<PAGE>
 
                                                                   EXHIBIT 10.45

                        MORTGAGE AND SECURITY AGREEMENT
                        -------------------------------

     This MORTGAGE AND SECURITY AGREEMENT dated as of the 9th day of August,
1996, is from WRIGHT MACHINE CORPORATION, a Delaware corporation, having a
mailing address at 69 Armory Street, Worcester, Massachusetts ("MORTGAGOR"), to
AFFILIATED BUSINESS CREDIT CORPORATION, a Connecticut corporation having an
office at 72 Queen Street, Southington, Connecticut 06489 (hereinafter referred
to as "MORTGAGEE").

     WHEREAS Mortgagor is justly indebted to Mortgagee for the payment and
performance of the Obligations as defined below;

     (S)1.  GRANTING CLAUSE

     NOW THIS INDENTURE WITNESSETH, that Mortgagor, in consideration of the
Obligations, and to secure the payment to Mortgagee of the principal with
interest, and all other sums provided for in the Obligations, and in this
Mortgage, according to their respective terms and conditions, and for
performance of the agreements, conditions, covenants, provisions and
stipulations contained herein and therein, and in certain other agreements and
instruments made and given or to be given by Mortgagor to Mortgagee in
connection therewith, including, without limitation, financing statements and
any assignment of rents and leases, does hereby grant, bargain, sell convey,
warrant, assign, transfer, mortgage, pledge and set over unto Mortgagee and its
successors and assigns with MORTGAGE COVENANTS all of the property described in
Schedule A attached hereto and incorporated herein by reference as if fully set
----------                                                                     
out herein (the "PROPERTY").

     (S)2.  CERTAIN COVENANTS AND CONDITIONS

     The Mortgagor covenants and agrees as follows.

          (S)2.1.  GOVERNMENTAL CHARGES.
                   -------------------- 

          Mortgagor shall pay before the same become delinquent all taxes,
     charges, sewer use fees, water rates and assessments of every name and
     nature, whether or not assessed against Mortgagor, if applicable or related
     to the Property, or any interest therein, or applicable or related to any
     of the Obligations, which, if unpaid, shall by law become a lien or charge
     upon all or any part of the Property; provided, however, that, so long as
     no distraint, foreclosure sale or other levy upon or transfer with respect
     to the Property or any part thereof shall have been effected or threatened,
     and no Event of Default shall have occurred and be continuing, Mortgagor
     shall not be required to pay any such taxes, charges, fees, rates and
     assessments by reason of this (S)2.1 if (a) the amount, applicability or 
     validity thereof is currently being
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                                      -2-



     contested by Mortgagor in good faith by appropriate legal proceedings, (b)
     Mortgagor shall have set aside on its books reserves (segregated to the
     extent required by sound accounting principles and practices) reasonably
     deemed by Mortgagee to be adequate with respect hereto and (c) Mortgagor
     shall have provided to the Mortgagee a bond or other security of such
     nature and in such amount as Mortgagee deems sufficient as security for
     payment thereof.
     
          (S)2.2.  HAZARD AND OTHER INSURANCE.
                   -------------------------- 

          

          (a) Mortgagor, at its expense, shall procure and maintain for the
          benefit of Mortgagor and Mortgagee, insurance policies issued by such
          insurance companies, in such amounts, in such form and substance, and
          with such coverages, endorsements, deductibles, and expiration dates
          as are acceptable to Mortgagee, providing the following types of
          insurance covering the Property.

               

               (i) "All Risks" property insurance (including broad form flood
               (if required), broad form earthquake (if required) and
               comprehensive boiler and machinery coverages) on the Improvements
               and the Mortgagor's contents therein in an amount not less than
               one hundred percent (100%) of the full replacement cost of the
               Improvements and the Mortgagor's contents therein determined
               annually by an insurer or qualified appraiser selected and paid
               for by Mortgagor and acceptable to Mortgagee, with deductibles
               not to exceed $5,000 for any one occurrence, with a replacement
               cost coverage endorsement, an agreed amount endorsement, and, if
               requested by Mortgagee, a contingent liability from operation of
               building laws endorsement, a demolition cost endorsement and an
               increased cost of construction endorsement in such amounts as
               Mortgagee may require. Full replacement cost as used herein means
               the cost of replacing the Improvements (exclusive of the cost of
               excavations, foundations and footings below the lowest basement
               floor) and the Mortgagor's contents therein without deduction for
               physical depreciation thereof.
                              

               (ii) During the course of construction or repair of any
               Improvements on the Property, the insurance required by clause
               (i) above shall be written on a builders risk, completed value,
               non-reporting form, meeting all of the terms required by clause
               (i) above, covering the total value of work performed, materials,
               equipment, machinery and supplies
               
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                                      -3-



               furnished, existing structures, and temporary structures being
               erected on or near the Premises, including coverage against
               collapse and damage during transit or while being stored off-
               site, and containing a soft costs (including loss of rents)
               coverage endorsement and a permission to occupy endorsement.
                              

