EXHIBIT 10.1


The address of the
mortgaged property is:
195-201 South Street,
50 Utica Street
207-209 South Street
162-168 Kneeland Street.,
all in Boston, MA



                   MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT


         THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT is granted this 10th
day of January, 2001 to WAINWRIGHT BANK & TRUST COMPANY (hereinafter called the
"Mortgagee") with its principal office at 63 Franklin Street, Boston, MA 02110
by ZOOM TELEPHONICS, INC., a Delaware corporation, having a principal place of
business and chief executive office at 207 South Street, Boston, MA 02111,
(hereinafter called the "Mortgagor") in consideration of the mutual covenants
contained herein and benefits derived herefrom, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Mortgagor agrees to the following terms and conditions:

ARTICLE I - GRANT OF MORTGAGE INTEREST

         1-1. Mortgage Interest. To secure the Mortgagor's prompt, punctual, and
faithful payment and performance of all and each of the Mortgagor's present and
future Liabilities (as that term is defined in Section 3-1 herein) to the
Mortgagee including, without limitation, those arising under that certain
Commercial Real Estate Promissory Note in the original principal amounts of Six
Million Five Hundred Thousand and No/100ths ($6,500,000.00) Dollars dated as of
even date herewith from the Mortgagor to the Mortgagee (said Note together with
any and all extensions, renewals, substitutions, modifications or replacements
thereof are hereinafter called the "Note"), the Mortgagor hereby grants,
mortgages, assigns, and transfers to the Mortgagee with MORTGAGE COVENANTS, the
Collateral (as that term is defined in Section 3-3 herein). The Mortgagor
intends to convey and does hereby grant and convey to the Mortgagee with
MORTGAGE COVENANTS (to be included within the Collateral), the premises and
buildings and improvements in Boston , Suffolk County, Massachusetts known
as195-201 South Street, 50 Utica Street, 207-209 South Street and 162-168
Kneeland Street, as more particularly described Exhibit A annexed hereto and
made a part hereof and further described herein.

         1-2.     Construction Mortgage.  Intentionally deleted.
                  ---------------------

ARTICLE 2 - GRANT OF SECURITY INTEREST AND ASSIGNMENT

         2-1. Security Interest. To secure the Mortgagor's prompt, punctual, and
faithful payment and performance of all and each of the present and future
Liabilities to the Mortgagee, including, without limitation, those arising under
the Note, the Mortgagor hereby grants to the Mortgagee a continuing security
interest in and to, and assigns to the Mortgagee, the Collateral (as that term
is defined in Section 3-3 herein).

         2-2. Financing Statement. This Agreement is intended to take effect as
a security agreement and is to be recorded in the Suffolk Registry of Deeds and
filed with Suffolk Registry District of the Land Court in lieu of a financing
statement pursuant to the Massachusetts General Laws Chapter 106 (hereinafter,
the "UCC"), Section 9-402.

         2-3. Power of Attorney. The Mortgagor hereby irrevocably constitutes
and appoints the Mortgagee as the Mortgagor's true and lawful attorney for the
purpose of signing and filing or recording on behalf of the Mortgagor any
financing or other statement in order to establish, perfect or protect the
Mortgagee's interest in the Collateral.

ARTICLE 3 - CERTAIN DEFINITIONS

         As used herein, the following terms shall have the following meanings:

         3-1. Liabilities. "Liabilities" includes, without limitation, the Note
and that certain Loan Agreement by and between Mortgagor and Mortgagee dated as
of even date herewith (the "Loan Agreement"). "Liabilities" also includes,
without limitation, any and all liabilities, debts, and obligations of the
Mortgagor to the Mortgagee, now or hereafter, each of every kind, nature and
description. "Liabilities" also includes, without limitation, each obligation to
repay all loans, advances, indebtedness, notes, obligations, and amounts now or
hereafter at any time owing by the Mortgagor to the Mortgagee (including all
future advances or the like whether or not given pursuant to a commitment by the
Mortgagee), whether or not any of such are liquidated, unliquidated, secured,
unsecured, direct, indirect, absolute, contingent, or of any other type, nature,
or description, or by reason of any cause of action which the Mortgagee now or
hereafter may hold against the Mortgagor. "Liabilities" also includes, without
limitation, all notes and other obligations of the Mortgagor now or hereafter
assigned to or held by the Mortgagee, each of every kind, nature, and
description. "Liabilities" also includes, without limitation, all interest and
other amounts which may be charged to the Mortgagor and/or which may be due from
the Mortgagor to the Mortgagee from time to time and all costs and expenses now
or hereafter incurred or paid by the Mortgagee in respect of this and any other
agreement between the Mortgagor and the Mortgagee or instrument furnished by the
Mortgagor to the Mortgagee (including, without limitation, Costs of Collection,
attorneys' reasonable fees, and all court and litigation costs and expenses).
"Liabilities" also includes, without limitation, any and all obligations of the
Mortgagor to act or to refrain from acting in accordance with the terms,
provisions, and covenants of the within Agreement and of any other agreement
between the Mortgagor and the Mortgagee or instrument now or hereafter furnished
by the Mortgagor to the Mortgagee. As used herein, the term "indirect" includes,
without limitation, all obligations and liabilities which the Mortgagee may now
or hereafter incur or become liable for on account of or as a result of any
transactions between the Mortgagee and the Mortgagor including, without
limitation, any which might arise out of any Letter of Credit or similar
instrument issued by the Mortgagee for the account of the Mortgagor and any
which might arise out of any action brought or threatened against the Mortgagee,
any guarantor or endorser of the Liabilities of the Mortgagor or any other
person in connection with the Liabilities. The term "indirect" also refers to
any direct or contingent liability of the Mortgagor to make payment towards any
obligation now or hereafter held by the Mortgagee (including, without
limitation, on account of any industrial revenue bond) to the extent so held by
the Mortgagee. The Mortgagee's books and records shall be prima facie evidence
of the Mortgagor's indebtedness to the Mortgagee. In the event the Mortgagor is
a partnership or includes more than one individual or entity, the term
"Liabilities", as used herein, shall also mean and refer to the Liabilities of
any one of the general partners thereof, or any one of the individuals or
entities comprising the Mortgagor or the joint Liabilities of any combination of
or all of such general partners or such individuals or entities. Liabilities
also include the obligations of Mortgagor under the Additional Collateral
Documents.

