are hereby
transferred and assigned simultaneously herewith to Mortgagee as further
security for the payment of the Obligations. All future Leases affecting the
Property shall be submitted by Mortgagor to Mortgagee for its approval prior to
execution, which approval shall not be unreasonably withheld or delayed. Each
Lease, including all future Leases shall be subordinate to this Mortgage,
provided that, upon the request of the Mortgagor and the lessee under any such
Lease, Mortgagee shall enter into a Subordination, Nondisturbance and Attornment
Agreement (or similar agreement) with such lessee in form and substance
reasonably satisfactory to Mortgagee, pursuant to which (i) Mortgagee will agree
that so long as such Lease shall be in full force and effect and such lessee is
not in default thereunder, Mortgagee will not disturb, pursuant to a foreclosure
action or otherwise, such lessee's possession under such Lease, and (ii) such
lessee shall agree that if Mortgagee or any future holder of this Mortgage shall
become the owner of the Property by reason of foreclosure of the Mortgage or
otherwise, or if the Property shall be sold as a result of any foreclosure
action or deed in lieu thereof, then such lease shall continue in full force and
effect as a direct lease between such lessee and the then owner of the Property.
Although it is the intention of the parties that the assignment contained in
this Section shall be a present and absolute assignment, it is expressly
understood and agreed, anything to the contrary notwithstanding, that Mortgagee
shall not exercise any of the rights or powers conferred upon it by this Section
until an Event of Default shall occur under this Mortgage. From time to time,
Mortgagor shall furnish Mortgagee with executed copies of each of the Leases and
shall use commercially reasonable efforts to furnish Mortgagee with estoppel
letters from each tenant under each of the Leases in a form satisfactory to
Mortgagee within thirty (30) days after Mortgagee's written demand.

       Following the occurrence of an Event of Default (a) Mortgagee shall have
the rights and powers as are provided herein, (b) this Mortgage shall constitute
a direction to each lessee under the Leases and each guarantor thereof to pay
all Rents directly to Mortgagee without proof of the Event of Default, and (c)
Mortgagee shall have the authority, as Mortgagor's attorney-in-fact (such
authority being coupled with an interest and irrevocable), to sign the name of
Mortgagor and to bind Mortgagor on all papers and documents relating to the
operation, leasing and maintenance of the Property.

                                      -9-
<PAGE>

       If Mortgagor, as lessor under any Lease, shall neglect or refuse to
perform, observe and keep all of the covenants, provisions and agreements
contained in such Lease, then Mortgagee may perform and comply with any such
Lease covenants, agreements and provisions. All costs and expenses incurred by
Mortgagee in complying with such covenants, agreements, and provisions shall
constitute Obligations and shall be payable upon demand with interest at the
Default Rate.

       Mortgagee shall not be obligated to perform or discharge any obligation,
duty or liability under any Lease, and Mortgagor shall and does hereby agree,
except to the extent of Mortgagee's gross negligence or willful misconduct, to
indemnify and hold Mortgagee harmless of and from any and all liability, loss or
damage which it may or might incur under any Lease or under or by reason of
their assignments and of and from any and all claims and demands whatsoever
which may be asserted against it by reason of all alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in such Lease. Should Mortgagee incur any such liability,
loss or damage under any Lease or under or by reason of its assignment, or in
the defense of any claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees, shall, subject to the limitations set
forth in Section 5.18 of this Mortgage, be secured hereby. Mortgagor shall
reimburse Mortgagee therefor immediately upon demand with interest payable at
the Default Rate.

       III.12 Releases. Without notice and without regard to the consideration
therefor, and to the existence at that time of any inferior liens, Mortgagee may
release from the lien created hereby all or any part of the Property, or release
from liability any person obligated to repay any Obligations, without affecting
the liability of any party to any of the Notes, this Mortgage, or any of the
other Loan Documents (including without limitation any guaranty given as
additional security) and without in any way affecting the priority of the lien
created hereby. Mortgagee may agree with any liable party to extend the time for
payment of any part or all of the Obligations. Such agreement shall not in any
way release or impair the lien created by this Mortgage or reduce or modify the
liability of any person or entity obligated personally to repay the Obligations,
but shall extend the lien created by this Mortgage as against the title of all
parties having any interest, subject to the Obligations in the Property.