               (iii) Flood insurance if at any time the improvements are located
               in any federally designated "special hazard area" (including any
               area having special flood, mudslide and/or flood-related erosion
               hazards, and shown on a Flood Hazard Boundary Map or a Flood
               Insurance Rate Map published by the Federal Emergency Management
               Agency as Zone A, AO, A1-30, AE, A99, AH, VO, V1-30, VE, V, M or
               E) and the broad form flood coverage required by clause (i) above
               is not available, in an amount equal to the full replacement cost
               or the maximum amount then available under the National Flood
               Insurance Program.
                              

               (iv) Commercial general liability insurance against claims for
               personal injury (to include, without limitation, bodily injury
               and personal injury) and property damage liability, all on an
               occurrence basis, if available, with such coverages as Mortgagee
               may reasonably request (including, without limitation,
               contractual liability coverage, completed operations coverage for
               a period of two (2) years following completion of construction of
               any improvements on the Property, and coverages equivalent to an
               ISO broad form endorsement), with a general aggregate limit of
               not less than $1,000,000, a completed operations aggregate limit
               of not less than $1,000,000, and a combined single "per
               occurrence" limit of not less than $1,000,000 for bodily injury,
               property damage and medical payments.
                              

               (v) During the course of construction or repair of any
               improvements on the Property, owner's contingent or protective
               liability insurance covering claims not covered by or under the
               terms or provisions of the insurance required by clause (v)
               above.
                              

               (vi) Employers liability insurance.

               

               (vii) Worker's compensation insurance for all employees of
               Mortgagor engaged on or with respect to the Property.
               
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                                      -4-

               (viii) Such other insurance in such form and in such amounts as
               may from time to time be reasonably required by Mortgagee against
               other insurable hazards and casualties which at the time are
               commonly insured against in the case of properties of similar
               character and location to the Property.

               Mortgagor shall pay all premiums on insurance policies.  The
          insurance policies provided for in clauses (v), (vi) and (viii) above
          shall name Mortgagee as an additional insured and shall contain a
          cross liability/severability endorsement.  The insurance policies
          provided for in clauses (i), (ii), (iii) and (iv) above shall name
          Mortgagee as mortgagee and loss payee, shall be first payable in case
          of loss to Mortgagee, and shall contain mortgage clauses and lender's
          loss payable endorsements in form and substance acceptable to
          Mortgagee. Mortgagor shall deliver duplicate originals or certified
          copies of all such policies to Mortgagee, and Mortgagor shall promptly
          furnish to Mortgagee all renewal notices and all receipts of paid
          premiums.  At least thirty (30) days prior to the expiration date of
          the policies, Mortgagor shall deliver to Mortgagee evidence reasonable
          satisfactory to Mortgagee that all such policies have been renewed,
          duplicate originals or certified copies of renewal policies in form
          satisfactory to Mortgagee.

          

               (b) All policies of insurance required by this Mortgage shall
          contain clauses or endorsements to the effect that (i) no act or
          omission of either Mortgagor or anyone acting for Mortgagor
          (including, without limitation, any representations made by Mortgagor
          in the procurement of such insurance), which might otherwise result in
          a forfeiture of such insurance or any part thereof, no occupancy or
          use of the Property of purposes more hazardous than permitted by the
          terms of the policy, and no foreclosure or any other change in title
          to the Property or any part thereof, shall affect the validity or
          enforceability of such insurance insofar as Mortgagee is concerned,
          (ii) the insurer waives any right of setoff, counterclaim,
          subrogation, or any deduction in respect of any liability of Mortgagor
          and Mortgagee, (iii) such insurance is primary and without right of
          contribution from any other insurance which may be available, (iv)
          such policies shall not be modified, cancelled or terminated without
          the insurer thereunder giving at least thirty (30) days prior written
          notice to Mortgagee by certified or registered mail, and (v) Mortgagee
          shall not be liable for any premiums thereon or subject to any
          assessments thereunder, and shall in all events be in amounts
          sufficient to avoid any coinsurance liability; provided, however, that
          Mortgagor shall not be liable for
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                                      -5-




          any failure of the insurance company (ies) to do anything required by
          it under such policy.
          
          (c) The insurance required by this Mortgage may be effected through a
          blanket policy or policies covering additional locations and property
          of Mortgagor not included in the Property, provided that such blanket
          policy or policies comply with all of the terms and provisions of this
          (S)2.2 and contain endorsements or clauses assuring that any claim
          recovery will not be less than that which a separate policy would
          provide, including, without limitation, a priority claim endorsement
          in the case of property insurance and an aggregate limits of insurance
          per location endorsement in the case of liability insurance.