         3-2. Costs of Collection. "Costs of Collection" includes, without
limitation, all attorneys' fees, and all out-of-pocket expenses incurred by the
Mortgagee's attorneys, and all costs incurred by the Mortgagee in the
administration of the Liabilities, this Agreement, and all other documents,
instruments, and agreements executed in connection with or relating to the
Liabilities, including without limitation costs and expenses associated with
travel on behalf of the Mortgagee. "Costs of Collection" also includes, without
limitation, all attorneys' reasonable fees, out of pocket expenses incurred by
the Mortgagee's attorneys, and all costs incurred by the Mortgagee, including,
without limitation, costs and expenses associated with travel on behalf of the
Mortgagee, which costs and expenses are directly or indirectly related to or in
respect of the Mortgagee's efforts to collect or enforce any of the Liabilities
and/or to exercise or enforce any of the Mortgagee's rights, remedies, or powers
against or in respect of the Mortgagor and/or any other guarantor or person
liable in respect of the Liabilities (whether or not suit is instituted in
connection with such efforts). The Costs of Collection shall be added to the
Liabilities of the Mortgagor to the Mortgagee, as if such had been lent,
advanced, and credited by the Mortgagee to, or for the benefit of, the
Mortgagor, and shall accrue interest at the highest rate of interest charged
relative to any of the Liabilities.

         3-3. Collateral. "Collateral" shall include all and each of the
following, whether singly or collectively, whether real property, personal
property, or a combination thereof, whether now owned or now due or now
existing, or in which the Mortgagor has an interest, or hereafter, at any time
in the future, acquired, arising, or to become due, or in which the Mortgagor
obtains an interest, and all proceeds, products, substitutions and accessions of
or to any of the following:

                      (a) the parcels of land with buildings and improvements
         whether now existing or hereafter constructed or located thereon,
         situated in Boston, Suffolk County, Massachusetts, known as 195-201
         South Street, 50 Utica Street, 207-209 South Street and 162-168
         Kneeland Street, Boston, Massachusetts as more particularly described
         on Exhibit A annexed hereto;

                      (b) all easements,  covenants,  agreements and rights
         which are appurtenant to or benefit the Mortgaged Premises;

                      (c) all furnaces, ranges, heaters, plumbing goods, gas and
         electric fixtures, screens, screen doors, mantels, shades, storm doors
         and windows, awnings, oil burners and tanks or other equipment, gas or
         electric refrigerators and refrigerating systems, ventilating and air
         conditioning apparatus and equipment, door bell and alarm systems,
         sprinkler and fire extinguishing systems, portable or sectional
         buildings, and all other fixtures of whatever kind or nature owned by
         the Mortgagor, now or in the future contained in or on the Mortgaged
         Premises, and any and all similar fixtures hereinafter installed in the
         Mortgaged Premises in any manner which renders such articles usable in
         connection therewith;

                      (d) all machinery, equipment, furniture, building
         supplies, and appliances, owned by the Mortgagor, used or useful in the
         construction, operation, maintenance, or occupation of the building(s)
         located on the Mortgaged Premises or any portion or unit thereof;

                      (e) all leases, contracts or agreements entered into, for
         the lease, rental, hire or use by the Mortgagor of any property of the
         same nature as the foregoing Subparagraphs (c) and (d) in connection
         with the construction, operation, maintenance or occupation of the
         Mortgaged Premises;

                      (f) all leases, tenancies, and occupancies, whether
         written or not, regarding all or any portion of the foregoing (a
         through e (hereinafter, the "Leases")), all guarantees and security
         relating thereto, together with all income and profit arising therefrom
         or from any of the foregoing Subparagraphs (a) through (e), and all
         payments due or to become due thereunder (hereinafter, the "Rental
         Payments"), including, without limitation, all rent, additional rent,
         damages, insurance payments, taxes, insurance proceeds, condemnation
         awards, or any payments with respect to options contained therein
         (including any purchase option);

                      (g) all contracts and agreements (together with the
         easements, covenants, agreements and rights referred to in Section
         3-3(b), 3-3(c) and 3-3(d)above, and the leases, contracts, and
         agreements referred to in Section 3-3(f), above, hereinafter, the
         "Contracts") licenses, permits and approvals relating to the Mortgaged
         Premises (hereinafter, the "Licenses") and warranties and
         representations, relative to the use, operation, management,
         construction, repair or service of any of the foregoing Subparagraphs
         (a) through (f);

                      (h)       Intentionally deleted.

                      (i)       any other property of the Mortgagor in which
         the Mortgagee may in the future be granted an interest;

                      (j)       all funds held by the Mortgagee as tax or
         insurance escrow payments;

                      (k) all proceeds received from the sale, exchange,
         collection or other disposition of any of the foregoing Subparagraphs
         (a) through (j), including, without limitation, equipment, inventory,
         goods, documents, securities, accounts, chattel paper, and general
         intangibles (as each of those terms is defined in the UCC); all
         insurance proceeds relating to all or any portion of the foregoing
         Subparagraphs (a) through (j); and all awards, damages, proceeds, or
         refunds from any state, local, federal or other takings of, and all
         municipal tax abatements relating to, all or any portion of the
         foregoing Subparagraphs (a) through (j); and

                      (l)       All rights, remedies, representations,
         warranties, and privileges pertaining to any of the foregoing
         Subparagraphs (a) through (k).

         3-4.     Mortgaged Premises.  "Mortgaged Premises" shall mean and
         refer to that portion of the Collateral described in Sections 3-3(a)
         and 3-3(b) herein.

         3-5.     Personal Property.  "Personal Property" shall mean and
         refer to all of the Collateral other than that portion of the
         Collateral which is included within the definition of Mortgaged
         Premises.

         3-6.     Receivables Collateral.  "Receivables Collateral" shall mean
         and refer to all Rental  Payments and all rights to payment now held,
         or in which the Mortgagor has an interest or hereafter acquired by the
         Mortgagor, or in which the Mortgagor obtains an interest,  arising out
         of, constituting a part of, or relating to all or a portion of the
         Collateral.