       III.13 Further Assurances. Mortgagor agrees that, upon request of
Mortgagee from time to time, it will, at Mortgagor's sole cost and expense,
execute, acknowledge and deliver all such additional instruments and further
assurances of title and will do or cause to be done all such further acts and
things as may reasonably be necessary to fully effectuate the intent of this
Mortgage, including without limitation, reimbursing Mortgagee for the reasonable
costs of appraisals of the Property, to the extent that Mortgagee determines in
good faith that such appraisals are required by any law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, including, without limitation, the
provisions of Title XI of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, and any rules promulgated to implement such provisions.
In the event that Mortgagor shall fail to do any of the foregoing, Mortgagee
may, in its sole discretion, do so in the name of Mortgagor, and Mortgagor
hereby appoints Mortgagee as its attorney-in-fact to do any of the foregoing.

                                      -10-
<PAGE>

       III.14 Environmental Provisions.

       (a) For the purposes of this Section the following terms shall have the
following meanings: (i) the term "Hazardous Material" shall mean any material or
substance that, whether by its nature or use, is now or hereafter defined as a
hazardous waste, hazardous substance, pollutant or contaminant under any
Environmental Requirement, or which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and
which is or contains petroleum, gasoline, diesel fuel or another petroleum
hydrocarbon product; (ii) the "Environmental Requirements" shall collectively
mean all applicable present and future laws, statutes, ordinances, rules,
regulations, orders, codes, licenses, permits, decrees, judgments, directives of
or by any Governmental Authority and relating to or addressing the protection of
the environment or human health; and (iii) the term "Governmental Authority"
shall mean the federal government, or any state or other political subdivision
thereof, or any agency, court or body of the federal government, any state or
other political subdivision thereof, exercising executive, legislative,
judicial, regulatory or administrative functions.

       (b) Mortgagor hereby represents and warrants to Mortgagee that to the
best of Mortgagor's knowledge after commercially reasonable inquiry and except
as disclosed in writing to Mortgagee or as set forth on Schedule 10.19 to the
Credit Agreement: (i) no Hazardous Material is currently located at or has been
disposed of on, in, under or about the Property in material violation of any
Environmental Requirement; (ii) no releasing, emitting, leaching, discharging,
dumping or disposing of any Hazardous Material from the Property onto any other
property or from any other property onto or into the Property has occurred or is
occurring in material violation of any Environmental Requirement; (iii) no
notice of violation, lien, complaint, suit, order or other notice with respect
to the Property is presently outstanding under any Environmental Requirement
which, if not resolved, is reasonably likely to have a Material Adverse Effect
(as defined in the Credit Agreement); and (iv) the Property and the operation
thereof are in material compliance with all applicable Environmental
Requirements.

       (c) Mortgagor shall comply, and shall use its best efforts to cause all
tenants or other lawful occupants of the Property to comply with all applicable
and material Environmental Requirements, and will not generate, store, handle,
process, dispose of or otherwise use, and will not grant permission to any
tenant or other occupant of the Property to generate, store, handle, process,
dispose of or otherwise use, Hazardous Materials at, in, on, or about the
Property in a manner that is reasonably likely to lead or potentially lead to
the imposition on Mortgagor, Mortgagee or the Property of any material liability
or lien of any nature whatsoever, based upon the assessed value of the Property,
or lien under any Environmental Requirement which is reasonably likely to have a
Material Adverse Effect. Mortgagor shall notify Mortgagee promptly in the event
of any spill or other release of any Hazardous Material at, in, on, under or
about the Property which is required to be reported to a Governmental Authority
under any Environmental Requirement, will promptly forward to Mortgagee copies
of any notices received by Mortgagor relating to alleged violations of any
Environmental Requirement and will promptly pay when due or contest in good
faith within the applicable time periods any fine or assessment against
Mortgagee, Mortgagor or the Property relating to any Environmental Requirement.
If at any time it is it is determined that the operation or use of 


                                      -11-
<PAGE>

the Property by Mortgagor violates any applicable and material Environmental
Requirement or that there are Hazardous Materials located at, in, on, under or
about the Property in violation of any applicable Environmental Requirement or
that there are Hazardous Materials located at, in, on, under or about the
Property which, under any Environmental Requirement, require special handling in
collection, storage, treatment or disposal, or any other form of cleanup or
corrective action, Mortgagor shall, within thirty (30) days after receipt of
notice thereof from any Governmental Authority or from Mortgagee, take, at
Mortgagor's sole cost and expense, such actions as may be necessary to fully
comply in all material respects with all applicable Environmental Requirements
or contest in good faith the requirement to take such actions, provided,
however, that if such compliance cannot reasonably be completed within such
thirty (30) day period, Mortgagor shall thereafter diligently and expeditiously
proceed to fully comply with or contest in good faith in a timely fashion all
Environmental Requirements.

