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                                    OPEN-END
                      MORTGAGE DEED AND SECURITY AGREEMENT

     THIS OPEN-END MORTGAGE DEED AND SECURITY AGREEMENT (the "MORTGAGE") is made
this 23rd day of December, 1998, by ACMAT CORPORATION, a Connecticut
corporation, with a principal place of business at 233 Main Street, New Britain,
Connecticut ("BORROWER"), to WEBSTER BANK, a Connecticut banking corporation,
with a principal place of business at 150 Main Street, Bristol, Connecticut
06010 ("LENDER").

     IN CONSIDERATION OF THE MORTGAGE DEBT (hereinafter defined) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower does hereby give, grant, bargain, sell and confirm, with
MORTGAGE COVENANTS, unto Lender, Lender's successors and assigns forever, the
following property:

     A. LAND: That certain piece or parcel of real property known as 233-235
Main Street, New Britain, Connecticut, more particularly described in Schedule A
attached hereto and made a part hereof, and all permits, approvals, rights,
privileges and easements appurtenant thereto (the "LAND").

     B. IMPROVEMENTS: All the buildings, structures and improvements now or
hereafter placed on the Land (the "IMPROVEMENTS").

     C. SERVICE EQUIPMENT: All fixtures, appliances, machinery and equipment now
or hereafter installed upon the Land or the Improvements, including, without
limitation, gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, stoves, ranges, elevators, escalators, incinerators, motors,
dynamos, sinks, disposals, dishwashers, water closets, basins, medicine chests,
pipes, faucets and other plumbing and heating fixtures, ventilating apparatus,
dryers, washing machines, heating, ventilating and air-conditioning equipment
and units, paneling, refrigerating plants, refrigerators, whether mechanical or
otherwise, alarm, fire prevention and extinguishing apparatus, shades, awnings,
screens, blinds, rugs, carpeting, wall cabinets, trees, shrubbery and other
plantings, and such other goods, chattels and personal property as are now or
hereafter attached to, or used or furnished in connection with the letting or
operation of, the Land and/or the Improvements, or in connection with the
activities conducted thereon, and all proceeds, renewals or replacements thereof
or additions thereto or articles of substitution thereof (the "SERVICE
EQUIPMENT").

     D. CONDEMNATION PROCEEDS: All awards or payments, including interest
thereon, which may be made with respect to the Land, the Improvements or the
Service Equipment as a result of the exercise of the right of eminent domain.

     E. LEASES: All right, title and interest of Borrower in and to any and all
leases, tenancies or rights of use and occupancy, with amendments, if any, and
any extensions, renewals


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or guaranties of the tenants' obligations thereunder, now or hereafter on or
affecting the Land and/or the Improvements, whether or not recorded, with all
security therefor and all monies payable thereunder, and all books and records
which reflect payments made under such leases (collectively, the "LEASES").

     F. PROPERTY INCOME: All rents, income, profits, security deposits and other
benefits to which Borrower may now or hereafter be entitled from the Land and/or
Improvements, and/or the business operations conducted thereat or therefrom (the
"PROPERTY INCOME").

     G. TAX REFUNDS: All rights of Borrower now or hereafter arising in and to
any refunds of Taxes (as defined herein), or other charges relating to the Land
and/or the Improvements, or the debt secured hereby.

     TO HAVE AND TO HOLD the above granted and bargained premises, with the
privileges and appurtenances thereof (collectively referred to herein as the
"PROPERTY"), but subject to those encumbrances, if any, listed upon Schedule B
attached hereto (the "PERMITTED ENCUMBRANCES"), unto Lender, Lender's successors
and assigns forever, to Lender's and their own proper use and behoof.

     THE CONDITION OF THIS DEED IS SUCH THAT:

     WHEREAS, Borrower is justly indebted to Lender pursuant to a certain
promissory note of even date herewith in the principal amount of $7,800,000 (the
"LOAN"), a copy of which note is attached hereto and made a part hereof as
SCHEDULE C (the "NOTE"). This Mortgage is also subject to the following
additional terms and conditions:


                                    ARTICLE 1
                    COVENANTS AND REPRESENTATIONS OF BORROWER

     Borrower covenants and represents to Lender as follows:

     1.1 PAYMENT AND PERFORMANCE. Borrower shall pay the Loan and all other
indebtedness secured hereby, including without limitation Loan Advances under
the Note, in lawful money of the United States and pay and perform all of its
obligations under this Mortgage, the Loan Agreement, the commitment letter
signed and accepted by Borrower in connection with the Loan (the "COMMITMENT
LETTER") and every other instrument now or hereafter securing, evidencing or
relating to the Loan (this Mortgage, the Note, the Commitment Letter and such
other instruments being collectively referred to herein as the "LOAN DOCUMENTS")
at the times and in the manner set forth in such Loan Documents. All amounts due
the Lender under any of the aforesaid instruments shall be secured by the lien
of this Mortgage and shall hereinafter be referred to as the "MORTGAGE DEBT". If
Borrower consists of more than one party, all of the obligations,


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covenants and warranties of Borrower contained in this Mortgage shall be the
joint and several obligations of all the parties constituting Borrower.

     1.2 INSURANCE.

          A. Borrower shall keep the Property insured against loss by fire,
flood and other hazards, casualties, contingencies and all other "extended
coverage" risks, including rent, business interruption, liability, indemnity, if
available, in such amounts and with such deductibles and companies as Lender may
reasonably require. Borrower shall promptly pay when due the premiums on such
insurance policies. Each insurance policy shall contain, in a form reasonably
acceptable to Lender, a provision to the effect that the policy will not be
canceled without at least ten (10) days prior written notice to Lender, the
standard non-contributing mortgagee endorsement (entitling Lender to collect all
proceeds payable under such insurance), the standard waiver of subrogation
endorsement, and any other endorsement reasonably required by Lender. All
liability insurance carried on the Property must show Lender as an additional
insured. Borrower shall deliver copies of all existing policies (or such other
evidence of insurance reasonably acceptable to Lender) to Lender at Lender's
request and shall deliver copies of all additional and renewal policies (or such
other evidence of renewal reasonably acceptable to Lender), with current premium
bills therefor marked "Paid", to Lender at least thirty (30) days before the
expiration of the old policies.

          B. After the happening of any casualty to the Property, Borrower shall
give prompt written notice thereof to Lender, and the following provisions shall
apply:

               (1) All proceeds of insurance maintained with respect to the
Property (the "INSURANCE PROCEEDS") shall be payable to Lender, and Lender is
hereby authorized and empowered by Borrower to make proof of loss on, and to
collect, settle, adjust or compromise, any claims for loss, damage or
destruction under any policy or policies of insurance. Provided, however, that
so long as no Event of Default has then occurred, Lender will consult with
Borrower in connection with the settlement, adjustment or compromise of any such
claim, but such right of consultation shall not affect or diminish the rights of
Lender to make all determinations and decisions in respect of the settlement,
adjustment or compromise of any such claim. Borrower does hereby indemnify
Lender and hold Lender harmless against and from any and all claims and
liabilities asserted against Lender in connection with the collection,
adjustment or compromise of any insured loss. Each insurer is authorized and
directed hereby to make payment under such insurance policies, including return
of unearned premiums, directly to Lender instead of to Borrower and Lender
jointly, and Borrower appoints Lender, irrevocably, as Borrower's
attorney-in-fact to endorse any draft therefor. All such Insurance Proceeds
received by Lender shall be held by Lender and applied and disbursed in
accordance with the provisions of this Section.