         3.7.     Assigned Rights.  Intentionally deleted.


         3.8. Additional Collateral Documents. "Additional Collateral Documents"
     shall mean each of the  following  documents,  each of which is dated as of
     even  date  herewith  together  with  any  and  all  extensions,  renewals,
     substitutions,  modifications and replacements  thereof:  (a) Assignment of
     Leases and Rents, (b) Indemnity Agreement  Regarding  Hazardous  Materials,
     (c) Affidavit of Borrower, (d) Loan Agreement, (e) Compliance Agreement (f)
     Loan  Agreement,  and (g) any other  security  instruments,  documents  and
     agreements executed and delivered in connection with the Liabilities.


ARTICLE 4 - REPRESENTATIONS, WARRANTIES AND COVENANTS

         4-1. Existence and Authority. The Mortgagor is a duly formed and
validly existing Delaware corporation, duly qualified to conduct business in the
Commonwealth of Massachusetts, which is and shall hereafter remain, in full
force and effect and in good standing as a Delaware corporation, and as a
Delaware corporation qualified to do business in Massachusetts. The execution
and delivery of this Agreement by the undersigned and of any other instruments
executed and delivered in connection herewith, constitute representations by the
Mortgagor and the individual(s) signing this Agreement and said instruments that
the undersigned have full authority to execute and deliver this Mortgage under
the incorporation papers of the Mortgagor and all such corporate authority, as
may be necessary to permit such execution and delivery to, and that it does,
bind the Mortgagor.

         4-2. Insurance. The Mortgagor hereby covenants and agrees to maintain
public liability insurance, flood hazard insurance, all risk insurance
(including twelve (12) months loss of rents and revenues coverage), and such
other insurance against such casualties or contingencies as may be required by
the Mortgagee in sums, forms and in companies reasonably satisfactory to the
Mortgagee; provided, the property insurance on the Collateral shall be for no
less than 100% of full replacement value thereof (meeting all co-insurance
requirements). All policies shall contain a provision requiring at least thirty
(30) days advance notice to the Mortgagee before any cancellation or
modification. All insurance on the Collateral shall be for the benefit of and
deposited with the Mortgagee, shall be first payable to the Mortgagee, and shall
include such endorsement in favor of the Mortgagee as the Mortgagee may specify.
The endorsement shall provide that the insurance, to the extent of the
Mortgagee's interest therein, shall not be impaired or invalidated, in whole or
in part, by reason of any act or neglect of the Mortgagor, or failure by the
Mortgagor to comply with any warranty or condition of the policies. The
Mortgagor shall advise the Mortgagee of each claim made by the Mortgagor under
any policy of insurance which covers all or any portion of the Collateral and,
at the Mortgagee's option in each instance, will permit the Mortgagee, to the
exclusion of the Mortgagor, to conduct the adjustment of each such claim. The
Mortgagor hereby appoints the Mortgagee as the Mortgagor's attorney in fact to
obtain, adjust, settle, and cancel any insurance described in this section and
to endorse in favor of the Mortgagee any and all drafts and other instruments
with respect to such insurance. The within appointment, being coupled with an
interest, is irrevocable until this Agreement is terminated by a written
instrument executed by a duly authorized officer of the Mortgagee. The Mortgagee
shall not be liable for any loss sustained on account of any exercise pursuant
to said power unless such loss is caused by the willful misconduct and actual
bad faith of the Mortgagee. The Mortgagee may, at its option, make any proceeds
available to the Mortgagor to repair or reconstruct the Collateral (subject to
such construction loan the disbursement procedures and conditions as the Bank
may require, in its sole discretion) or apply any proceeds of such insurance
against the Liabilities, whether or not such have matured, in accordance with
Section 10-6 herein.

         4-3. Statutory Compliance. The Mortgagor shall comply with, shall not
use any of the Collateral in violation of, and shall cause the Collateral to be
in compliance with, each and every License, statute, regulation, ordinance,
decision, directive, order, by-law, or rule of any federal, state, municipal,
and other governmental authority which has or claims jurisdiction over the
Mortgagor or any of the Collateral. The Mortgagor has obtained, and will
maintain in full force and effect, the Licenses and all licenses, permits and
approvals necessary for the use, maintenance, construction and operation of the
Collateral, and at the option of the Mortgagee, will do all things and execute
all such documents as the Mortgagee may reasonably request to assign the
Mortgagor's rights therein to the Mortgagee.

        4-4. Title to Collateral. The Mortgagor is, and shall hereafter remain,
     the owner of the Collateral  free and clear of all voluntary or involuntary
liens, encumbrances,  attachments,  security interests,  purchase money security
interests, assignments, mortgages, charges or other liens or encumbrances of any
nature whatsoever, with the exceptions of (a) the mortgage and security interest
created  herein (b) liens for real estate  taxes not yet due and payable and (c)
encumbrances  listed on the policy of title  insurance  issued by First American
Title  Insurance  Company dated as of even date herewith and  identified as MMDD
No. 00-32016.

        4-5. Condition of Collateral. The Collateral is, and shall hereafter
remain, in good repair, well maintained and in good working order. The Mortgagor
shall make all necessary repairs, replacements, additions and improvements to
maintain the Collateral in good order and condition. The Mortgagor shall not
cause or permit to be suffered any waste, destruction or loss (whether or not
such loss is insured against) to the Collateral or any part thereof, or use any
of the Collateral in violation of any applicable statute, regulation, ordinance,
decision, directive, order, by-law, or rule, or any policy of insurance thereon.

        4-6. Inspection of Collateral. From time to time as the Mortgagee and
the Mortgagee's representatives may reasonably request by telephonic notice to
the Mortgagor, the Mortgagor shall accord the Mortgagee and such representatives
access, during regular business hours, to the Collateral and all books and
records relating to the use, operation, construction, or management thereof, and
in connection with such access, will permit the Mortgagee and such
representatives to inspect the Collateral, verify any information contained
therein or relating thereto, and verify the Mortgagor's compliance with the
provisions of this Agreement or of any other agreement between the Mortgagor and
the Mortgagee and any instrument to be furnished by the Mortgagor to the
Mortgagee.