          

          (d) All policies of insurance required by this Mortgage shall be
          issued by companies licensed to do business in the State where the
          policy is issued and also in the Commonwealth of Massachusetts and
          having a rating in Best's Key Rating Guide of at least "A" and a
          financial size category of at least "VIII".

          

          (e) Mortgagor shall not carry separate insurance, concurrent in kind
          or form or contributing in the event of loss, with any insurance
          required under this Mortgage unless such insurance complies with the
          terms and provisions of this (S)2.2.

          

          (f) In the event of any loss or damage to the Property, Mortgagor
          shall give immediate written notice to the insurance carrier and
          Mortgagee.  Mortgagor hereby irrevocably authorizes and empowers
          Mortgagee, at Mortgagee's option and in Mortgagee's sole discretion,
          as attorney in fact for Mortgagor, to make proof of such loss, to
          adjust and compromise any claim under insurance policies, to appear in
          and prosecute any action arising from such insurance policies, to
          collect and receive insurance proceeds, and to deduct therefrom
          Mortgagee's expenses incurred in the collection of such proceeds,
          provided, however, that so long as Mortgagee has not made demand for
          payment of any of the Obligations and no Event of Default has occurred
          and shall be continuing, Mortgagor shall be entitled to utilize any
          insurance proceeds to repair, replace or rebuild any of the Property.
          If the Property is sold or the Property is acquired by Mortgagee, all
          right, title and interest of Mortgagor in and to any insurance
          policies and unearned premiums thereon and in and to the proceeds
          thereof resulting from loss or damage to the Property prior to the
          sale or acquisition shall pass to Mortgagee 
<PAGE>
 
                                      -6-


          or any other successor in interest to Mortgagor or purchaser or
          grantor of the Property.
          
          (S)2.3.  CASUALTIES AND TAKING. 
                   --------------------- 

           All proceeds of any property or casualty insurance or awards of
     damages on account of any taking or condemnation for public use of or
     injury to the Property shall be paid to the Mortgagee. In the case of a
     casualty loss, or taking, the Mortgagee may, in its sole discretion, apply
     such proceeds to or toward the Obligations or release to Mortgagor such
     portion of the proceeds paid to it as Mortgagee shall in its sole
     discretion determine to be necessary and appropriate for the repair or
     restoration of that part of the Property so damaged by such casualty loss
     or remaining after such taking, such proceeds to be advanced in accordance
     with and subject to the requirements of Mortgagee's usual procedures for
     funding construction advances and to be applied to the cost of repairing
     and restoring the Property or the remaining portion thereof, with any
     balance remaining to be applied to or toward the Obligations, provided,
     however, that, so long as Mortgagee has not made demand for payment of any
     of the Obligations and no Event of Default has occurred, the Mortgagee
     shall release to Mortgagor any such proceeds to be applied by Mortgagor in
     accordance with the terms hereof.

          (S)2.4.  LEASES; ASSIGNMENTS; SUBORDINATION.
                   ---------------------------------- 

           Except to the extent expressly permitted pursuant to the Loan
     Agreement, Mortgagor shall not lease the Property or any part thereof
     without the prior written consent of the Mortgagee.  If Mortgagee shall
     consent and Mortgagor shall enter into a lease, Mortgagor shall faithfully
     keep, observe and satisfy all the obligations on the part of the lessor to
     be kept, performed and satisfied under every lease from time to time in
     force with reference to the Property, and shall not alter or terminate any
     such lease, or any guarantee of such lease, or accept any rentals for more
     than one month in advance.  As part of the consideration for the
     Obligations, Mortgagor has absolutely and unconditionally assigned and
     transferred to Mortgagee all of Mortgagor's right, title and interest in
     and to the leases of the Property and the rents and profits therefrom,
     provided, that Mortgagor shall be entitled to retain such rents and profits
     --------                                                                   
     as trustee for the benefit of Mortgagee until an Event of Default shall
     have occurred.  Mortgagee shall have no obligations or liabilities to
     tenants under any such leases unless and until the Mortgagee takes actual
     possession of the Property after the occurrence and during the continuance
     of an Event of Default, in which case the obligations of the Mortgagee will
     be limited to those arising after the Mortgagee takes possession of the
     Property.  Until Mortgagee has taken possession or has given Mortgagor
     notice of termination of any such rights the Mortgagor may exercise all
     rights of landlord under such leases 
<PAGE>
 
                                      -7-

     except as expressly limited hereunder or under the other Security
     Documents. At any time on notice from the Mortgagee, Mortgagor shall submit
     to the Mortgagee for examination all such leases. The Mortgagee shall have
     the right, by the execution of suitable written instruments from time to
     time, to subordinate this Mortgage, and the rights of the Mortgagee
     hereunder, to any lease or leases from time to time in force with reference
     to the Property, and, on the execution of any such instrument, this
     Mortgage shall be subordinate to the lease for which such subordination is
     applicable with the same force and effect as if such lease had been
     executed and delivered, and a notice thereof recorded to the extent
     required to give notice to third persons, prior to the execution, delivery
     and recording of this Mortgage.
     