               (2) If the Insurance Proceeds received by Lender for any single
occurrence of damage to or destruction of the Property ("DAMAGE") is $500,000 or
more, Lender


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may in its sole discretion, elect to apply such Insurance Proceeds to the
Mortgage Debt or hold such Insurance Proceeds and apply them to the repair,
restoration, or reconstruction of the Property (the "RESTORATION") in accordance
with the procedures set forth in subparagraph (3) below.

               (3) If the Insurance Proceeds received by Lender for any single
occurrence of Damage is more than $100,000, but less than $500,000, no Event of
Default has then occurred, and no Leases have been terminated (or the tenants
have waived their right to terminate) as a result of the Damage, Lender shall
hold such Insurance Proceeds and apply them to the Restoration in accordance
with the following: Prior to the commencement of any work and the disbursement
of any funds so held by Lender, Borrower shall provide Lender with final plans
and specifications for the Restoration (the "PLANS AND SPECIFICATIONS"), which
Plans and Specifications, and the identity of Borrower's architect and
engineer(s) ("BORROWER'S CONSULTANT"), shall be subject to Lender's prior
written approval. Each request made to Lender for the disbursement of any
portion of the Insurance Proceeds shall be accompanied by a certificate of
Borrower's Consultant (in form reasonably acceptable to Lender) in respect of
that portion of the Restoration for which payment is claimed to be due. In
connection with each such disbursement, Lender also shall receive evidence
satisfactory to it that there are then no outstanding mechanics' or
materialmen's liens against the Property, that the amount of any previous
disbursement has been paid to and received by the party entitled to the same,
and that the funds remaining in Lender's possession shall be sufficient to
complete such repair, restoration or reconstruction. Lender will impose a ten
percent (10%) retainage on all funds advanced. The Restoration shall be
completed in a good and workmanlike manner in accordance with the Plans and
Specifications. Lender shall not be required to make disbursements more
frequently than monthly nor in amounts less than $50,000. In all other respects,
the disbursement of Insurance Proceeds shall be made in accordance with Lender's
customary procedures for the disbursement of construction advances. Upon the
occurrence of an Event of Default, Lender may apply the Insurance Proceeds to
the Mortgage Debt in such manner as it shall determine in its discretion.

               (4) If the Insurance Proceeds received by Lender for any single
occurrence of damage to or destruction of the Property is $100,000 or less, and
no Event of Default has then occurred, such Insurance Proceeds shall be
disbursed by Lender to Borrower for the Restoration.

               (5) The balance of any Insurance Proceeds held by Lender after
the completion of the Restoration shall, in Lender's discretion, be paid to
Borrower or applied by Lender to the Mortgage Debt.

               (6) Nothing herein contained shall be deemed to excuse Borrower
from repairing or maintaining the Property as provided in SECTION 1.6 hereof or
from restoring all damage or destruction to the Property, regardless of whether
or not there are Insurance Proceeds available or whether such Insurance Proceeds
are sufficient in amount, nor shall anything provided hereinabove limit Lender's
right to take such actions as it may in its sole discretion choose to take


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to protect the security hereof pursuant to ARTICLE 3 hereinafter, and the
application or release by Lender of any Insurance Proceeds shall not cure or
waive any default or notice of default under this Mortgage or invalidate any act
done pursuant to such notice.

     1.3 TAXES.

          A. Borrower shall pay, before the same become delinquent, all taxes,
assessments, and governmental charges and impositions of any kind whatsoever for
which lien rights exist, which may now or hereafter be assessed or levied upon
any part of the Property, or in lieu of or in addition to a tax on the Property
(all such charges and payments collectively referred to herein as the "TAXES").
If Borrower fails to pay any such Taxes as aforesaid, Lender may pay same and
the amount of such payments shall constitute Lender Advances pursuant to SECTION
3.4 hereof. Borrower shall deliver to Lender, at its request, receipts for the
payment of each item specified above, prior to the date the item will become
delinquent. Borrower shall promptly notify Lender of the delinquency in the
payment of any Taxes due. Notwithstanding the foregoing, Borrower may contest in
good faith, by appropriate proceedings, the payment of Taxes for which Borrower
has either paid such Taxes (or portion thereof) as may be required as a
condition to instituting such a proceeding, or established on its books or by
deposit of cash with Lender, at the option of Lender, a reserve for the payment
thereof in such amount as Lender may require, so long as such contest: operates
to prevent collection, stay any proceedings which may be instituted to enforce
payment of such item, and prevent a sale of the Property to pay such item; is
maintained and prosecuted with due diligence; and shall not have been terminated
or discontinued adversely to Borrower.

          B. Upon the request of Lender, Borrower shall pay to Lender, together
with and in addition to the monthly installments of principal and interest
provided in the Note, an amount (as estimated from time to time by Lender in its
sole discretion) equal to one-twelfth (1/12th) of the yearly Taxes assessed
against the Property and sufficient funds to pay the insurance premiums required
under SECTION 1.2 when due. Borrower agrees that any funds deposited with or
paid to Lender pursuant to this SUBSECTION B. shall create only an indebtedness,
and not a trust or agency relationship, between Borrower and Lender, which shall
be liquidated to the extent of Lender's payments as aforesaid. Unless otherwise
required by law, no interest shall be payable on such funds. If the tax escrow
payments are not sufficient to pay the Taxes on the date they become due and
payable, Borrower shall pay to Lender the amount necessary to make up the
deficiency on or before said date. Upon, and any time after, the occurrence of
an Event of Default, Lender may, at its option, apply the accumulated escrow
balance remaining as a credit against the Mortgage Debt. Notwithstanding the
foregoing, escrow payments shall not be required so long as there is no Event of
Default hereunder, Borrower pays all Taxes when due, and Borrower provides
Lender with copies of receipted tax bills, canceled checks or other evidence
reasonably satisfactory to Lender that such Taxes have been timely paid.

     1.4 CONDEMNATION. Borrower shall give Lender immediate notice of the actual
or (if known to Borrower) threatened commencement of any eminent domain
proceedings


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affecting any part of the Property, and shall deliver to Lender copies of all
papers served in connection therewith. Borrower hereby appoints Lender as its
attorney-in-fact, coupled with an interest, and authorizes Lender to collect,
receive, and retain, the proceeds of any such award or payment, to give proper
receipts therefor and, if an Event of Default has occurred, to adjust,
compromise and settle the claim therefor. Lender shall have the right to
intervene and participate in any eminent domain proceedings, and Borrower shall
consult with Lender in all matters pertaining to the adjustment, compromise or
settlement of such proceedings and shall not enter into any agreement with
respect to such matters without the prior written consent of Lender, which shall
not be unreasonably withheld. Borrower agrees to execute and deliver upon
request any other instruments deemed necessary by Lender to confirm or assign to
Lender all awards and other compensation to be made for any taking of the
Property. Lender may, in its sole discretion, retain and apply any eminent
domain award or payment toward payment of the Mortgage Debt or pay same over
wholly or in part to Borrower. If a part of the Property shall have been taken
in any eminent domain proceedings and the remaining part of the Property shall
have been sold in foreclosure of this Mortgage prior to the receipt by Lender of
the award or payment, Lender, to the extent permitted by applicable law, shall
have the right to receive the award or payment to the extent of any deficiency
found to be due upon such sale, with legal interest thereon, and including
reasonable counsel fees, costs and disbursements incurred by Lender in
connection with the collection of such award or payment.