        4-7. Taxes and other Costs. To the extent payment is not provided for
in Section 4-9 herein, the Mortgagor shall pay when due all real and personal
property taxes, assessments, charges, franchises, income, unemployment, old age
benefits, withholding, sales, and other taxes assessed against it, condominium
assessments, if any, and all insurance premiums relative to the Collateral. The
Mortgagor shall deliver to the Mortgagee, upon request of Mortgagee, evidence of
the payment by the Mortgagor of all such items. The Mortgagor agrees that the
Mortgagee, upon written notice to Mortgagor, may, at its option, and from time
to time, pay any taxes, condominium assessments, if any, or insurance premiums,
the payment of which is then due, discharge any liens or encumbrances on any of
the Collateral, or take any other action that the Mortgagee may deem proper to
repair, insure, maintain, or preserve any of the Collateral or the Mortgagee's
rights therein. The Mortgagor will pay to the Mortgagee on demand all amounts so
paid or incurred by the Mortgagee. The obligation of the Mortgagor to pay such
amounts shall be included in the Liabilities of the Mortgagor to the Mortgagee
and shall accrue interest at the highest rate of interest charged relative to
any of the Liabilities.

        4-8. Property of Third Parties. The Mortgagor shall not suffer or
permit any item of property owned by a third party to be affixed, attached, or
installed on, upon or within, or be located at, the Mortgaged Premises, or any
portion or unit thereof, which may be subject to any security interest lien,
encumbrance or charge which is prior or superior to the interest granted herein.

        4-9. Tax and Insurance Escrow. In addition to other payments herein
required, the Mortgagor shall, at the Mortgagee's option, exercisable at any
time or from time to time, now or in the future, pay to the Mortgagee monthly on
the first of each month, or such other day of the month as may be designated by
the Mortgagee during the term hereof, and for so long as the Liabilities secured
by this Agreement shall remain unpaid, an amount equal to one-twelfth (1/12th)
of the municipal taxes and assessments which the Mortgagee estimates will become
payable on account of the Mortgaged Premises for the year next succeeding any
period for which such taxes and assessments have been paid or escrowed
hereunder, and, (upon the occurrence of an Event of Default hereunder)
one-twelfth (1/12th) of the insurance premiums which the Mortgagee estimates
will become payable on account of the Collateral for the year next succeeding
any period for which such premiums have been paid or escrowed hereunder,
sufficient to enable Mortgagee to accumulate at least thirty (30) days prior to
the dates upon which such municipal taxes and assessments or insurance premiums
are payable the amounts then due and payable. Further, the Mortgagor shall pay
to the Mortgagee on demand the amount of any deficiency of the funds so
collected when the actual amount of such taxes and assessments or insurance
premiums become known. The Mortgagee shall maintain such funds in a non-interest
bearing account which may be commingled with other funds of the Mortgagee. The
Mortgagee shall apply said funds to the payment of municipal taxes and
assessments or insurance premiums, as applicable, to the extent such amounts are
determined by the Mortgagee to be due and payable. In the event the Mortgagee
collects such tax or insurance payments hereunder, the Mortgagor shall deliver
to the Mortgagee the bills representing any such amounts within five (5)
business days of the receipt thereof by the Mortgagor. Notwithstanding the
provisions of this Section 4-9, upon an occurrence of an event which is, or,
solely with the passage of time, would be, an Event of Default hereunder, the
Mortgagee shall not be required to apply such funds as provided above, and may
set off such funds against the Liabilities and apply any such funds towards the
Liabilities in accordance with Section 10-6, hereunder.

         4-10. Litigation.  There is no suit, action,  proceeding,  or
     investigation   presently   pending  or,  to  the  Mortgagor's   knowledge,
threatened against the Mortgagor, or any of the Collateral, which, if determined
adversely,  would have a  material  adverse  effect  upon the  Mortgagor  or the
Collateral.

         4-11. Future Action. The Mortgagor shall do all such things and execute
all such documents from time to time hereafter as the Mortgagee may reasonably
request in order to carry into effect the provisions and intent of this
Agreement and to protect, perfect, and maintain the Mortgagee's interest in and
to the Collateral.

         4-12. Additional Information; Annual Appraisals. The Mortgagor shall
furnish the Mortgagee with such financial information or other information
pertaining to the operation of the Mortgagor, Mortgagor's parent known as Zoom
Telephonics, Inc., a Canadian corporation ("Mortgagor's Parent"), the Collateral
and any Guarantor of the Liabilities as the Mortgagee may from time to time
reasonably request and, without limiting the foregoing, as to Mortgagor,
Mortgagor's Parent and any Guarantor of the Liabilities and without the
necessity of a request by Mortgagee, Mortgagor shall furnish Mortgagee (i)
within one hundred twenty (120) days of the close of the fiscal year of the
Mortgagor and or Mortgagor's Parent, the audited, unqualified financial
statement and operating statement of the Mortgagor and Mortgagor's Parent, on a
consolidated and non-consolidated basis, certified by a firm of independent
certified public accountants of recognized standing acceptable to Mortgagee, in
form and substance reasonably satisfactory to Mortgagee, (ii) federal tax
returns of Mortgagor and Mortgagor's Parent, (iii) cash flow statements showing
the source and uses of funds for all Mortgagor's and Mortgagor's Parent's
interests and, as to the Mortgaged Premises, annual budgets and rent rolls and
leases (as requested), (iv) within sixty (60) days of the end of each quarter of
each calendar year, quarterly interim financial statements of Mortgagor and
Mortgagor's Parent certified by the principal Financial Officer of Mortgagor and
Mortgagor's Parent, respectively, (v) with respect to Mortgagor and Mortgagor's
Parent, within thirty (30) days of filing with any governmental body, all
filings or reports filed with any federal or state governmental agency
including, without limitation, the Securities and Exchange Commission (the
"SEC") including, without limitation, any and all so called "10K Reports" or
"10K Filings", "10Q Reports" or "10Q Filings" and promptly after the sending or
filing thereof, as the case may be, copies of any proxy statements, financial
statements or reports which the Mortgagor or Mortgagor's Parent have made
available to their shareholders and copies of any regular, periodic and special
reports or registration statements which the Mortgagor or Mortgagor's Parent
file with the SEC or any governmental authority which may be substituted
therefor or any national securities exchange. The Mortgagor shall provide the
Mortgagee with such other financial information or data (including, without
limitation, information and data relating to Mortgagor's Parent) as the
Mortgagee may reasonably request from time to time in form satisfactory to the
Mortgagee including appraisals as reasonably requested by Mortgagee hereunder
and any failure of the Mortgagor to provide such financial information as so
requested by the Mortgagee shall constitute a default hereunder. The Mortgagor
further agrees that the Mortgagee may contact any third party, including,
without limitation, any lienholders on the Collateral, any insurance company
insuring the Collateral, and any financial institution with which the Mortgagor
maintains a loan or depository relationship, to obtain information relating to
the Receivables Collateral and the ownership, use, operation, maintenance or
construction of the Collateral. The Mortgagor hereby authorizes each such third
party to release such information to the Mortgagee and agrees to execute any
documents requested by the Mortgagee to enable the Mortgagee to obtain such
information. The Mortgagor further agrees that, at the election of the
Mortgagee, and at the sole cost and expense of Mortgagor, the Mortgagor shall
provide Mortgagee with appraisals of the Mortgaged Premises prepared by an
independent appraiser selected by Mortgagee, in its sole discretion.