       (d) If Mortgagor fails to timely take or contest, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action described
in subsection (c) above, Mortgagee may, in its reasonable discretion, make
advances or payments toward the performance or satisfaction of any activities
required pursuant to any Environmental Requirement, but shall in no event be
under any obligation to do so. All sums so advanced and paid by Mortgagee
(including, without limitation, reasonable counsel and consultant fees and
expenses, investigation and laboratory fees and expenses, and fines or other
penalty payments) and all sums advanced or paid in connection with any judicial
or administrative investigation or proceeding relating thereto, will
immediately, upon demand, become due and payable from Mortgagor and shall bear
interest at the Default Rate from the date any such sums are so advanced or paid
by Mortgagee until the date any such sums are repaid by Mortgagor to Mortgagee.
Mortgagor will execute and deliver, promptly upon request, such instruments as
Mortgagee may reasonably deem necessary to permit Mortgagee to take any such
action, and such additional notes and mortgages, as Mortgagee may require to
secure all sums so advanced or paid by Mortgagee. If a lien is filed against the
Property by any Governmental Authority resulting from the need to expend or the
actual expending of monies arising from an action or omission, whether
intentional or unintentional, of Mortgagor or for which Mortgagor is
responsible, resulting in the releasing, spilling, leaking, leaching, pumping,
emitting, pouring, emptying or dumping of any Hazardous Material into the waters
or onto land located within or without the State where the Property is located,
then Mortgagor will, within thirty (30) days from the date that Mortgagor
receives notice that such lien has been placed against the Property (or within
such shorter period of time as may be specified by Mortgagee if such
Governmental Authority has commenced steps to cause the Property to be sold
pursuant to such lien), either (a) pay (or otherwise satisfy) the claim and
remove the lien; or (b) contest such lien in good faith; or (c) furnish a cash
deposit, bond, or such other security with respect thereto as is satisfactory in
all respects to Mortgagee and is sufficient to effect a complete discharge of
such lien on the Property.

       (e) Mortgagee may, at its option, at intervals of not less than one year,
or more frequently, if Mortgagee reasonably believes that a Hazardous Material
or other environmental condition violates or threatens to violate any
Environmental Requirement, cause an environmental audit of the Property or
portions thereof to be conducted to evaluate Mortgagor's compliance with the
provisions of this Section, and Mortgagor shall cooperate in all reasonable ways
with Mortgagee 



                                      -12-
<PAGE>

in connection with any such audit. If such audit discloses that a violation of
an Environmental Requirement exists or if such audit was required or prescribed
by law, regulation or governmental or quasi-governmental authority, Mortgagor
shall pay all costs and expenses incurred in connection with such audit;
otherwise, the costs and expenses of such audit shall, notwithstanding anything
to the contrary set forth in this Section, be paid by Mortgagee.

       (f) Except for: (a) any Claims (as hereinafter defined) arising as a
result of the gross negligence or wilful misconduct of Mortgagee during the term
of this Mortgage; or (b) any Claims arising as a result of any acts of Mortgagee
or its successors and assigns or the occurrence of any acts by any third parties
after Mortgagee or its successor and assigns take possession of the Property, in
the event Mortgagee takes possession of the Property after an Event of Default,
Mortgagor will defend, indemnify, and hold harmless Mortgagee, and its
employees, agents, officers, and directors, from and against any and all claims,
demands, penalties, causes of action, fines, liabilities, settlements, damages,
costs, or expenses of whatever kind or nature, known or unknown, foreseen or
unforeseen, contingent or otherwise, including, without limitation, reasonable
counsel and consultant fees and expenses, investigation and laboratory fees and
expenses, court costs, and litigation expenses (all of the foregoing
collectively for purposes of this Section the "Claims"), arising out of, or in
any way related to: (i) any breach by Mortgagor of any of the provisions of this
Section; (ii) the presence, disposal, spillage, discharge, emission, leakage,
release, or threatened release of any Hazardous Material which is at, in, on,
under, about, from or affecting the Property, including, without limitation, any
damage or injury resulting from any such Hazardous Material to or affecting the
Property or the soil, water, air, vegetation, buildings, personal property,
persons or animals located on the Property, or in any other property or
otherwise; (iii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to any such Hazardous
Material; (iv) any lawsuit brought or threatened, settlement reached, or order
or directive of or by any Governmental Authority relating to such Hazardous
Material; or (v) any violation of any Environmental Requirement or any policy or
requirement of Mortgagee hereunder. The aforesaid indemnification shall,
notwithstanding any exculpatory or other provision of any other document or
instrument now or hereafter executed and delivered in connection with the loan
evidenced by the Notes and secured by this Mortgage, constitute the personal
recourse undertakings, obligations and liabilities of Mortgagor, and shall
survive the foreclosure or satisfaction of this Mortgage and the discharge of
Mortgagor's other Obligations hereunder.