          (S)2.5.  ENCUMBRANCES.
                   ------------ 

           Mortgagor shall not create or permit to be created or permit to exist
     any encumbrance on the Property (other than any lien for property taxes not
     yet due and payable and the Permitted Encumbrances) even if such
     encumbrance is inferior to this Mortgage, without the prior express written
     consent of Mortgagee.

          (S)2.6.  TRANSFERS OF OWNERSHIP.
                   ---------------------- 

           Mortgagor shall not sell or permit any transfer of any interest in
     the Property, or any part thereof, without the prior express written
     consent of Mortgagee.

          (S)2.7.  EXPENSES.
                   -------- 

           Mortgagor shall pay when due all fees and charges (including
     reasonable attorneys' fees) incurred by the Mortgagee incident to the
     transactions evidenced by the Obligations and secured by this Mortgage, the
     assurance of the security represented by this Mortgage, and incident to the
     enforcement of the Obligations and this Mortgage, including without
     limitation, all filing, registration, recording, search, appraisal and
     information fees, all title insurance premiums, all transfer taxes and
     expenses incident to the execution and acknowledgment of this Mortgage and
     all other documents securing the Obligations, and all federal, state,
     county, municipal and other taxes, duties, stamps, imposts, assessments and
     charges arising out of or in connection with the execution and delivery of
     this Mortgage and the instruments evidencing the Obligations.  Such fees
     and charges shall be secured by the lien of this Mortgage and shall accrue
     interest at the rates set forth in the Notes.

          (S)2.8.  PRIORITY OF LIEN; AFTER-ACQUIRED PROPERTY.
                   ------------------------------------------

           This Mortgage is and will be maintained as a valid mortgage lien on
     the Property subject only to the Permitted Encumbrances.  All property of
     every kind acquired by the Mortgagor after the date hereof which, by the
     terms hereof, is required or intended to be subjected to the lien of this
     Mortgage shall, immediately upon the acquisition thereof by the 
<PAGE>
 
                                      -8-

     Mortgagor, and without any further mortgage, conveyance, assignment or
     transfer, become subject to the lien of this Mortgage. The Mortgagor will
     do, execute, acknowledge and deliver all and every such further
     conveyances, mortgages, and assurances as the Mortgagee shall reasonably
     require for accomplishing the purposes of this Mortgage. If any action or
     proceeding shall be instituted to recover possession of the Property or for
     the foreclosure of any other mortgage or for any other purpose affecting
     the Property or this Mortgage, the Mortgagor will immediately, upon service
     thereof on or by the Mortgagor, deliver to the Mortgagee a true copy of
     each precept, petition, summons, complaint, notice of motion, order to show
     cause, and all other process, pleadings and papers, however designated,
     served in any such action or proceeding.
     
          (S)2.9.  WAIVER AND MODIFICATION.
                   ----------------------- 

           Whether or not for additional interest or other consideration paid or
     payable to the Mortgagee, no forbearance on the part of the Mortgagee or
     extension of the time for the payment of the whole or any part of the
     Obligations secured hereby, whether oral or in writing, or any other
     indulgence given by the Mortgagee to Mortgagor or to any other party
     claiming any interest in or to the Property, shall operate to release or in
     any manner affect the original liability of Mortgagor, or the priority of
     this Mortgage or to limit, prejudice or impair any right of the Mortgagee,
     including, without limitation, the right to realize upon the security, or
     any part thereof, for the Obligations secured hereby or any of them, notice
     of any such extension, forbearance or indulgence being hereby waived by
     Mortgagor and all those claiming by, through or under Mortgagor.  No
     consent or waiver, express or implied, by the Mortgagee to or of any
     default by Mortgagor shall be construed as a consent or waiver to or of any
     further default in the same or any other term, condition, covenant or
     provision of this Mortgage or of the Obligations secured hereby.

          (S)2.10.  FIXTURES AND EQUIPMENT; FINANCING STATEMENT.
                    ------------------------------------------- 

           This Mortgage constitutes a security agreement under the Uniform
     Commercial Code, and Mortgagor hereby grants to the Mortgagee to secure the
     payment and performance of the Obligations and also to secure the
     performance of all agreements and covenants herein contained, a security
     interest in all fixtures, Building Service Equipment and any other property
     included in the Property, now owned or hereafter acquired by Mortgagor,
     which might otherwise be deemed "personal property" (and all accessions
     thereto and the proceeds thereof).  The Mortgagor covenants and agrees that
     upon the subsequent acquisition of fixtures or Building Service Equipment,
     it will provide to the Mortgagee such further assurances as may be required
     by the Mortgagee to establish the Mortgagee's first and prior security
     interest in such fixtures and Building 
<PAGE>
 