         4-13.    Hazardous Waste.

                  (a) The Mortgagor represents, warrants and covenants that
         neither the Mortgagor nor, to the best of Mortgagor's knowledge, any
         person for whose conduct the Mortgagor is legally responsible ever:

                      (i) owned, occupied, or operated a site or vessel on which
                      any hazardous material or oil was or is stored (except if
                      such storage was or is in compliance with all laws,
                      ordinances, and regulations pertaining thereto)
                      transported, or disposed of (the terms site, vessel, oil
                      and hazardous material respectively being used in this
                      Section with the meaning given those terms in
                      Massachusetts General Laws, Chapter 21E, as amended);

                     (ii) directly or indirectly  transported,  or arranged for
                     the transport on the  Mortgaged  Premises  (except the
                     regular  delivery of home heating oil);

                    (iii) caused or was legally responsible for any release, or
                     threat of release, of any hazardous material or oil;

                     (iv) received notification from any federal, state, or
                     other governmental authority of: any potential, known, or
                     threat of release of any hazardous material or oil on or
                     from the Collateral, or any other site or vessel owned,
                     occupied, or operated either by the Mortgagor or any person
                     for whose conduct the Mortgagor is responsible or whose
                     liability may result in a lien on the Collateral; or the
                     incurrence of any expense or loss by such governmental
                     authority, or by any other person, in connection with the
                     assessment, containment, or removal of any release, or
                     threat of release, of any hazardous material or oil from
                     the Collateral or any such site or vessel.

                  (b) To the best of the Mortgagor's knowledge, the Mortgagor
         represents, warrants and covenants that no hazardous material or oil
         was ever, or is now, stored on (except in compliance with all laws,
         ordinances, and regulations pertaining thereto), transported, or
         disposed of on the Collateral.

                  (c)      The Mortgagor shall:

                     (i) not store (except in compliance with all laws,
                     ordinances, and regulations pertaining thereto), or dispose
                     of any hazardous material or oil on the Collateral, or on
                     any other site or vessel owned, occupied, or operated
                     either by the Mortgagor, or by any person for whose conduct
                     the Mortgagor is responsible;

                     (ii) neither directly nor indirectly transport or arrange
                     for the transport of any hazardous material or oil;

                     (iii) upon notice from Mortgagee, provided that Mortgagee
                     agrees to only give such notice upon its own reasonable
                     belief of the necessity of such action, take all such
                     action, including, without limitation, the conducting of
                     engineering tests (at the sole expense of the Mortgagor) to
                     (x) confirm that no hazardous material or oil is or ever
                     was stored on the Collateral (y) to assess, contain, and
                     remove any such hazardous material or, oil on the
                     Collateral, and (z) to qualify for any insurance program or
                     safe harbor which may be available under said Chapter 21E,
                     as amended; and

                     (iv) provide the Mortgagee with written notice: (x) upon
                     the Mortgagor's obtaining knowledge of any potential or
                     known release, or threat of release, of any hazardous
                     material or oil at or from the Collateral, or any other
                     site or vessel owned, occupied, or operated by the
                     Mortgagor or by any person for whose conduct the Mortgagor
                     is responsible or whose liability may result in a lien on
                     the Collateral; (y) upon the Mortgagor's receipt of any
                     notice to such effect from any federal, state, or other
                     governmental authority; and (z) upon the Mortgagor's
                     obtaining knowledge of any incurrence of any expense or
                     loss by such governmental authority in connection with the
                     assessment, containment, or removal of any hazardous
                     material or oil for which expense or loss the Mortgagor may
                     be liable or for which expense a lien may be imposed on the
                     Collateral.

                  (d) The Mortgagor hereby covenants and agrees that the
         Mortgagee, its agents and representatives, may, from time to time on
         prior written notice to the Mortgagor and during regular business
         hours, make periodic inspections of the Collateral and, in connection
         therewith, may make such tests of the air, soil, ground water and
         building materials, as the Mortgagee, its agents and representatives,
         shall deem reasonably necessary.

                  (e) The Mortgagor shall indemnify, defend, and hold the
         Mortgagee harmless of and from any claim brought or threatened against
         the Mortgagee by the Mortgagor, any guarantor or endorser of the
         Liabilities, or any governmental agency or authority or any other
         person (as well as from attorneys' reasonable fees and expenses in
         connection therewith) on account of the presence of hazardous material
         or oil on the Collateral, the release of hazardous material or oil on
         or from the Mortgaged Premises, or the failure by the Mortgagor to
         comply with the terms and provisions hereof (each of which may be
         defended, compromised, settled, or pursued by the Mortgagee with
         counsel of the Mortgagee's selection, but at the expense of Mortgagor).
         The within indemnification shall survive: (i) payment of the
         Liabilities, (ii) any termination, release, or discharge executed by
         the Mortgagee in favor of the Mortgagor, (iii) any foreclosure of this
         Mortgage, (iv) any acceptance of a deed in lieu of foreclosure by the
         Mortgagee or any affiliate or subsidiary thereof and (v) any sale of
         the Mortgaged Premises.