                                       IV


                         EVENT OF DEFAULT AND REMEDIES


       IV.1 Event of Default. Each of the following shall constitute an event of
default ("Event of Default") under this Mortgage:

       (a) The occurrence of an "Event of Default" as such term is defined in
the Credit Agreement (including, if applicable, the expiration of any grace
period provided therein); or

                                      -13-
<PAGE>


       (b) Failure of Mortgagor to perform or observe any other covenant,
agreement, representation, warranty or other provision contained in this
Mortgage within thirty (30) days after written notice of the default from
Mortgagee to Mortgagor.

       IV.2 Acceleration of Maturity. Following the occurrence of an Event of
Default, the Obligations shall become due and payable in accordance with the
terms of the Credit Agreement. Upon acceleration:

       (a) Mortgagee's Power of Enforcement and Application of Proceeds. On the
application of the Mortgagee it shall be lawful for and the duty of the Trustee,
and the Trustee is hereby authorized and empowered to expose to sale and to sell
the Property or any part thereof at public auction to the highest bidder for
cash, after having first complied with all applicable requirements of North
Carolina law with respect to the exercise of powers of sale contained in deeds
of trust and upon such sale, the Trustee shall collect the purchase proceeds and
convey title to the portion of the Property so sold to the purchase in fee
simple. After retaining from the proceeds of such sale a commission for said
services as hereinafter provided and all expenses incurred by the Trustee,
including reasonable attorneys' fees for legal services actually performed, the
Trustee shall apply the residue of the proceeds, first to the reimbursement of
the Beneficiary for all sums expended or incurred by the Mortgagee under this
Mortgage or to establish, preserve or enforce this Deed of Trust; second to the
payment of the Loans and interest thereon; and the balance, if any, shall be
paid to the Mortgagor or other person lawfully entitled thereto. The Mortgagee
agrees that in the event of a sale hereunder, the Mortgagee shall have the right
to bid at such sale and shall have the right to credit the indebtedness secured
hereby against the purchase price. The Trustee shall have the right to designate
the place of sale in compliance with applicable law and the sale shall be held
at the place designated by the notice of sale. The Trustee may require the
successful bidder at any sale to deposit immediately with the Trustee cash or
certified check in an amount up to twenty-five percent (25%) of the bid,
provided notice of such requirement is contained in the advertisement of the
sale. The bid may be rejected if the deposit is not immediately made. Such
deposit shall be refunded in case a resale is had because of an upset bid or if
the Trustee is unable to convey the portion of the Property so sold to the
bidder because the power of sale has been terminated in accordance with
applicable law. If the purchaser fails to comply with its bid, the deposit shall
be applied to the expenses of the sale and the residue, if any, shall be applied
to the indebtedness secured hereby. In all other cases, the deposit shall be
applied to the purchase price. Pursuant to Section 25-9-501(4) of the North
Carolina General Statutes (or any amendment thereto), the Trustee is expressly
authorized and empowered to expose to sale and sell, together with the real
estate, any portion of the Property which constitutes personal property. If
personal property is sold hereunder, it need not be at the place of sale. The
notice of sale, however, shall state the time and place where such personal
property may be inspected prior to sale. The Property may be sold in such
parcels or lots as the Trustee may determine without regard to principles of
marshalling and the Property may be sold at one sale or in multiple sales as
determined by the Trustee. The exercise of the power of sale hereunder by the
Trustee on one or more occasions shall not be deemed to extinguish the power of
sale, which power of sale shall continue in full force and effect until all the
Property shall have been finally sold and property conveyed to the purchasers at
the sales. The Trustee's commission shall be two percent (2%) of the gross
proceeds of the sale for a completed foreclosure. In the event 


                                      -14-
<PAGE>

foreclosure is commenced, but not completed, the Mortgagor shall pay all
expenses incurred by the Trustee and a partial commission based upon the
services in fact rendered by the Trustee at its standard hourly rate.

       (b) Mortgagee's Other Rights. Mortgagee shall have the right to take such
other steps to protect and enforce its rights, whether by action, suit or
proceeding at law or in equity for the specific performance of any covenant,
condition or agreement contained in this Mortgage, or in aid of the execution of
any power granted in this Mortgage, or for any foreclosure hereunder, or for the
enforcement of any other appropriate legal or equitable remedy or otherwise as
Mortgagee and/or the Trustees shall elect.

       IV.3 Intentionally Deleted.