     1.5 COMPLIANCE WITH LAW, ETC.

          A. Borrower presently does, and shall continue to, observe and comply
with all laws, regulations, zoning and subdivision ordinances, building codes,
rules, and orders affecting the Property or the business operations thereon; the
terms of each insurance policy applicable to the Property; and all conditions
and requirements necessary to preserve and maintain all rights, licenses,
permits, privileges, franchises and concessions which are applicable to the
Property or business activities conducted at or from the Property, or which have
been granted to or contracted for by Borrower or by any tenant under the Leases.
Upon receipt, Borrower shall promptly furnish to Lender copies of all notices,
orders, summonses, correspondence and other similar items delivered to or served
upon Borrower pertaining to any of the foregoing.

          B. Upon receipt, Borrower shall promptly furnish to Lender, or its
designee, copies of all correspondence from the Connecticut Department of
Environmental Protection (the "DEP"), the Federal Environmental Protection
Agency (the "EPA"), the Occupational Safety and Health Administration, or any
similar entity (individually, a "REGULATORY AUTHORITY") to Borrower (other than
routine mass informational mailings) and, upon request, shall direct such entity
to send copies of all such correspondence directly to Lender. Borrower shall
furnish to Lender copies of all correspondence, permit applications, and
property transfer related forms and reports from Borrower to any Regulatory
Authority, copies of all periodic reports required by any environmental law or
any permit, and copies of all records, forms and documents which Borrower is
required to produce or maintain pursuant to any environmental law or any permit.
If, as a result of a Spill (as defined below) or a release of hazardous waste,
Borrower may be legally obligated


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to report to or notify any Regulatory Authority, Borrower shall promptly notify
Lender in writing that such obligation has been triggered. Failure to comply
with this requirement shall constitute an Event of Default hereunder.

          C. Lender may, at any time and from time to time, cause to be
conducted and completed by engineers, consultants and others selected by Lender,
such investigations, studies, sampling and testing of the condition of the
Property and the compliance by Borrower and all occupants of the Property with
applicable environmental laws as Lender, in its sole discretion, shall deem
reasonably appropriate. All such investigations, studies, sampling and testing
shall be at Borrower's expense, provided, however, that Borrower shall not be
required to bear such expense so long as there is no Event of Default hereunder,
and Lender has no cause to believe, in its reasonable judgment, that there has
been a Spill (as defined below) or threatened Spill at the Property or that
Borrower is in violation of any environmental law. Borrower agrees to cooperate
with Lender and all persons retained by Lender to conduct such investigations
and to provide them with access to the Property and the books and records of
Borrower.

          D. Borrower shall indemnify Lender and hold Lender harmless from and
against all loss, liability, damage and expense, including attorneys' fees and
diminution in property value, suffered or incurred by Lender, whether as holder
of this Mortgage, as mortgagee in possession or as a successor in interest to
Borrower as owner of the Property by virtue of foreclosure or acceptance of a
deed in lieu of foreclosure under or on account of any remedial or other
environmental or health and safety related obligation imposed by laws such as
Chapter 446K of the Connecticut General Statutes Revision of 1958, as amended
(the "ACT") or related regulations, or any similar applicable federal laws or
regulations, including the assertion of any lien thereunder; with respect to any
release, discharge, spillage, uncontrolled loss, seepage or filtration of oil or
petroleum or chemical liquids or solid, liquid or gaseous products or hazardous
waste which, if contained or removed or mitigated by the State of Connecticut,
could give rise to a lien under Connecticut General Laws Section 22a-452a, as
amended (a "SPILL") affecting the Property (whether or not the same originates
or emanates from the Property or any contiguous real estate) including any loss
of value of the Property as a result of such Spill; and with respect to any
other matter affecting the Property and governed by the provisions of the Act,
other environmental or health and safety laws, their related regulations, or any
similar applicable federal laws or regulations.

          E. In the event of any Spill or release affecting the Property,
whether or not the same originates or emanates from the Property or any
contiguous real estate, Borrower shall contain, remove or mitigate same in
accordance with applicable laws and regulations and any directives of the State
of Connecticut. If Borrower shall fail to remedy such Spill or otherwise comply
with any of the requirements of the Act or related regulations or any other
environmental law or regulation, Lender may at its election, but without the
obligation to do so, give such notices and/or cause such work to be performed at
the Property and/or take any and all other actions as Lender shall deem
necessary or advisable in order to remedy the Spill or cure such failure of
compliance in order to protect its security in interest in the Property, and any
amounts paid as a


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result thereof shall be reimbursed by Borrower upon demand by Lender, shall bear
interest at the "Default Rate" provided for in the Note, and shall be secured by
the lien of this Mortgage. Borrower shall provide Lender, its agents and
contractors access to the Property for such remedial work to occur. Borrower
hereby indemnifies and holds Lender harmless from all loss, expense and
liability arising out of such remedial activity.

     1.6 MAINTENANCE AND REPAIR; INSPECTION

          A. Borrower shall keep and maintain the Property in good condition,
working order and repair; not permit, commit or suffer any waste of the
Property; (i) not permit the Property or any part thereof to become vacant,
deserted or unguarded; (ii) repair, replace, rebuild or restore any part of the
Property which may be damaged or destroyed by any casualty or affected by
eminent domain, whether or not the proceeds of any insurance or eminent domain
proceedings are available therefor; (iii) complete and pay for when due any
construction undertaken on the Property; and (iv) make all other repairs and
replacements to the Property which Lender may reasonably require. All such work
shall be done promptly in good and workmanlike manner.

          B. Lender and any person authorized by Lender shall have the right to
enter and inspect the Property at all reasonable times.

     1.7 SALE, ENCUMBRANCE AND USE.

          A. Borrower shall not, without Lender's prior written consent, which
may be withheld in Lender's sole discretion for any reason whatsoever, initiate
or allow any Transfer (as defined in subsection C. below) of title to all or any
part of the Property; voluntarily create or grant any liens, mortgages or
encumbrances against such title; initiate or allow any change in the nature of
the use and occupancy of the Property, including any such change which
materially increases the possibility of a Spill; or record any Declaration of
Common Interest Community.

          B. Borrower shall keep and maintain the Property free from the claim
of all persons supplying labor or materials in connection with the construction
or repair of any Improvements constituting a part of the Property. Borrower
shall furnish, at Lender's request, all waivers and releases of liens or claims
upon or with respect to the Property or any Service Equipment.

          C. The term "Transfer" as used in this SECTION 1.7 shall mean:

               (1) any sale, conveyance, transfer, gift or other disposition of
the Property or any interest therein, whether voluntary, involuntary, or by
operation of law, or Borrower's entry into any contract or option agreement to
accomplish same;

               (2) if Borrower is a corporation, a merger, consolidation,
division, recapitalization, spin-off, or other corporate reorganization of
Borrower;


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               (3) any dissolution or liquidation of, or the filing of a suit to
dissolve or liquidate Borrower;

               (4) a lease or leases of the Land, Improvements or Service
Equipment, wherein the proposed tenant or tenants do not intend to occupy the
Property but intend to sell, sublease or assign their interest to effectuate a
long-term lease or sale and leaseback for financing purposes;

               (5) any other act by which the economic benefit, entrepreneurial
risk or management responsibility with respect to the Property is shifted to
someone other than Borrower.

          D. Borrower shall promptly notify Lender if any lien, attachment or
encumbrance is recorded against the Property without Borrower's consent and will
cause the lien to be canceled and discharged of record within thirty (30) days
after its recording.