                                      -9-

     Service Equipment. IT IS INTENDED BY MORTGAGOR AND THE MORTGAGEE THAT THIS
     MORTGAGE BE EFFECTIVE AS A FINANCING STATEMENT FILED WITH THE REAL ESTATE
     RECORDS AS A FIXTURE FILING. Mortgagor shall execute, deliver and cause to
     be recorded and filed from time to time with all necessary public offices,
     at Mortgagor's sole cost and expense, continuances and such other
     instruments as will maintain the Mortgagee's priority of security in all
     fixtures and Building Service Equipment. The names and addresses of the
     Mortgagor and the Mortgagee from which information concerning the security
     interest may be obtained are set forth in Section 5.1 hereof.
     
     (S)3.  DEFAULT AND REMEDIES

          (S)3.1.  DEFAULT; ACCELERATION OF OBLIGATIONS.
                   ------------------------------------ 

           If an Event of Default shall occur and be continuing the Mortgagee
     may exercise any and all remedies provided under this Mortgage, under the
     Notes, and under any and all other instruments and documents providing
     security for the Obligations, or any other remedies available under
     applicable law or any one or more of such remedies.

          (S)3.2.  STATUTORY CONDITION AND STATUTORY POWER OF SALE; OTHER
                   ------------------------------------------------------
     REMEDIES.
     -------- 

           This Mortgage is upon the STATUTORY CONDITION and upon the further
     condition that all covenants and agreements on the part of the Mortgagor
     herein undertaken shall be kept and fully and timely performed and that no
     breach of any of the covenants or conditions specified in this Mortgage
     shall be permitted for any breach of which, upon the occurrence and during
     the continuance of an Event of Default, the Mortgagee shall have the
     STATUTORY POWER OF SALE together with all other remedies now or hereafter
     permitted by law.  Such remedies shall include the right to collect and
     receive the rents and profits from the leases of the Property assigned to
     the Mortgagee.  Mortgagor agrees that neither the prior assignment of the
     leases to Mortgagee nor the exercise of any of Mortgagee's rights and
     remedies shall be deemed to make Mortgagee a mortgagee-in-possession or
     otherwise responsible or liable in any manner with respect to the leases
     the Property or the use, occupancy, enjoyment or operation of all or any
     portion thereof, unless and until Mortgagee, in person or by agent, assumes
     actual possession thereof.  No remedy herein conferred on the Mortgagee is
     intended to be exclusive of any other remedy and each and every remedy
     shall be cumulative and shall be in addition to every other remedy given
     hereunder or now or hereafter existing.

          (S)3.3.  RIGHT OF MORTGAGEE TO CURE AN EVENT OF DEFAULT.
                   ---------------------------------------------- 

           If an Event of Default shall have occurred and be continuing, the
     Mortgagee 
<PAGE>
 
                                      -10-

     shall have the right, but without any obligation so to do, to cure such
     default for the account of the Mortgagor and to make any payment or take
     any action necessary to effect such cure. Without limiting the generality
     of the foregoing, the Mortgagor hereby authorizes the Mortgagee to pay all
     taxes, sewer use fees, water rates and assessments, with interest, costs
     and charges accrued thereon, which may at any time be a lien upon the
     Property, or any part thereof; to pay the premiums for any insurance
     required hereunder; to incur and pay reasonable expenses in protecting its
     rights hereunder and the security hereby granted; and to pay any balance
     due under any security agreement on any fixtures and equipment included as
     a part of the Property under financing arrangements; and the payment of all
     amounts so incurred shall be secured hereby as fully and effectually as any
     other obligation of the Mortgagor secured hereby. If Mortgagee shall make
     any payment or take action in accordance with this section, Mortgagee will
     give to Mortgagor written notice of the making of any such payment or the
     taking of any such action. In any such event, Mortgagee and any person
     designated by the Mortgagee shall have, and is hereby granted, the right to
     enter upon the demised premises at reasonable times and from any time and
     from time to time for the purpose of taking any such action, and all monies
     expended by Mortgagee in connection therewith (including, but not limited
     to, reasonable legal expenses and disbursements), together with interest
     thereon at an annual rate of interest equal to the rate applicable to
     overdue payments under the Notes (or the highest rate permitted by law,
     whichever shall be less), from the date of each such expenditure, shall be
     paid by Mortgagor to Mortgagee forthwith upon demand by Mortgagee, and
     shall be secured by this Mortgage, and Mortgagee shall have, in addition to
     any other right or remedy of Mortgagee, the same rights and remedies in the
     event of nonpayment of any such sums by Mortgagor as in the case of a
     default by Mortgagor in the payment of any installment of principal or
     interest due and payable under the Notes.