       IV.4 Cumulative Remedies; Delay or Omission Not a Waiver. Each remedy or
right of Mortgagee shall not be exclusive of, but shall be in addition to, every
other remedy or right now or hereafter existing at law or in equity. No delay in
the exercise or omission to exercise any remedy or right accruing on the
occurrence or existence of any Event of Default under the Credit Agreement shall
impair any such remedy or right or be construed to be a waiver of any such Event
of Default or acquiescence therein, nor shall it affect any subsequent Event of
Default of the same or different nature. Every such remedy or right may be
exercised concurrently or independently and when and as often as may be deemed
expedient by Mortgagee.

       IV.5 Mortgagee's Remedies Against Multiple Parcels. The Obligations
hereby secured are also secured by other properties, lots or parcels covered by
other mortgages or deeds of trust ("Other Mortgages") within and/or outside the
State. If this Mortgage or any of the Other Mortgages is foreclosed upon, or if
judgment is entered upon any Obligations secured hereby, or if Mortgagee
exercises its power of sale, execution may be made upon or Mortgagee may
exercise its power of sale against any one or more of the properties, lots or
parcels and not upon the others, or upon all of such properties or parcels,
either together or separately, and at different times or at the same time, and
execution sales or sales under the power of sale herein granted may likewise be
conducted separately or concurrently, in each case at the election of Mortgagee.
No event of enforcement taking place in any state other than the State shall
(and no failure to prosecute any such other enforcement) in any way stay,
preclude or bar enforcement of this Mortgage and Mortgagee may pursue any or all
of Mortgagee's rights and remedies under this Mortgage to the maximum extent
permitted by State law until the Obligations are paid and discharged in full.

       IV.6 No Merger. In the event of a foreclosure of this Mortgage, the
Obligations then due Mortgagee shall not be merged into any decree of
foreclosure entered by the court, and Mortgagee may concurrently or subsequently
seek to foreclose one or more mortgages or deeds of trust which also secure said
Obligations.

       IV.7 Insurance Upon Foreclosure. In case of an insured loss after
foreclosure proceedings have been instituted, the proceeds of any insurance
policy or policies, if not applied in Restoring the Property shall be used to
pay the amount due in accordance with any decree of

                                      -15-
<PAGE>

foreclosure that may be entered in any such proceedings, and the balance, if
any, shall be paid as the court may direct. In case of the foreclosure of this
Mortgage, the court in its judgment may provide that the judgment creditor may
cause a new or additional loss clause to be attached to each of said policies
making the loss thereunder payable to said judgment creditor; and any such
foreclosure judgment may further provide, unless the right of redemption has
been waived, that in case of redemption under said judgment, pursuant to
applicable law, then, and in every such case, the redemptory may cause the
preceding loss clause attached to each insurance policy to be cancelled and a
new loss clause to be attached thereto, making the loss thereunder payable to
such redemptory. In the event of foreclosure sale, Mortgagee is hereby
authorized, but not required, without the consent of Mortgagor, to assign or
cause a receiver to assign any and all insurance policies to the purchaser at
the sale, or to take such other action as Mortgagee may deem advisable, to cause
the interest of such purchaser to be protected by any of the said insurance
policies.

       IV.8 Waiver of Statutory Rights. Mortgagor shall not apply for or avail
itself of any appraisement, valuation, redemption, 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, and
Mortgagor hereby waives the benefit of such laws (to the extent permitted by
applicable law). Mortgagor, for itself and all who may claim through or under
it, waives any and all rights to have the Property and estates comprising the
Property marshalled upon any foreclosure of the lien of this Mortgage, and
agrees that any court having jurisdiction to foreclose such lien may order the
Property sold in its entirety. Mortgagor further waives any and all rights of
redemption from foreclosure and from sale under any order or decree of
foreclosure of the lien created by this Mortgage, for itself and on behalf of:
(i) any trust estate of which the Premises are a part, all beneficially
interested persons; (ii) each and every person acquiring any interest in the
Property or title to the Premises subsequent to the date of this Mortgage; and
(iii) all other persons to the extent permitted by the provisions of laws of the
State in which the Premises are located.


                                        V

                                 MISCELLANEOUS


       V.1 Notices. Any notice that Mortgagee or Mortgagor may desire or be
required to give to the other shall be in writing and shall be mailed or
delivered in the manner set forth in the Credit Agreement.

       V.2 Time of Essence. Time is of the essence of this Mortgage.

       V.3 Covenants Run with Land. All of the covenants of this Mortgage shall
run with the land constituting the Premises.