          E. Any attempted action contrary to the provisions of this SECTION 1.7
shall be void, but shall constitute an Event of Default hereunder. Borrower
agrees that if the ownership of the Property or any part thereof becomes vested
in a person or entity other than Borrower, Lender may, upon notice to Borrower,
deal in any way with such successor or successors in interest without in any way
impairing or discharging Borrower's liability hereunder, under the Note or the
Mortgage Debt.

     1.8 LEASES. Borrower shall not take any action, the effect of which would
be to cause any Lease with any affiliate or subsidiary of Borrower, including
without limitation, AMINS, Inc., ACMAT of Texas, Inc., ACSTAR Holdings, Inc.,
ACSTAR Insurance Company and United Coastal Insurance Company ("AFFILIATE
LEASE") to cease to be in full force and effect, and will not, except with the
prior written consent of Lender, cancel or terminate any Affiliate Lease, or
consent to any cancellation, termination or surrender thereof, or any assignment
thereof; amend, modify or subordinate any Affiliate Lease; enter into any new
Affiliate Lease; waive any default under or breach of any Lease; or consent to
any prepayment or discount of rent or advance rent under any Affiliate Lease.
Lender shall have the right to review and reasonably refuse written consent to
any of the above proposed actions of Borrower based upon the substance of the
proposed transaction, the creditworthiness of Borrower or the tenant, and the
financial condition of the Property.

     1.9 PROPERTY INCOME. Borrower hereby assigns, transfers and grants a
security interest to Lender in and to the Property Income to secure the Mortgage
Debt. Borrower shall not otherwise assign, transfer or encumber the Property
Income in any manner. Borrower may, so long as no Event of Default has occurred
hereunder, collect and use the Property Income, as the same becomes due and
payable, but may not collect same more than thirty (30) days in advance of the
date the same becomes due. Upon the occurrence of an Event of Default, the
permission hereby given to Borrower to collect the Property Income shall
terminate. The foregoing


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provisions hereof shall constitute an absolute and present assignment of the
Property Income, subject, however, to the conditional permission given to
Borrower to collect and use such Property Income as hereinabove provided. The
existence or exercise of such right of Borrower shall not operate to subordinate
this assignment to any subsequent assignment, in whole or in part, and any such
subsequent assignment by Borrower shall be subject to the rights of Lender
hereunder.

     1.10 REMOVALS, ALTERATIONS AND DEMOLITION. No Improvement or Service
Equipment shall be removed, altered, demolished or erected without the prior
written consent of Lender. All such changes, additions and alterations shall
become part of the Property immediately upon installation. Any replacement
equipment shall constitute Service Equipment and be subject to the lien of this
Mortgage.

     1.11 PROTECTION OF LIEN AND OTHER EXPENSES. Borrower shall pay, indemnify,
defend and hold Lender harmless from: all costs, disbursements, expenses and
reasonable counsel fees incurred by Lender in connection with protecting or
sustaining the lien of this Mortgage; any proceeding, action, suit, hearing,
motion or application in which Lender is a party by reason hereof or in which,
in Lender's opinion, it becomes necessary to defend and uphold the terms or
priority of this Mortgage; the preparation for enforcement of the Loan Documents
after the occurrence of an Event of Default and negotiations with Borrower in
connection with the existence or cure of such an Event of Default; any proposed
refinancing by Lender of the Mortgage Debt; the transfer of the Property in lieu
of foreclosure; the approval by Lender of actions taken or proposed to be taken
by Borrower or others, which approval is required by the terms of this Mortgage
or other Loan Documents; and all damages, reasonable costs and expenses
(including, without limitation, attorney's fees) paid by or imposed upon Lender
in connection with any bodily injury, death or property damage occurring in or
upon, or in the vicinity of, the Property through any cause whatsoever or
asserted against Lender on account of any act performed or omitted to be
performed hereunder (other than such acts or omissions constituting the gross
negligence of Lender) or on account of any transaction arising out of or in any
way connected with the Property, this Mortgage or the Mortgage Debt.

     1.12 ESTOPPEL CERTIFICATES; INSTRUMENTS OF FURTHER ASSURANCE. Borrower
shall deliver to Lender within ten (10) days after any request a duly
acknowledged certificate setting forth the amount of principal and interest due
and payable on the Loan and whether any offsets or defenses exist with respect
to this Mortgage or the Mortgage Debt. Upon Lender's request, Borrower shall use
its best efforts and due diligence to obtain delivery of the duly acknowledged
certificate of any person having or acquiring an interest in or encumbrance on
all or any part of the Property setting forth the nature and extent of the
interest and stating that the interest is subordinate to this Mortgage and
whether any offsets or defenses exist with respect to this Mortgage or the
Mortgage Debt.

     1.13 ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION. Borrower shall
maintain a system of accounts established and administered in accordance with


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GAAP and practices consistently applied. Borrower shall deliver or cause to be
delivered to Lender:

          A. Financial Reports.

               (1) As soon as available and in any event within forty-five (45)
days after the end of each Fiscal Quarter after the date hereof, a balance sheet
of the Borrower, in consolidating and consolidated form, as of the end of such
period, and a statement of income and retained earnings of the Borrower, in
consolidated form, for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, all in reasonable detail, and duly
certified by the chief financial officer of the Borrower as having been prepared
in accordance with GAAP and fairly presenting the financial position and results
of operations of the Borrower for such period, together with a statement of such
individual preparing such statements to the effect that in the course of the
preparation of such statements said individual has gained no knowledge that an
Event of Default has occurred and is continuing or, if, in the opinion of said
individual, an Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action which the Borrower proposes to take with
respect thereto (the provision for such a statement herein shall in no way be
construed as a consent to the existence of such an event nor the granting of
time to cure). In addition, said preparer shall complete and forward to Lender
together with such financial statements the completed Covenant Compliance
Certificate in the form attached as Exhibit E to certain Commercial Credit
Agreement by and between Borrower, Bank Boston, N.A. and ACSTAR Holdings, Inc.

               (2) As soon as available and in any event within ninety (90) days
after the end of the Fiscal Year of the Borrower, a copy of the annual audited
report for such year for the Borrower, including therein, a balance sheet of the
Borrower as of the end of such Fiscal Year and a statement of income, retained
earnings and statement of changes in financial position of the Borrower for such
Fiscal Year, in each case on a consolidated basis, and in each case "Certified"
by a firm of independent certified public accountants selected by the Borrower,
together with the unqualified opinion of such accounting firm to Lender stating
that the financial statements audited by such firm present fairly, in all
material respects, the financial position of Borrower as of the date of such
financial statements and the results of its operations and its cash flow for the
Fiscal Year then ended, all in conformity with GAAP, together with the
certificate of such accounting firm that, in the course of its audit of
Borrower, it has obtained no knowledge that an Event of Default has occurred and
is continuing, or if in the opinion of such accounting firm an Event of Default
has occurred and is continuing, a statement as to the nature thereof (the
provision for such a statement herein shall in no way be construed as a consent
to the existence of such an event nor the granting of time to cure) and together
with the Management Letter (so called) of such firm and Borrower's written
response thereto detailing actions to be taken relating to matters discussed in
said Management Letter, and together with a completed Covenant Compliance
Certificate. In addition, Borrower shall provide all financial statements for
the Insurance Subsidiaries (as defined in the Note) required by the laws of any
jurisdiction in which the Insurance Subsidiary conducted business.


                                       11
<PAGE>   12
               (3) Such other data and information (financial and otherwise)
bearing upon or related to the Borrower's or ACSTAR Holdings, Inc. financial
condition, results of operations or assets, as Lender from time to time may
reasonably request.