          (S)3.4.  RECEIVER.
                   -------- 

           Upon the occurrence of an Event of Default, or any actual or
     threatened waste to all or any part of the Property, or at any time while a
     suit is pending to foreclose or reform this Mortgage or to enforce any
     provision hereof, Mortgagee shall have the right to apply for the
     appointment of a receiver of all or any part of the Property and the rents
     and profits thereof, and such receiver shall have all the broad and
     effective functions and powers anywhere entrusted by a court to a receiver.
     Mortgagee shall be entitled to the appointment of such receiver forthwith
     as a matter of absolute right, without regard to the adequacy or inadequacy
     of the value of the Property or the solvency or insolvency of Mortgagor or
     any other defendant, and Mortgagor hereby waives any right to object to the
     appointment of such receiver and expressly consents 
<PAGE>
 
                                      -11-

     thereto. The income, profits, rents, issues and revenues from the Property
     shall be applied by such receiver according to the provisions of this
     Mortgage and the practice of the court appointing such receiver.

          (S)3.5.  CERTAIN TERMS OF FORECLOSURE SALE.
                   --------------------------------- 

           At any foreclosure sale, any combination, or all, of the Property or
     security given to secure the indebtedness secured hereby, may be offered
     for sale for one total price, and the proceeds of such sale accounted for
     in one account without distinction between the items of security or without
     assigning to them any proportion of such proceeds, the Mortgagor hereby
     waiving the application of any doctrine of marshalling; and, in case the
     Mortgagee, in the exercise of the power of sale herein given, elects to
     sell in parts or parcels, said sales may be held from time to time, and the
     power shall not be fully executed until all of the property or security not
     previously sold shall have been sold.

          (S)3.6.  UNIFORM COMMERCIAL CODE.
                   ----------------------- 

           If the provisions of the Uniform Commercial Code as adopted in
     Massachusetts are applicable to any property or security given to secure
     the indebtedness secured hereby which is sold in combination with or as a
     part of the Property, or any part thereof, at one or more foreclosure
     sales, any notice required under such provisions shall be fully satisfied
     by the notice given in execution of the Statutory Power of Sale (described
     to below) with respect to the Property or any part thereof.

     (S)4.  DEFINITIONS

     The following terms as used herein shall have the following meanings:

          "Building Service Equipment" shall mean all apparatus, fixtures and
           --------------------------                                        
     articles of personal property owned by the Mortgagor now or hereafter
     attached to or used or procured for use in connection with the operation or
     maintenance of any building, structure or other improvement located on or
     included in the Property, including, but without limiting the generality of
     the foregoing, all engines, furnaces, boilers, stokers, pumps, heaters,
     tanks, dynamos, motors, generators, switchboards, electrical equipment,
     heating, plumbing, lifting and ventilating apparatus, air-cooling and air-
     conditioning apparatus, gas and electric fixtures, elevators, escalators,
     fittings, and machinery and all other equipment of every kind and
     description, used or procured for use in the operation of the building
     standing on the mortgaged Property (except apparatus, fixtures or articles
     of personal property belonging to lessees or other occupants of such
     building or to persons other than the Mortgagor unless the same be
     abandoned by any such lessee or other occupant or person), together with
     any and all replacements thereof and additions thereto.
<PAGE>
 
                                      -12-

          "Default" shall mean any event which, with the giving of notice or the
           -------                                                              
     lapse of time, or both, would become an Event of Default.

          "Event of Default" shall mean (a) any Event of Default under the Loan
           ----------------                                                    
     Agreement, as defined therein, or (b) any default in the payment or
     performance of the obligations of the Mortgagor hereunder, or (c) any
     representation or warranty of the Mortgagor hereunder proving to be untrue
     in any material respect or (d) any default in the performance of the
     obligations of the Mortgagor under any of the Loan Documents.

          "Improvements" shall mean all buildings, structures and other
           ------------                                                
     improvements located on the Premises.

          "Loan Agreement" shall mean the Commercial Revolving Loan, Term Loan
           --------------                                                     
     and Security Agreement between Mortgagor and Mortgagee dated as of the date
     hereof (the "LOAN AGREEMENT").

          "Loan Documents" shall mean this Mortgage, the Loan Agreement, the
           --------------                                                   
     Notes and any other agreements, documents or instruments now or hereafter
     executed in connection therewith, including but not limited to any
     assignment of leases and rents and any indemnity agreement regarding
     hazardous materials.

          "Mortgage" See page 1 of this instrument.
           --------                                

          "Mortgagee" shall mean the Mortgagee named at the beginning of this
           ---------                                                         
     instrument, and any subsequent holder or holders of this Mortgage.

          "Mortgagor" shall mean the person or persons named at the beginning of
           ---------                                                            
     this instrument as the Mortgagor, and any subsequent owner or owners of the
     equity of redemption of the Property.