       V.4 GOVERNING LAW. THIS MORTGAGE SHALL BE CONSTRUED AND ENFORCED
ACCORDING TO THE LAWS OF THE STATE OF ILLINOIS



                                      -16-
<PAGE>

(WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS THEREOF) PROVIDED, HOWEVER,
THAT MATTERS OF CREATION, PERFECTION, PRIORITY OR ENFORCEABILITY OF ANY AND ALL
RIGHTS AND REMEDIES PROVIDED FOR HEREIN SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NORTH CAROLINA. TO THE EXTENT THAT THIS MORTGAGE MAY OPERATE AS A
SECURITY AGREEMENT UNDER THE CODE, MORTGAGEE SHALL HAVE ALL RIGHTS AND REMEDIES
CONFERRED THEREIN FOR THE BENEFIT OF A SECURED PARTY AS SUCH TERM IS DEFINED IN
THE CODE.

       V.5 Rights and Remedies Cumulative. All rights and remedies in this
Mortgage are cumulative. The holder of the Guaranty and of every other
obligation secured hereby may recover judgment, issue execution therefor, and
resort to every other right or remedy available at law or in equity, without
first exhausting and without affecting or impairing the security of any right or
remedy.

       V.6 Severability. If any provision of this Mortgage, or any paragraph,
sentence, clause, phrase, or word, or their application, in any circumstance, is
held invalid, the validity of the remainder of this Mortgage shall be construed
as if such invalid part were never included.

       V.7 Non-Waiver. Unless expressly provided in this Mortgage to the
contrary, no consent or waiver, express or implied, by any party, to or of any
breach or default by any other party shall be deemed a consent to or waiver of
the performance by such defaulting party of any other obligations or the
performance by any other party of the same, or of any other, obligations.

       V.8 Headings. The headings of sections and paragraphs in this Mortgage
are for convenience or reference only and shall not be construed in any way to
limit or define the content, scope, or intent of the provisions.

       V.9 Grammar. As used in this Mortgage, the singular shall include the
plural, and masculine, feminine, and neuter pronouns shall be fully
interchangeable, where the context so requires.

       V.10 Deed in Trust. If title to the Property or any part thereof is now
or hereafter becomes vested in a trustee, any prohibition or restriction against
the creation of any lien on the Property shall be construed as a similar
prohibition or restriction against the creation of any lien on or security
interest in the beneficial interest of such trust.

       V.11 Successors and Assigns. This Mortgage shall be binding upon
Mortgagor, its successors, assigns, legal representatives, and all other persons
or entities claiming under or through Mortgagor. The word "Mortgagee", when used
herein, shall include First Source Financial, LLP, in its capacity as
Administrative Agent and as Agent for the Lenders together with its successors,
assigns and legal representatives. "Mortgagor", when used herein, shall include
all such persons and entities and any others liable for the payment of the
Secured Indebtedness, or any part thereof, whether or not they have executed the
notes or this Mortgage.


                                      -17-
<PAGE>

       V.12 Mortgagee in Possession. Nothing contained in this Mortgage shall be
construed as constituting Mortgagee a mortgagee in possession in the absence of
the actual taking of possession of the Property.

       V.13 Compliance with Applicable Law. Anything elsewhere herein contained
to the contrary notwithstanding,

              (a) in the event that any provision in this Mortgage shall be
       inconsistent with any provision of applicable law, the provisions of
       applicable law 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 applicable law; and

              (b) 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 applicable
       law in the absence of said provision, Mortgagee shall be vested with the
       rights granted under applicable law to the full extent permitted by law.

       V.14 Incorporation of Credit Agreement. The terms of the Credit Agreement
are incorporated by reference herein as though set forth in full detail. In the
event of any conflict between the terms and provisions of this Mortgage and any
other Loan Document, the terms and provisions of such other Loan Document shall
control.

       V.15 Security Agreement. This Mortgage is hereby deemed to be as well a
Security Agreement for the purpose of creating hereby a security interest
securing the indebtedness secured hereby in and to the Personal Property.
Without derogating any of the provisions of this Mortgage, Mortgagor by this
Mortgage:

              (a) grants to Mortgagee a security interest in all of Mortgagor's
       right, title and interest in and to all Personal Property, including, but
       not limited to, the items referred to above, together with all additions,
       accessions and substitutions and all similar property hereafter acquired
       and used or obtained for use on, or in connection with the Property. The
       Personal Property and all proceeds thereof are intended to be secured
       hereby; however, such intent shall never constitute an express or implied
       consent on the part of Mortgagee to the sale of any or all Personal
       Property;

              (b) agrees that, subject to the limitations contained in Section
       5.18 of this Mortgage, the security interest hereby granted by this
       Mortgage shall secure the payment of the Obligations;