          B. Projections/Budgets. As soon as available and in any event within
thirty (30) days prior to the end of each Fiscal Year of Borrower, financial
projections prepared by Borrower on a consolidated and consolidating basis for
the next Fiscal Year of Borrower, profit and loss statements projected for each
Fiscal Quarter and for the end of the next Fiscal Year.

     1.14 FINANCING STATEMENT AND SECURITY AGREEMENT.

          A. This Mortgage constitutes a security agreement and is intended to
be effective as a financing statement pursuant to the Connecticut Uniform
Commercial Code. Borrower hereby grants to Lender a security interest in the
Service Equipment, Leases, Property Income and other personal property included
in the Property, and all replacements thereof, substitutions therefor, additions
thereto and proceeds thereof, as well as the personal property described on
SCHEDULE D attached hereto and made a part hereof as security for the Mortgage
Debt. Lender is the secured party and Borrower is the debtor with respect to
this financing statement and the mailing addresses of the secured party and the
debtor for the purpose of this financing statement are set forth in SECTION 4.4
hereof. Upon request, Borrower shall execute and deliver to Lender any security
agreement, financing or continuation statement or other document Lender deems
necessary to protect or perfect its lien on the Service Equipment, and pay all
filing fees and other costs, disbursements, expenses and reasonable counsel fees
incurred by Lender in connection therewith. Borrower authorizes Lender, to the
extent permitted by applicable law, to sign and file any financing or
continuation statement at any time with respect to the Service Equipment in the
absence of any signature by or on behalf of Borrower.

          B. Borrower hereby warrants, represents and covenants as follows:
except for the security interest granted hereby, Borrower is, and as to the
portions of the Service Equipment to be acquired after the date hereof will be,
the sole owner of the Service Equipment free from any lien, security interest,
encumbrance or claim thereon of any kind whatsoever. Borrower will notify Lender
of, and will defend the Service Equipment against, all claims and demands of all
persons at any time claiming the Service Equipment or any interest therein;
Borrower will not assign, pledge, encumber, lease, sell, convey or in any manner
transfer the Service Equipment or portions thereof without the prior written
consent of Lender, except as otherwise permitted under the Loan Documents, and
all of the Service Equipment attached to, incorporated into or to be
incorporated into the Property will be kept free and clear of all chattel
mortgages, liens, conditional vendor's liens, encumbrances and security
interests, except as expressly waived in writing by Lender; the Service
Equipment is not and will not be used or acquired for personal, family or
household purposes; the Service Equipment will be kept on or at the Property,
and Borrower will not remove any portion or item of Service Equipment affixed or
attached to the Property without the prior written consent of Lender, except
such portions or items of Service


                                       12
<PAGE>   13
Equipment which are consumed or worn out in ordinary usage, and are promptly
replaced by Borrower with new items of equal or greater quality; and
notwithstanding any release of any or all of the Property which is deemed "real
property", any proceedings to foreclose this Mortgage or the release of this
Mortgage of record, the terms hereof shall survive as a security agreement with
respect to the security interest created hereby until the repayment or
satisfaction in full of the Mortgage Debt.

     1.15 REQUIRED NOTICES. Borrower shall notify Lender promptly of the
occurrence of any of the following: (i) an event requiring notice with respect
to the following matters under the following subsections of this Mortgage:

                  1.2.C.  (Loss or Damage to Property)
                  1.3.B.  (Taxes)
                  1.4.A.  (Condemnation)
                  1.5.B.  (Compliance with Law)
                  1.7.D.  (Recordation of Liens)
                  1.10.   (Removal of Improvements and Service Equipment)

(ii) receipt of notice from any governmental authority relating to the Property;
(iii) receipt of any notice from the holder of any other lien or security
interest in the Property; (iv) any modification or amendment to any loan
agreements to which Borrower is a party, including without limitation, any
agreements with BankBoston, N.A.; (v) any default under any indebtedness of
Borrower to any other party, including without limitation, BankBoston, N.A.; or
(v) commencement of any judicial or administrative proceedings by or against or
otherwise affecting Borrower, the Property or any entity controlled by or under
common control of Borrower, or any other action by any creditor as a result of
any default under the terms of any loan.

     1.16 OTHER DOCUMENTS. Borrower upon request shall deliver to Lender copies
or originals of all reports, licenses, permits, approvals, orders, contracts,
agreements, rights, options, franchises and applications relating to or
affecting the Property and all business operations conducted at or from the
Property.

     1.17 GENERAL REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants that as of the date of this Mortgage:

          A. Borrower is generally paying its debts as such debts become due,
the fair market value of its assets exceeds its liabilities and no bankruptcy or
insolvency proceedings are pending or contemplated by or against Borrower.

          B. All reports, statements and other data furnished by Borrower to
Lender in connection with the Loan are true, correct and complete in all
material respects and do not omit any fact or circumstance which would make the
statements contained therein misleading; present fairly the financial position
of Borrower as of the date stated therein, and the results of Borrower's


                                       13
<PAGE>   14
operation and changes in financial position for the years then ended and the
statements are prepared in conformity with generally accepted accounting
principles applied on a consistent basis; and that no material adverse change
has occurred in the financial condition of Borrower or the Property since the
date of said financial statement.

          C. The Property and all Improvements thereon have not suffered any
damage from fire or other casualty, no part of the Property has been condemned
or taken by eminent domain and no condemnation or other taking of the Property
or any part thereof is threatened or pending, or has been threatened with, any
other title proceedings.

          D. To Borrower's best knowledge, there does not now exist on, under or
within the Property (or any contiguous land included in the legal description of
the Property within three years prior to the date hereof) any Spill. To
Borrower's best knowledge, there does not now exist any condition, nor will the
current or proposed operations cause there to exist any condition upon the
Property or said contiguous land which would materially increase the possibility
of the occurrence of a Spill, or a material violation of the Act or any related
regulations or any similar federal laws or regulations.

          E. Borrower if a corporation, is a valid corporation in good standing
under the laws of the jurisdiction of incorporation and is authorized to do
business in the State of Connecticut, if a limited liability company, is a valid
limited liability company, legally existing under the laws of the jurisdiction
of its formation, and is authorized to do business in the State of Connecticut,
or if a limited partnership, is a valid limited partnership legally existing
under the laws of the jurisdiction of its formation and is authorized to do
business in the State of Connecticut.

          F. Borrower has the legal capacity and is authorized to execute and
deliver all Loan Documents; the Loan Documents are valid and binding obligations
enforceable in accordance with their respective terms, and the execution and
delivery thereof do not contravene any contract or agreement to which Borrower
is a party or by which Borrower or any of its respective properties may be
bound, and do not contravene any law, order, decree, rule or regulation to which
Borrower is subject.

          G. There is no action, suit or proceeding pending, or, to the
knowledge of Borrower, threatened against or materially affecting Borrower or
the Property or the business operations conducted at or from the Property or
which involve the possibility of any judgment or liability not fully covered by
insurance or which, in Borrower's opinion, might result in any adverse change in
the business, assets or operations of Borrower which would, in any way,
materially and adversely affect the Property or the validity or enforceability
of the Loan Documents.

          H. Borrower is not a party to or bound by any contract, agreement or
other instrument, or subject to any charter or other restriction or any
judgment, order, writ, injunction,


                                       14
<PAGE>   15
decree, rule or regulation which now or in the future may materially and
adversely affect the business, operations, properties, assets or condition,
financial or otherwise, of Borrower.