         4-14. Mortgage Conditions. This Mortgage, Security Agreement and
Assignment is upon the STATUTORY CONDITION and upon the further condition that
the Mortgagor comply with all the terms and provisions of the Note and this
Agreement, upon breach of which conditions, the Mortgagee shall have the
STATUTORY POWER OF SALE.

         4-15. Compliance with Leases and Contracts. The Mortgagor is not in
default under any material terms and conditions of any Lease or Contract and
shall, during the term of this Agreement, perform all of the material
obligations of the Mortgagor under any such Lease or Contract within the period
that such performance is required. The Mortgagor has entered into, and will
maintain in full force and effect, all Contracts necessary for the use,
maintenance, construction, and operation of the Collateral, and at the option of
the Mortgagee, will do all things and execute all such documents as the
Mortgagee may request to assign the Mortgagor's rights therein to the Mortgagee.
The Mortgagor further agrees to provide first class management of the Mortgaged
Premises and that the management of the Mortgaged Premises shall be subject to
the prior approval of Mortgagee, which shall be in Mortgagee's reasonable
discretion and which approval shall not be unreasonably withheld or delayed.

         4-16. Collection of Rents. The Mortgagor agrees not to collect or
accept the payment of any Rental Payments, or other income or profit from, or on
account of, any Lease or the use or occupation of the Collateral, in advance of
the time when such payment becomes due unless such amount is delivered to the
Mortgagee to be applied toward the Liabilities in accordance with Section 10-6
hereof and except for any so-called last month's rents or security deposits
which may be collected in advance by Mortgagor.

         4-17. Modification of Lease and Contract. The Mortgagor will not
materially modify or consent to the material modification of any provision of,
or cancel, terminate or accept the early cancellation or termination, of any
Lease or Contract, without the prior written consent of the Mortgagee, which
consent shall not be unreasonably withheld or delayed.

         4-18. Leases. The Mortgagor shall not enter into any Lease without the
prior written consent of the Mortgagee, which consent shall not be unreasonably
withheld or delayed. The Mortgagor shall promptly furnish the Mortgagee with
copies of each and every Lease and, upon the reasonable request of the
Mortgagee, any other information relative to each such Lease and the tenant
thereunder. Each such Lease shall be in form and substance reasonably
satisfactory to the Mortgagee and, without limiting the generality of the
foregoing, shall include a provision confirming that the Lease is subordinate to
the lien of this Agreement and consenting to the assignment provided for herein
of the Lease to the Mortgagee. The Mortgagor will take all action as may be
requested by the Mortgagee in furtherance of the rights of the Mortgagee
hereunder, including, without limitation, obtaining estoppel certificates and
agreements (in form satisfactory to the Mortgagee) from each tenant
subordinating the Lease to the lien of this Agreement, and taking all
appropriate action to lease any portions of the Mortgaged Premises not occupied
by the Mortgagor.

         4-19. Eminent Domain. The Mortgagor shall advise the Mortgagee of any
proposed taking of which the Mortgagor has notice by any State, Federal or Local
authority of all or a portion of the Collateral. The Mortgagor shall cooperate
with the Mortgagee in connection with the negotiation of any such taking and any
awards or damages payable to the Mortgagor in connection therewith and shall
take any action relating thereto reasonably requested by the Mortgagee. The
Mortgagor will permit the Mortgagee, at the Mortgagee's option in each instance,
to the exclusion of the Mortgagor, to conduct the adjustment of each such damage
or award claim. The Mortgagor hereby appoints the Mortgagee as the Mortgagor's
attorney in fact to obtain, adjust and settle, each such damage or award claim
and to endorse in favor of the Mortgages any and all drafts and other
instruments with respect thereto. The within appointment, being coupled with an
interest, is irrevocable until this Agreement is terminated by a written
instrument executed by a duly authorized officer of the Mortgagee. The Mortgagee
shall not be liable for any loss sustained on account of any exercise pursuant
to said power unless such loss is caused by the willful misconduct and actual
bad faith of the Mortgagee. The Mortgagee may apply any proceeds of such taking
against the Liabilities, whether or not such have matured, in accordance with
Section 10-6 herein.

         4-20. Abatement. The Mortgagor will notify the Mortgagee of any action
which the Mortgagor intends to take with respect to the abatement of any
municipal taxes or assessments and shall initiate any such abatement action at
the request of the Mortgagee. The Mortgagor will advise the Mortgagee as to the
status of any such action and will not compromise or settle any such action
without the prior written consent of the Mortgagee, which consent shall not be
unreasonably withheld or delayed. The Mortgagor hereby appoints the Mortgagee as
the Mortgagor's attorney in fact, effective after the occurrence of any event
which is, or solely with the passage of time would be, an Event of Default
hereunder, to initiate, prosecute, obtain, adjust, and settle, any such
abatement action and to endorse in favor of the Mortgagee any and all drafts and
other instruments with respect thereto. The within appointment, being coupled
with an interest, is irrevocable until this Agreement is terminated by a written
instrument executed by a duly authorized officer of the Mortgagee. The Mortgagee
shall not be liable for any loss sustained on account of any exercise pursuant
to said power unless such loss is caused by the willful misconduct and actual
bad faith of the Mortgagee. After the occurrence of any event which is, or
solely with the passage of time would be, an Event of Default hereunder, the
Mortgagee may apply any proceeds of such abatement action against the
Liabilities, whether or not such have matured, in accordance with Section 10-6
herein.

         4-21. Junior Mortgage. The Mortgagor does hereby covenant and agree
that no junior  mortgage or mortgages shall be permitted in connection with
the Collateral without the prior written consent of the Mortgagee.

         4-22. Special Covenants. Year 2000 Compliance. The Mortgagor represents
and warrants to the  Mortgagee  (which  representation  and warranty  shall
survive the making of the loan  evidenced  by the Note) that the  Mortgagor  has
taken  necessary  action to assess,  evaluate  and correct all of the  hardware,
software,  embedded  microchips  and  other  processing  capabilities  it  uses,
directly or  indirectly,  to ensure that it will be able to function  accurately
and without interruption or ambiguity using date information before,  during and
after January 1, 2000.