              (c) agrees not to sell, convey, Mortgage or grant a security
       interest in, or otherwise dispose of or encumber, any of the Personal
       Property or any of the Mortgagee's 


                                      -18-
<PAGE>

       right, title or interest therein except as permitted by the Credit
       Agreement without first securing Mortgagee's written consent;

              (d) agrees that upon or after the occurrence of any Event of
       Default under this Mortgage, Mortgagee shall have all rights and remedies
       granted by law and more particularly the Code, including, but not limited
       to, the right to take possession of the Personal Property, and for this
       purpose may enter upon any premises on which any or all of the Personal
       Property is situated without being deemed guilty of trespass and without
       liability for damages thereby occasioned (except for damages caused by
       Mortgagee's gross negligence or wilful misconduct), and take possession
       of and operate said Personal Property or remove it therefrom. Mortgagee
       shall have the further right to take any action it deems necessary,
       appropriate or desirable, at its option and in its discretion, to repair,
       refurbish or otherwise prepare the Personal Property for sale, lease or
       other use or disposition, and to sell at public or private sales or
       otherwise dispose of, lease or utilize the Personal Property and any part
       thereof in any manner authorized or permitted by law and to apply the
       proceeds thereof, subject to the limitations set forth in Section 5.18 of
       this Mortgage, toward payment of any costs and expenses, to the extent
       permitted by law, thereby incurred by Mortgagee and, subject to the
       limitations set forth in Section 5.18 of this Mortgage, toward payment of
       the Obligations and all other indebtedness described in this Mortgage, in
       such order and manner as is provided in Section 4.03 hereof. To the
       extent permitted by law, and only to the extent Mortgagor has waived any
       of the following under that certain Subsidiary Security Agreement of even
       date herewith by and between Mortgagor and Mortgagee, Mortgagor expressly
       waives any notice of sale or other disposition of the Personal Property
       and any other rights or remedies of a debtor or formalities prescribed by
       law relative to a sale or disposition of the Personal Property or to
       exercise any other right or remedy existing after default hereunder; and
       to the extent any notice is required and cannot be waived, Mortgagor
       agrees that if such notice is deposited for mailing, postage prepaid,
       certified mail or registered mail, return receipt requested, to Mortgagor
       at the address designated in the first page of this Mortgage at least
       fifteen (15) days before the time of sale or disposition, such notice
       shall be deemed reasonable and shall fully satisfy any requirements for
       giving of said notice; provided that if Mortgagor has furnished Mortgagee
       with notice of a change of address in accordance with Section 5.01, then
       any such notice shall not be reasonable unless sent to the new address;

              (e) agrees, to the extent permitted by law and without limiting
       any rights and privileges herein granted to Mortgagee, that Mortgagee may
       dispose of any or all of the Personal Property at the same time and place
       upon giving the same notice provided for in this Mortgage, and in the
       same manner as the non-judicial foreclosure sale provided under the terms
       and conditions of this Mortgage; and

              (f) authorizes Mortgagee to file, in the jurisdiction where this
       Mortgage will be given effect, financing statements including renewal or
       confirmation thereof, covering the Personal Property; and at the request
       of Mortgagee, Mortgagor will join 


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<PAGE>

       Mortgagee in executing one or more such financing statement including
       renewal or confirmation thereof, pursuant to the Code in a form
       reasonably satisfactory to Mortgagee, and will pay the cost of filing the
       same in all public offices at any time and from time to time wherever
       Mortgagee deems filing or recording of any financing statements including
       renewal or confirmation thereof or of this instrument to be desirable or
       necessary.

       V.16 Additional Provisions. The following provisions shall also
constitute an integral part of this Mortgage. Furthermore, in the event that any
prior provisions of this Mortgage conflict with the following provisions of this
Section, the provisions of this Section shall control and shall be deemed a
modification of or amendment to the section or provision at issue:

              (a) Payment of Taxes and Fees. Mortgagor agrees to pay all
       transfer taxes, recordation taxes, recording fees, and any other fees
       required by or imposed by the State or the county in which the Property
       is located in order to record this Mortgage in the Land Records of
       Montgomery County.

              (b) No Assumption of Obligations. In the event of a foreclosure of
       the Property, Mortgagee shall not assume any liability of Mortgagor for
       Mortgagor's violation of any environmental laws, statutes, codes,
       regulations, or practices and Mortgagor's indemnifications as contained
       herein and in the Credit Agreement shall survive said foreclosure.