          I. Borrower has filed all required federal, state and local tax
returns, and no claims have been asserted and/or unpaid with respect to such
taxes.

          J. The Property has frontage on, and direct access for ingress and
egress to, the public street(s) appurtenant thereto.

          K. Electric, gas, sewer, septic, water facilities and any other
necessary utilities are or will be, available in sufficient capacity to service
the Property satisfactorily, and any easements necessary to the furnishing of
such utility service by Borrower have been or will be obtained and duly
recorded.

          L. Borrower is not in default under the terms of any instrument
evidencing or securing any indebtedness of Borrower and there has occurred no
event which would, if uncured or uncorrected, constitute a default under any
such instrument with the giving of notice, passage of time, or both.

          M. Borrower (and the undersigned representative of Borrower, if any)
has full power and authority to subject the Property to this Mortgage and to
execute and deliver the Note, this Mortgage, the Loan Documents and all other
documents and instruments required of it by Lender. No consent of any person or
entity and no consent, approval, or authorization is required by Borrower in
connection with the foregoing.

     1.18 PREJUDGMENT REMEDY WAIVER. Borrower hereby represents and agrees that
the transaction of which this Mortgage is a part is a commercial transaction as
defined by the statutes of the State of Connecticut. BORROWER HEREBY WAIVES ALL
RIGHTS TO NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER UNDER CONNECTICUT
GENERAL STATUTES SECTION 52-278a et seq., AS AMENDED, OR UNDER ANY OTHER STATE
OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES LENDER MAY
EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY, BORROWER
ACKNOWLEDGES THAT LENDER'S ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL
STATUTES SECTION 52-278f, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING
A COURT ORDER. BORROWER ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A
HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY LENDER'S
ATTORNEY, AND LENDER ACKNOWLEDGES BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO
THE ISSUANCE OF SAID WRIT. BORROWER FURTHER HEREBY WAIVES ANY REQUIREMENT OR
OBLIGATION OF LENDER TO POST A BOND OR OTHER SECURITY IN CONNECTION WITH ANY
PREJUDGMENT REMEDY OBTAINED BY LENDER BASED ON ANY OFFSETS, CLAIMS, DEFENSES OR


                                       15
<PAGE>   16
COUNTERCLAIMS OF BORROWER OR ANY OTHER OBLIGATED PARTY TO ANY ACTION BROUGHT BY
LENDER. BORROWER ALSO WAIVES ANY AND ALL OBJECTION WHICH IT MIGHT OTHERWISE
ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY LENDER OF ANY RIGHT OF
SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST UNDER STATUTE OR COMMON
LAW, AND TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL PRESENT AND FUTURE
VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY, REDEMPTION AND MORATORIUM
LAWS. BORROWER ACKNOWLEDGES AND AGREES THAT ALL OF THE WAIVERS CONTAINED IN THIS
SECTION HAVE BEEN MADE KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY,
AND WITH THE ADVICE OF ITS COUNSEL.

                                    ARTICLE 2
                                     DEFAULT

     2.1 EVENTS OF DEFAULT

          Any one or more of the following shall constitute an "EVENT OF
DEFAULT" hereunder:

          A. The failure to pay the Mortgage Debt in full by the "Maturity Date"
as defined in Schedule C hereto, or the failure to pay any other installment of
principal and/or interest or any other sums due with respect to the Mortgage
Debt when such installment is due and payable after ten (10) days prior written
notice and opportunity to cure, unless Lender believes such prior notice and
opportunity to cure will have a material adverse effect on its rights and
remedies.

          B. The occurrence of an Event of Default (as defined therein) under,
or demand for the payment of, any Loan Documents beyond any grace periods set
forth in said agreements, if any.

          C. The breach of any covenant or obligation of Borrower contained in
SECTIONS 1.2, 1.3, 1.7, 1.8, 1.9, or 3.4 hereof after ten (10) days prior
written notice and opportunity to cure, unless Lender believes such prior notice
and opportunity to cure will have a material adverse effect on its rights and
remedies.

          D. The actual or threatened waste, removal or demolition of, or
material alteration to, any part of the Property without Lender's prior written
consent.

          E. The failure to observe or perform any other agreements, covenants
or representations of Borrower contained in this Mortgage for a period of thirty
(30) days after the occurrence of such failure.


                                       16
<PAGE>   17
          F. The occurrence of a default under, or demand for the payment of,
any other note or obligation of Borrower to any other party, including without
limitation, BankBoston, N.A., beyond any applicable grace or cure periods.

          G. The cancellation, revocation, suspension or failure to receive a
grant or renewal of any and all franchises, concessions, licenses and permits
pertaining to or necessary for the construction and operation of the
Improvements on the Property.

          H. The taking of all or any part of the Property through condemnation,
or if the value of the Property shall be impaired by condemnation or casualty,
either temporarily for a period in excess of thirty (30) days, or permanently.

          I. If Borrower shall be deprived of title, possession or control of
the Property by process or operation of law or order of any court, or if any
foreclosure proceeding shall be instituted with regard to any lien or mortgage
of any kind affecting the Property.

                                    ARTICLE 3
                                    REMEDIES

     Whenever an Event of Default shall have occurred, Lender may take any one
or more of the following remedial steps:

     3.1 ACCELERATION. Lender may declare, without demand or notice to Borrower,
the outstanding principal amount of the Loan and the interest accrued thereon,
and the Mortgage Debt, to be due and payable immediately, and upon such
declaration such principal and interest and other sums shall immediately become,
and be, due and payable.

     3.2 FORECLOSURE. Lender may foreclose this Mortgage and exercise its rights
as a secured party for all or any portion of the Mortgage Debt which is then due
and payable, subject to the continuing lien of this Mortgage for the balance not
then due and payable. If this Mortgage is foreclosed there shall be included in
the Mortgage Debt, to the extent permitted by law, the costs, disbursements, and
fees paid or incurred by Lender in connection with such foreclosure.

     3.3 POSSESSION OF PROPERTY; APPOINTMENT OF RECEIVER.

          A. Without notice to Borrower, and without regard to the adequacy of
the security for the Mortgage Debt, proof of depreciation of the value of the
Property or the financial condition of Borrower, Lender may, at its option: by
itself or by agent, with or without bringing any action, suit or proceeding,
immediately enter upon and take possession and control of the Property and the
Property Income with those rights and powers more particularly set forth in
SUBSECTION 3.3 C. hereof; make application to a court of competent jurisdiction
for and obtain the immediate ex parte appointment of a receiver authorized to
immediately enter upon and take possession and control of the Property and the
Property Income with those rights and powers more


                                       17
<PAGE>   18
particularly set forth in SUBSECTION 3.3 C. hereof; without taking possession
and control of the Property, collect directly all Property Income due to
Borrower with full rights and powers to notify all parties liable to make
payments of Property Income to make said payments directly to Lender or its
agents, and Lender or its agents shall have the further power and authority to
sue for or otherwise collect and receive all Property Income; or (iv) exercise
any or all of the remedies available to a secured party under the Uniform
Commercial Code, including, without limitation:

               (1) Either personally or by means of a court appointed receiver,
taking possession of all or any of the Service Equipment and thereafter holding,
storing, using, operating, maintaining and controlling the Service Equipment,
and exercising all rights and powers of Borrower in respect thereof. If Lender
demands or attempts to take possession of the Service Equipment, Borrower shall
promptly to turn over and deliver complete possession thereof to Lender;