         4-23. Costs. The Mortgagor covenants and agrees to pay any and all
costs and expenses including, without limitation, attorneys' fees, title
insurance costs, appraisal costs and recording costs incurred by the Mortgagee
in connection with the preparation of, and recording of, this Mortgage and the
Note secured hereby and any and all documents given in connection therewith and
any amendments, modifications or supplements thereto.

         4-24.  Material  Occurrence.   The  Mortgagor  shall  promptly  notify
     the  Mortgagee  of the  occurrence  of any event  which may have a material
adverse effect on the Collateral or the Mortgagor.

         4-25.  Compliance with Covenants.  The Mortgagor shall not indirectly
     do or cause to be done,  any act which,  if done directly by the Mortgagor,
would breach any covenant  contained  herein,  or in any other agreement between
the Mortgagor and the Mortgagee.

         4-26.    Other Representations.  The representations, covenants, and
warranties herein are in addition to any others, previously,  presently, or
hereafter  made  by  the  Mortgagor  to or  with  the  Mortgagee  in  any  other
instrument.

         4-27.    Additional Covenants and Restrictions on Mortgagor.
Mortgagor  covenants that it will not, directly or indirectly,  without the
prior written approval of the Mortgagee in each instance:

         (a)      Permit at any time the outstanding principal balance of the
                  Note plus all interest, fees and charges due thereunder or in
                  connection therewith to exceed sixty (60%) percent of the
                  value of the Mortgaged Premises, as determined by the Bank in
                  its sole discretion;

         (b)      Sell, convey, assign, transfer, mortgage, pledge, hypothecate
                  or dispose of all or any part of any legal or beneficial
                  interest in the Mortgaged Premises, or any part thereof, or
                  any interest in the Mortgagor or permit any of the foregoing,
                  except as expressly permitted by the written consent of
                  Mortgagee;

         (c)      Debt Service Covenant. At all times, the Mortgagor shall
                  maintain and hold, in its name, liquid assets (cash or
                  marketable securities), free from any and all encumbrances
                  (except the interests of Fleet Capital Corporation under a
                  certain Loan and Security Agreement between Fleet Capital
                  Corporation and Mortgagor dated as of July 13, 2000 or may be
                  amended by Amendment No. 1 to Loan and Security Agreement
                  dated as of January, 2001), the aggregate value of which is
                  equal to or greater than the annual payments of principal,
                  interest, real estate taxes and insurance premiums due under
                  the Note.

         4-28.    Additional Representation, Covenants and Warranties of
Mortgagor.


         (a)      Mortgagor represents, covenants and warrants that each of the
     Liabilities  and the  loan  evidenced  by the Loan  Agreement  and Note are
     commercial obligations and do not represent loans used for personal, family
     or  household  purposes  and are not a consumer  transaction,  or otherwise
     subject to the provisions of the M.G.L.  Chapter 140D, the Federal Truth in
     Lending  Act or  Federal  Reserve  Board  Regulation  2, or other  consumer
     statutes or regulations and restrictions;

         (b)      Principal Bank of Deposit.
     The Mortgagor will maintain all accounts relating to the Mortgaged Premises
     with the  Mortgagee.  All revenues  from the  Mortgaged  Premises  shall be
     deposited in an account with the Mortgagee or an affiliate of Mortgagee.

         (c)      Charges Against Accounts.  After the giving of any notice
     required  hereunder  and the  expiration  of any  applicable  grace  period
     provided  herein,  the  Mortgagee  may  charge any  deposit  account of the
     Mortgagor  with the Mortgagee or any affiliate of Mortgagee with the amount
     of all payments of  interest,  principal  and other sums due,  from time to
     time,  under the Note or this Mortgage,  Security  Agreement and Assignment
     and will  thereafter  notify the  Mortgagor  of the amount so charged.  The
     failure  of the  Mortgagee  to so charge  any  account  or to give any such
     notice shall not affect the  obligations  of the Mortgagor to pay interest,
     principal  and other  sums as  provided  herein,  in the Note or any of the
     other Loan Documents delivered to Mortgagee in connection with the Note.

ARTICLE 5 - MORTGAGOR'S USE OF COLLATERAL

         Unless and until the occurrence of any event which is, or solely with
the passage of time would be, an Event of Default hereunder, the Mortgagor shall
be authorized to occupy, operate, manage, hold, or otherwise use the Collateral
in the ordinary and reasonable course of the Mortgagor's business and collect,
when due, the Receivables Collateral, subject, however, to the terms and
provisions hereof.

ARTICLE 6 - EVENTS OF DEFAULT

         Upon the occurrence of any one or more of the following (hereinafter,
the "Events of Default"), any and all Liabilities of the Mortgagor to the
Mortgagee shall become immediately due and payable, without notice or demand, at
the option of the Mortgagee. The occurrence of any such Event of Default shall
also constitute, without notice or demand, a default under all other agreements
between the Mortgagee and the Mortgagor or instruments and papers given the
Mortgagee by the Mortgagor, whether now existing or hereafter arising.

         6-1. The failure by the Mortgagor to pay any amount then owing by the
Mortgagor to the Mortgagee, when due, and such failure shall continue for a
period of more than ten (10) days after written notice from Mortgagee to
Mortgagor.

         6-2.     The failure by the Mortgagor to promptly, punctually, and
faithfully perform, discharge, or comply with any of the Liabilities.

         6-3. The determination by the Mortgagee that any financial information,
representation, or warranty now or hereafter provided or made by the Mortgagor
to the Mortgagee, whether herein, or in any other document, instrument,
agreement, or paper, was not true or accurate in any material respect when
given.

         6-4. The occurrence of any event such that any indebtedness of the
Mortgagor for borrowed money from any lender other than the Mortgagee could be
accelerated, notwithstanding that such acceleration has not taken place.

         6-5. The occurrence of any event of default beyond any applicable grace
period under any agreement between the Mortgagee and the Mortgagor, or under any
instrument or paper given the Mortgagee by the Mortgagor, whether such
agreement, instrument, or paper now exists or hereafter arises (notwithstanding
that the Mortgagee may not have exercised its rights upon default under any such
other agreement, instrument or paper).