          "Notes" shall mean the Revolving Promissory Note in the original
           -----                                                          
     principal amount of up to $1,500,000 and the Term Promissory Note in the
     original principal amount of $1,135,000, both from the Mortgagor and Memry
     Corporation to the Mortgagee and both dated the date hereof, as originally
     executed, or if varied, extended, supplemented, consolidated, amended or
     restated from time to time as so varied, extended, supplemented,
     consolidated, amended or restated.

          "Obligations" shall mean any and all indebtedness, obligations and
           -----------                                                      
     liabilities of Mortgagor to Mortgagee existing on the date hereof or
     arising or incurred hereafter under the Loan Agreement, the Notes, any
     other Loan Documents, or other instruments at any time evidencing any
     thereof, and any and all other indebtedness, obligations and liabilities of
<PAGE>
 
                                      -13-

     Mortgagor to Mortgagee however incurred, now existing or hereafter coming
     into existence, whether individually or collectively, direct or indirect,
     joint or several, absolute or contingent, matured or unmatured, liquidated
     or unliquidated, secured or unsecured, arising thereunder or hereunder by
     contract, operation of law or otherwise.

          "Permitted Encumbrances" shall mean the encumbrances listed on
           ----------------------                                       
     Schedule B to the title insurance policy delivered to the Mortgagor in
     ----------                                                            
     connection herewith.

          "Premises" shall have the meaning assigned to that term in Schedule B
           --------                                                  ----------
     hereto, which is incorporated herein by reference as if fully set forth
     herein.

          "Property" shall have the meaning set forth in Schedule A to this
           --------                                      ----------        
     Mortgage.

     (S)5.  MISCELLANEOUS

          (S)5.1.  NOTICES.
                   ------- 

           All notices, requests and other communications hereunder shall be
     made in writing and delivered in hand or mailed by first-class mail,
     postage prepaid, or sent by commercial overnight courier delivery service,
     charges prepaid, or sent by telex, telecopier or hand delivery, addressed
     as follows:


           (a) If to Mortgagor:

                    Wright Machine Corporation
                    69 Armory Street
                    Worcester, Massachusetts

               with a copy to:

                    Memry Corporation
                    57 Commerce Drive
                    Brookfield, Connecticut 06804
                    Attention:  James G. Binch

          

           (b) If to Mortgagee:

                    Affiliated Business Credit Corporation
                    72 Queen Street
                    Southington, CT 06489
<PAGE>
 
                                      -14-


          Any such notice shall be deemed to have been given when delivered in
     hand to an officer of the addressee, or one (1) day after being delivered
     to a commercial overnight courier delivery service, charges prepaid, for
     next day delivery, or when deposited in the United States mails, registered
     or certified mail, postage prepaid, and, in each case addressed as provided
     above or to such other address as the party to whom such communication is
     being sent shall have notified the other party hereto (in the manner
     specified herein) to be its address for purposes of this Mortgage.

          (S)5.2.  SUCCESSORS AND ASSIGNS; JOINT AND SEVERAL LIABILITY; PARTIAL
                   ------------------------------------------------------------
     INVALIDITY.
     ---------- 

           All the covenants and agreements of the Mortgagor herein contained
     shall be binding upon the Mortgagor and the successors and assigns of the
     Mortgagor.  In case any one or more of the provisions of this Mortgage may
     be found to be invalid, or unenforceable for any reason or in any respect,
     such invalidity or unenforceability shall not limit or impair enforcement
     of any other provision thereof.

          (S)5.3.  MODIFICATION.
                   ------------ 

          No change, amendment, modification, cancellation or discharge of this
     Mortgage, or any part hereof, shall be valid unless in writing and signed
     by the parties hereto or their respective successors and assigns.

          (S)5.4.  CAPTIONS.
                   -------- 

           Section headings are inserted for convenience of reference only, do
     not form part of this Mortgage and shall be disregarded for purposes of the
     interpretation of the terms of this Mortgage.

          (S)5.5.  GOVERNING LAW.
                   ------------- 

           This Mortgage shall be governed by and construed in accordance with
     the laws of the Commonwealth of Massachusetts.
<PAGE>
 
                                      -15-


IN WITNESS WHEREOF, this Mortgage and Security Agreement has been executed as a
sealed instrument this 9th day of August, 1996.


                                       WRIGHT MACHINE CORPORATION
                                                                       
/s/ James Shaughnessy                  By: /s/ James G. Binch              
------------------------                  -------------------------
James Shaughnessy                         James G. Binch             
                                          Its President               
/s/ David I. Albin                        Duly Authorized       
------------------------
David I. Albin                                                         
                                                                       
/s/ James Shaughnessy                  By: /s/ Wendy A. Gavaghan          
------------------------                  -------------------------
                                          Wendy A. Gavaghan            
/s/ David I. Albin                        Its Secretary           
------------------------                  Duly Authorized              
                                                                        
<PAGE>
 
                                      -16-


STATE OF CONNECTICUT  )
                      )    ss:  Hartford
COUNTY OF HARTFORD    )

     On this the 9th day of August, 1996 before me, Nina C. Crane, the
undersigned officer, personally appeared James G. Binch, who acknowledged
himself to be the President of Wright Machine Corporation, a corporation and
that he as such President, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself as such President and as his/her and its free act and
deed.