               (2) Without notice to or demand upon Borrower, making such
payments and doing such acts as Lender may deem necessary to protect its
security interest in the Service Equipment;

               (3) Requiring Borrower to assemble the Service Equipment, or any
portion thereof, and make it available to Lender at a place designated by Lender
and reasonably convenient to both parties. Lender and its agents and
representatives shall have the right to enter upon any or all of Borrower's
property to exercise Lender's rights hereunder; and

               (4) Selling, leasing or otherwise disposing of the Service
Equipment at public sale, with or without having the Service Equipment at the
place of sale, and upon such terms and in such manner as Lender may determine.
Lender may be a purchaser at any such sale. Borrower agrees that sales for cash
or on credit to a wholesaler, retailer, or user of property of the type of the
Service Equipment, or at public or private auction, are all commercially
reasonable. Notwithstanding any other notice provision in this Mortgage or the
Loan Documents, unless the Service Equipment is perishable or threatens to
decline speedily in value, or is of a type customarily sold on a recognized
market, Lender shall give Borrower reasonable notice of the time and place of
any public sale thereof, or of the time after which any private sale or any
other intended disposition thereof is to be made. The requirements of reasonable
notice shall be met if such notice is mailed to Borrower as provided in SECTION
4.4 hereof, at least five (5) days before the time of the sale or other
disposition.

          B. Borrower hereby waives to the fullest extent permitted by law all
rights to prior notice or court hearing in connection with any action by Lender
of the types set forth in SUBSECTIONS 3.3 A.(1), (2), and (3) above, and
Borrower further waives any requirement that Lender provide any bond, surety, or
other security in connection with any said action.

          C. If Lender, Lender's agent and/or a receiver enters upon and takes
possession and control of the Property and/or the Property Income pursuant to
SUBSECTIONS 3.3 A.(1), (2)


                                       18
<PAGE>   19
and/or (3), such person or entity shall have all of Borrower's rights and powers
with respect to the Property and/or the Property Income in addition to such
other rights and powers as may subsequently be authorized including without
limitation the right and power to: hold, store, use, operate, manage and control
the Property and conduct the business which is or may be conducted therefrom;
make all necessary and proper maintenance, repairs, renewals, replacements,
additions, betterments and improvements to the Property and purchase or
otherwise acquire additional fixtures, personalty and other property; obtain
such insurance with respect to the Property and the business operations
conducted therefrom as may be determined necessary; manage and operate the
Property and the business conducted therefrom and exercise all the rights and
powers of Borrower in its name or otherwise with respect to the same; enter into
agreements with others to exercise the powers herein granted, all as Lender, its
agents or a receiver from time to time may determine; collect and receive all
Property Income; enforce all terms of existing Leases at the Property and all
other contracts or agreements pertaining to the Property or the business
operations conducted therefrom; and enter into such new or additional leases and
such other contracts or agreements pertaining to the Property or the business
operations conducted at or from the Property from time to time as Lender, its
agents or the receiver may determine necessary in its sole discretion.

          D. All Property Income collected by Lender, Lender's agent or a
receiver pursuant to SUBSECTIONS 3.3 A.(1), (2) or (3) above, shall be applied
to the following in such order of priority as Lender may determine in its sole
discretion: (i) interest and principal due on the Mortgage Debt; (ii) taxes,
assessments and insurance premiums due with respect to the Property and/or the
business operations conducted from the Property; (iii) all costs and expenses of
constructing the Improvements, operating, maintaining, repairing and improving
the Property and conducting the business operations which are or may be
conducted at the Property; and (iv) the compensation, salaries, expenses and
disbursements of any agents, employees, attorneys or other representatives of
Lender, Lender's agent or the receiver in connection with the possession,
control, construction of the Improvements and/or operation of the Property and
the business operations conducted therefrom, expressly including the payment of
any management agent's fees, and in the event Lender manages the Property itself
with its own employees, Lender shall be entitled to charge and collect a
management fee equal to the customary management agent's fee charged for
performing similar management functions in the area where the Property is
located.

          E. Lender, its agents, or any receiver acting pursuant to SUBSECTIONS
3.3 A.(1), (2) or (3) hereof shall in no event be liable or accountable for more
monies than actually are received from the Property during the period during
which Lender, its agent or any receiver actually is in possession and control of
the Property. Neither Lender, its agents nor any receiver shall be liable or
accountable in any manner for the failure to collect Property Income for any
reason whatsoever.

          F. All costs, expenses and liabilities of every character incurred by
Lender in managing, operating and maintaining the Property, not paid from
Property Income as hereinabove provided, shall constitute and be treated as
Lender Advances pursuant to SECTION 3.4 hereof.


                                       19
<PAGE>   20
          G. Borrower shall pay monthly, in advance, to Lender, its agent or any
receiver in possession and control of the Property pursuant to SUBSECTIONS 3.3
A.(1), (2) or (3) above, the fair and reasonable rental value for all or any
part of the Property which is in the use, occupancy and possession of Borrower.

          H. In the event of foreclosure, Lender, its agent or any receiver
acting pursuant to SUBSECTIONS 3.3 A.(1), (2) or (3) above, may remain in
possession of the Property until (i) the foreclosure sale; (ii) the redemption
of the Property; or (iii) the expiration of any redemption period of the United
States of America extending subsequent to the foreclosure sale, if a deficiency
exists. Lender, its agents or the receiver shall incur no liability for, nor
shall Borrower assert any claim or setoff as a result of, any action taken while
Lender, its agent or a receiver is in possession of the Property.

     3.4 LENDER ADVANCES

          A. Lender may, without notice or demand, pay any amount which Borrower
has failed to pay, or perform any act which Borrower has failed to perform
hereunder, including, without limitation, (i) the payment of insurance premiums
and/or the furnishing of insurance required under SECTION 1.2 hereof; (ii) the
payment of Taxes required under SECTION 1.3 hereof; (iii) the performance of and
the payment for repairs and replacements required under SECTION 1.6. hereof;
(iv) the cost of discharging any liens or encumbrances under SUBSECTION 1.7.D.
hereof; (v) all expenses incurred or other amounts paid by Lender pursuant to
SECTION 1.11 and 1.14 and ARTICLE 3 hereof; (vi) the payment of costs attendant
to Lender's possession as set forth in SUBSECTION 3.3.F. hereof; and (vii) the
payment of sums for all purposes for which Loan Advances are otherwise allowed
under the Note. The costs, disbursements, expenses and reasonable counsel fees
incurred by Lender in connection with the foregoing, together with interest
thereon from the date the expense is paid or incurred at the highest interest
rate allowed under the Note ("LENDER ADVANCES"), shall be (x) added to the
Mortgage Debt, (y) payable on demand to Lender, and (z) secured by the lien of
this Mortgage, prior to any right, title, interest, lien or claim attaching or
accruing to the Property subsequent to the lien hereof.

          B. Lender, in making any Lender Advances which relate to Taxes
asserted against the Property, may do so according to any bill, statement or
estimate procured from the appropriate public office without inquiry into the
accuracy or validity thereof; insurance premiums, may do so according to any
notice, bill, statement or estimate procured from the appropriate insurer
without inquiry into the accuracy or validity thereof; any apparent or
threatened adverse title, lien or encumbrance, shall be the sole judge of the
legality or validity of same; the expense of repairs or replacement of any
Property, shall be the sole judge of the state of repairs and the necessity for
incurring the expense of any such repairs or replacement; any other purpose
referred to in SUBSECTION 3.4.A. above, may do so whenever, in its sole judgment
and discretion, such payment shall seem necessary or desirable to protect the
full security intended to be created by this Mortgage.