              (c) Expenses of Enforcement; Waiver. Mortgagor agrees to bear and
       pay all reasonable expenses (including reasonable attorney fees and
       appellate attorney fees), of or incidental to the enforcement of any
       provision hereof, or the enforcement, compromise, or settlement of this
       Mortgage or the Obligations, and for the curing thereof, or for defending
       or asserting the rights and claims of Mortgagee in respect thereof, by
       litigation or otherwise. All rights and remedies of Mortgagee shall be
       cumulative and may be exercised singly or concurrently. Notwithstanding
       anything herein contained to the contrary, Mortgagor to the extent
       permitted by applicable law: (i) hereby waives trial by jury; (ii) will
       not (a) at any time insist upon, or plead, or in any manner whatever
       claim or take any benefit or advantage of any stay or execution or
       moratorium law, any exemption for execution of sale of the Property or
       any part thereof, wherever enacted, now or at any time hereafter
       enforced, which may affect the covenants and terms of performance of this
       Mortgage, nor (b) claim, take or insist upon any benefit or advantage of
       any law now or hereafter enforced providing for the evaluation or
       appraisal of the Property, or any part thereof, prior to any sale or
       sales thereof which may be made pursuant to any provision herein, or
       pursuant to the decree, judgment or order of any court of competent
       jurisdiction, nor (c) after any such sale or sales, claim, or exercise
       any right under any statute heretofore or hereafter enacted to redeem the
       property so sold or any part thereof; (iii) hereby expressly waives all
       benefit or advantage of any such law or laws including but not limited to
       a waiver of the equity of redemption, statutory right of redemption, and
       any other statutory or common law right of redemption, homestead, dower,
       marital share and all other exemptions; and (iv) covenants not to hinder,
       delay or 


                                      -20-
<PAGE>

       impede the execution of any power herein granted or delegated to
       Mortgagee, but to suffer and permit the execution of every power as
       though no such laws or laws had been made or enacted. Mortgagor, for
       itself and all who may claim under it, waives, to the extent that it
       lawfully may, all right to have the Property marshalled upon any
       foreclosure hereof.

       V.17 Future Disbursements. This Deed of Trust secures all present and
future indebtedness owing by the Mortgagor under the Credit Agreement pursuant
to N.C.G.S.s.s.45-68. The amount of the present disbursement secured hereby is
$25,000,000 and the maximum principal amount which may be secured hereby at any
one time is $42,000,000. The time period within which such future disbursements
are to be made is the period between the date hereof and the date fifteen (15)
years from the date hereof.

       V.18 Reduction of Secured Amount. The Secured Amount shall be reduced
only by the last and final sums that the Mortgagor repays with respect to the
Obligations and shall not be reduced by any intervening repayments of any of the
Obligations by the Mortgagor. As of the date hereof, the total amount of the
Obligations exceeds the Secured Amount, so that the Secured Amount represents
only a portion of the Obligations actually outstanding and due Mortgagee.

       V.19 Application of Payments and Repayments. So long as the balance of
the Obligations exceeds the Secured Amount, any payments and repayments of the
Obligations by Mortgagor shall not be deemed to be applied against, or to
reduce, the portion of the Obligations secured by this Mortgage. Such payments
shall instead be deemed to reduce only such portions of the Obligations as are
secured by mortgages encumbering real property located outside the State of
North Carolina, which mortgages secure the entire Obligations (except to the
extent, if any, that specific mortgages in such states contain specific
limitations on the amount secured).

       V.20 Removal of Trustee. The Mortgagee shall at any time have the
irrevocable right to remove the Trustee herein named without notice or cause and
to appoint his successor by an instrument in writing, duly acknowledged, in such
form as to entitle such written instrument to record in this State, and in the
event of the death or resignation of the Trustee herein named, the Mortgagee
shall have the right to appoint his successor by such written instrument. Any
Trustee so appointed shall be vested with the title to the Mortgaged Premises,
and shall possess all the powers, duties and obligations herein conferred on the
Trustee in the same manner and to the same extent as though such appointed
trustee were named herein as Trustee.

                       [Signature and Notary Page Follows]


                                      -21-
<PAGE>

       IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed by its Vice President and his signature attested by its Assistant
                --------------                                   ----------
Secretary and its corporate seal to be affixed hereto, as of the date first set
---------
out above.

ATTEST:                       STANDARD PACKAGING AND PRINTING CORP., INC.,
                                   a North Carolina corporation

/s/ Alan M. Rauss                  By /s/   John W. Lloyd
Title: Assistant Secretary          Title: Vice President
PRINTED NAME:                       PRINTED NAME:
             -------------------                  ----------------------------

CORPORATE SEAL

                                      -22-