     In witness whereof I hereunto set my hand.

 
                              /s/ Nina C. Crane
                              --------------------------
                              Notary Public
                              My Commission Expires:

STATE OF CONNECTICUT  )
                      )    ss:  Hartford
COUNTY OF HARTFORD    )

     On this the 9th day of August, 1996 before me, Marlene Febeo, the
undersigned officer, personally appeared Wendy A. Gavaghan, who acknowledged
him/herself to be the Secretary of Wright Machine Corporation, a corporation and
that he/she as such Secretary, being authorized so to do, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by him/herself as such Secretary and as his/her and its free act and
deed.

     In witness whereof I hereunto set my hand.

 
                              /s/ Marlene Febeo
                              -----------------------------
                              Notary Public
                              My Commission Expires:
<PAGE>
 
                                   SCHEDULE A
                                   ----------

     (a) All that certain tract or parcel of land more particularly described
and set forth in Schedule B attached hereto and made a part hereof (the
                 ----------                                            
"PREMISES"):

     (b) All and singular the tenements, hereditaments, easements,
appurtenances, passages (and all waters, water courses and riparian rights, if
any), pipes, conduits, electrical and other utility lines, other rights,
liberties and privileges thereof or in any way now or hereafter appertaining to
the Premises, including any other claim at law or in equity as well as any after
acquired title, franchise or license and the reversion and reversions and
remainder and remainders thereof, and all of the estate, right, title, claim or
Term whatsoever of Mortgagor therein and in the streets, ways and areas adjacent
thereto:

     (c) All buildings and other improvements of every kind and description now
or hereafter erected or placed on the Premises or any part thereof owned by the
Mortgagor, and all of the right, title and interest of Mortgagor in and to all
materials intended for construction, reconstruction, alteration and repairs of
such improvements now or hereafter erected thereon, all of which materials shall
be deemed to be included within the Premises immediately upon the delivery
thereof to the Premises, and all fixtures, Building Service Equipment, and all
renewals or replacements thereof or articles in substitution therefor; it being
mutually agreed that all the aforesaid property owned or to be owned by
Mortgagor and placed by it on the Premises and such buildings and improvements
shall, so far as permitted by law, be deemed to be affixed thereto and covered
by this Mortgage;

     (d) All of the estate, right, title and interest now owned or hereafter
acquired by Mortgagor in and to any and all sidewalks and alleys, and all strips
and gores of land, adjacent to or in connection with the Premises;

     (e) All present and future leases and licenses of space in the buildings
and improvements now or hereafter erected on the Premises (collectively
"LEASES", and individually a "LEASE") and the rents, revenues, income, issues
and profits thereunder subject, however, to the right of Mortgagor to receive
and use the same and to exercise all rights and privileges as landlord under all
of the leases until an Event of Default shall have occurred and be continuing
under this Mortgage, together with all the rights and privileges of the
Mortgagor as landlord thereunder;

     (f) All unearned premiums accrued, accruing or to accrue under any and all
insurance policies now or hereafter obtained by the Mortgagor pursuant to the
provisions of the Mortgage;
<PAGE>
 
                                      -2-


     (g) All proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, but without limitation,
proceeds of insurance provided for in this Mortgage and proceeds of condemnation
awards and awards for restriction of access to, or change of grade of, streets;

     (h) All transferable building service, building maintenance, construction,
management and other similar agreements and contracts, written or oral, express
or implied, now or hereafter entered into arising or in any manner related to
the construction, design, improvement, use, operation, occupation, enjoyment,
sale, conversion or other disposition (voluntary or involuntary) of the
Premises, or the buildings and improvements now or hereafter located thereon, or
any other interest in the Premises, or any combination thereof, including all
property management agreements, sales contracts, contract deposits, earnest
money deposits, prepaid items and payments due and to become due thereunder, and
further including all payment and performance bonds, construction guaranties,
warranties, construction contracts, architects agreements, general contract
agreements, design agreements, engineering agreements technical service
agreements, architectural plans and specifications, sewer and water and other
utility agreements, permits, approvals, licenses, building permits, service
contracts, advertising contracts, purchase orders and equipment leases; and

     (i) All proceeds and products of the foregoing of every type.

     All of the foregoing described property, rights, privileges, interests and
franchises more particularly described in paragraphs (a) through (i) above
herein granted are intended to be, and are collectively referred to herein as,
the "Property."
<PAGE>
 
                                   SCHEDULE B
                                   ----------

                        [LEGAL DESCRIPTION OF PREMISES]

                             Intentionally Omitted