                                       20
<PAGE>   21
     3.5 NO MARSHALLING. Lender shall not be compelled to release, or be
prevented from foreclosing or enforcing this Mortgage upon all or any part of
the Property, unless the entire Mortgage Debt shall be paid; required to accept
any part or parts of the Property, as distinguished from the entire whole
thereof, as payment of or upon the Mortgage Debt to the extent of the value of
such part or parts; compelled to accept or allow any apportionment of the
Mortgage Debt to or among any separate parts of the Property; or prevented from
selling the Property in one or more parcels or as an entirety, and in such
manner and order, as Lender in its sole discretion may elect.

     3.6 LENDER'S DISCRETION. Lender, in exercising any remedy provided herein
under which it may make payments or perform actions which Borrower has failed to
do or make, may do so in its sole discretion whenever in its opinion such
payment or performance is necessary or desirable to protect the full security
intended by this Mortgage.

     3.7 REMEDIES CUMULATIVE. No remedy herein conferred upon or reserved to
Lender is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Mortgage or now or hereafter existing at law
or in equity.

     3.8 DELAY OR OMISSION NO WAIVER. No delay or omission on the part of Lender
to exercise any of its rights hereunder or under any of the Loan Documents shall
impair or operate as a waiver of Lender's right to exercise such right or any
other right of Lender hereunder or under the Loan Documents. In order to entitle
Lender to exercise any remedy reserved to it in this Mortgage, it shall not be
necessary to give any notice, other than such notice as may be herein expressly
required. Any waiver, express or implied, of any breach or default hereunder
shall not constitute a waiver of any subsequent or different breach or default.

     3.9 POWER OF ATTORNEY. Borrower hereby irrevocably appoints, grants and
constitutes Lender its attorney-in-fact, coupled with an interest, to so
execute, deliver and submit all applications, requests, forms or reports of any
kind for all applicable, desirable or necessary licenses, permits, approvals,
authorization, tax credits or abatements or benefits, of any kind relating,
applicable to or affecting the use and enjoyment of, or construction on, or the
business operations conducted at or from the Property; provided, the foregoing
power of attorney shall be exercisable by Lender only after the occurrence of
one or more Events of Default. Any party dealing with Lender shall not be
required to investigate the right of Lender to exercise its authority or to take
any action under or pursuant to this power of attorney nor inquire as to whether
or not any Event of Default exists or has occurred.

     3.10 NO MERGER. If Lender shall acquire title to the Property by conveyance
from Borrower or as a result of the foreclosure of any other mortgage which
Lender at any time holds with respect to the Property, this Mortgage shall not
merge in the fee of the Property but shall


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remain and continue as an existing and enforceable lien for the Mortgage Debt
secured hereby until the same shall be released of record by Lender in writing.

                                    ARTICLE 4
                            MISCELLANEOUS PROVISIONS

     4.1 GOVERNING LAW; BINDING EFFECT. The rights and duties of Borrower and
Lender under this Mortgage shall be governed by the internal laws of the State
of Connecticut. All covenants, conditions and agreements herein shall run with
the land, and shall bind the heirs, executors, administrators, successors and
assigns of Borrower, and shall inure to the benefit of Lender and its successors
and assigns.

     4.2 MODIFICATIONS, ETC. No provision of this Mortgage may be waived,
modified or discharged, including, without limitation, by conduct, custom or
course of dealing, other than by an express writing signed by the party against
whom enforcement of such waiver, modification or discharge is sought.

     4.3 NOTICE. Any notice, report, demand or other written instrument required
under SECTION 1.15 hereof, or otherwise permitted or required to be given, made,
or sent under this Mortgage, shall be in writing, signed by the party giving or
making the same, and shall be sent hand-delivered, effective upon receipt, sent
by United States Express Mail or by overnight courier, effective upon receipt,
or sent by certified mail, postage prepaid, return receipt requested, deemed
effective on the earlier of the day of actual delivery as shown by the
addressee's return receipt or the expiration of three (3) business days after
the date of mailing, addressed to the party intended to receive the same at the
address set forth below:

If to Lender:                                with a copy to:
Webster Bank                                 Pepe & Hazard LLP
150 Main Street                              Goodwin Square
Bristol, CT 06010                            Hartford, CT 06103
Attn: Peter F. Samson                        Attn:  John C. Bombara, Esq.

If to Borrower:
ACMAT Corporation
233 Main Street
New Britain, CT 06050-2350
Attn: Henry W. Nozko, Jr.

Any party hereto shall have the right to change the place to which any such
notice shall be sent by a similar notice sent in like manner to all parties
hereto.

     4.4 NO AGENCY OR JOINT VENTURE. Nothing contained in this Mortgage shall be
construed to cause Borrower to become the agent for, or a joint venturer with,
Lender for any


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<PAGE>   23
purpose whatsoever, nor shall Lender be responsible for any shortage,
discrepancy, damage, loss or destruction of any part of the Property for
whatever cause unless same is the direct result of the gross negligence of
Lender. Whether or not Lender elects to employ any or all remedies available to
it upon demand or after the occurrence of an Event of Default under the Loan
Documents, Lender shall not be liable for the payment of any expense incurred in
connection with the exercise of any remedy available to Lender or for the
performance or nonperformance of any other obligation of Borrower.

     4.5 SEVERANCE. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or sections contained in this Mortgage shall not
affect the validity or enforceability of the remaining portions of this
Mortgage, or any part thereof.

     4.6 INTERPRETATION. In this Mortgage, unless the context otherwise
requires, (i) the term "Borrower" shall mean and include any guarantor of all or
any part of the Mortgage Debt or any other person directly or indirectly
responsible for the payment of all or any part of the Mortgage Debt; and (ii)
the use of any gender shall include the other genders and either the singular or
the plural shall include the other. This Mortgage shall be interpreted without
regard to any presumption or other rule requiring construction against the party
which drafted this Mortgage.

     4.7 CAPITALIZED TERMS. Any capitalized words used in this Mortgage and not
herein defined shall have the meanings ascribed to such terms in the Loan
Documents.

     NOW, THEREFORE, if all agreements and provisions contained herein are fully
kept and performed by Borrower, and all the Mortgage Debt shall be fully paid in
all respects, then this deed shall be void; otherwise to remain in full force
and effect.

     IN WITNESS WHEREOF, Borrower has caused this instrument to be executed and
delivered as of the date first above written.

Signed, sealed and delivered                       BORROWER:
in the presence of:                                ACMAT CORPORATION

/s/ John C. Bombara                                By: /s/ Henry W. Nozko, Jr.
--------------------------                             -------------------------
    John C. Bombara                                    Name: Henry W. Nozko, Jr.
                                                       Executive Vice President
/s/ Peter F. Samson
--------------------------
Peter F. Samson

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<PAGE>   24
STATE OF CONNECTICUT             )
                                 ) ss.: Hartford
COUNTY OF HARTFORD               )

     On this 23rd day of December, 1998, before me, the undersigned officer,
personally appeared Henry W. Nozko, Jr., Executive Vice President of ACMAT
Corporation signer and sealer of the foregoing instrument and acknowledged the
same to be his free act and deed and the free act and deed of said corporation.

                                              /s/ John C. Bombara
                                              ----------------------------------
                                              Commissioner of the Superior Court
                                              Notary Public John C. Bombara
                                                            --------------------
                                              My Commission Expires: -----------


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