         6-6. Any act by, against, or relating to the Mortgagor, or its property
or assets, which act constitutes the application for, consent to, or sufferance
of the appointment of a receiver, trustee, or other person (pursuant to court
action or otherwise) over all, or any part of, the Mortgagor's property; the
granting of any trust mortgage or execution of an assignment for the benefit of
the creditors of the Mortgagor, or the occurrence of any other voluntary or
involuntary liquidation or extension of debt agreement for the Mortgagor; the
admission by the Mortgagor of its inability to pay its debts as they mature;
adjudication of insolvency relative to the Mortgagor; the entry of an order for
relief or similar order with respect to the Mortgagor in any proceeding pursuant
to the Bankruptcy Reform Act of 1978 as amended or any other federal statute
dealing with bankruptcy (hereinafter, generally the "Bankruptcy Code"); the
filing of any complaint, application, or petition by or against the Mortgagor
initiating any matter in which the Mortgagor is or may be granted any relief
from its debts pursuant to the Bankruptcy Code or pursuant to any other
insolvency statute or procedure other than an involuntary petition filed against
the Mortgagor which petition is dismissed within sixty (60) days of said filing
at no cost or expense to the Mortgagee; the calling or sufferance of a meeting
of creditors of the Mortgagor; the meeting by the Mortgagor with a formal or
informal creditors' committee; the offering by or entering into by the Mortgagor
of any composition, extension or other arrangement seeking relief or extension
of its debts; or the initiation of any other judicial or non-judicial proceeding
or agreement by, against, or including the Mortgagor which seeks or intends to
accomplish a reorganization or arrangement with creditors.

         6-7. The entry of any judgment against the Mortgagor, which by itself
or in the aggregate with other judgments is in excess of $30,000.00, which
judgment is not satisfied or appealed from (with execution or similar process
stayed) within fifteen (15) days of its entry.

         6-8. The service of any process upon the Mortgagee seeking to attach by
mesne or trustee process any funds of the Mortgagor on deposit with the
Mortgagee, provided, however, if a third party is successful in obtaining an
attachment or trustee process of said funds, the Mortgagor shall have thirty
(30) days in order to dissolve any such attachment or trustee process.

         6-9.     The death, legal incapacity, termination of existence,
dissolution, winding up, or liquidation of the Mortgagor.

         6-10. The sale, transfer, assignment, or other disposition of any of
the capital stock or any partnership or beneficial interest of the Mortgagor, or
the sale, transfer, assignment, pledge, mortgage or other disposition or grant
of any interest in all or any portion of the Collateral.

         6-11. The occurrence of any of the events described in this Article
with respect to any partner or beneficiary of the Mortgagor or any Guarantor or
any other guarantor, endorser, or surety to the Mortgagee of the Liabilities as
if such person were the "Mortgagor" described therein.

         6-12. The breach of the Statutory Condition contained herein, upon
which breach, the Mortgagee shall have the Statutory Power of Sale.

         6-13. Any default in the observance, performance and compliance with
any terms, provisions, covenants, conditions or warranties contained in any and
all other instruments and agreements given in connection with this Mortgage,
Security Agreement and Assignment and any and all amendments, modifications and
supplements thereto.

         6-14. If any representation or warranty of the Mortgagor, any Guarantor
or any other party (or any one or more of them) under any instrument or
agreement delivered in connection with the loan secured by this Mortgage,
Security Agreement and Assignment should prove to be inaccurate, false or
misleading in any material respect (notwithstanding that Mortgagee may not have
exercised its rights upon default thereunder).

         6-15. Without limiting any other term or provision of this Mortgage,
the occurrence of any event of default under the Additional Collateral Documents
(notwithstanding that the Mortgagee may not have exercised its rights upon
default under any such Additional Collateral Documents).


ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT

         7-1. Rights and Remedies Upon Default. Upon the occurrence of any Event
of Default, or at any time thereafter, the Mortgagee shall have all the rights
of a mortgagee and a secured party under the Massachusetts General Laws, in
addition to which the Mortgagee shall have all of the following rights and
remedies:

                  (a)      with or without taking possession, to collect the
         Receivables Collateral;

                  (b) to take possession of all or a portion of the Collateral;

                  (c) with or without taking possession of the Collateral, to
         sell, lease, or otherwise dispose of any or all of the Collateral in
         its then condition or following such preparation or processing as the
         Mortgagee deems advisable;

                  (d) with or without taking possession of the Collateral, and
         without assuming the obligations of the Mortgagor thereunder, to
         exercise the rights of the Mortgagor under, to use, or to benefit from
         any of the Contracts, Leases, or Licenses;

                  (e) with or without taking possession of the Collateral and
         with or without bringing any action or proceeding, either directly, by
         agent, or by the appointment of a receiver, maintain and repair the
         improvements on the Mortgaged Premises and manage, lease, sublease, or
         operate the Collateral on such terms as the Mortgagee, in its sole
         discretion, deems proper or appropriate;

                  (f)      to apply all or any portion of the Collateral, or the
         proceeds thereof, towards (but not necessarily in complete
         satisfaction of) the Liabilities;

                  (g) to exercise the Statutory Power of Sale;

                  (h) to foreclose any and all rights of the Mortgagor in and to
         the Collateral, whether by sale, entry, or in any other manner provided
         for hereunder or under Massachusetts General Laws;

                  (i)      to elect, upon the discretion of the Mortgagee, to
         treat any or all of the Leases as superior to the lien of the within
         Mortgage and Security Agreement.

         7-2. Sale or Other Disposition of Collateral. Any sale or other
disposition of the Collateral may be at public or private sale, to the extent
such private sale is authorized under the Massachusetts General Laws, upon such
terms and in such manner as the Mortgagee deems advisable. The Mortgagee may
conduct any such sale or other disposition of the Collateral upon the Mortgaged
Premises, in which event the Mortgagee shall not be liable for any rent or
charge for such use of the Mortgaged Premises. The Mortgagee may purchase the
Collateral, or any portion of it, at any sale held under this Article. With
respect to any Collateral to be sold pursuant to the UCC, the Mortgagee shall
give the Mortgagor at least seven (7) days written notice of the date, time, and
place of any proposed public sale, or such additional notice as may be required
under Massachusetts General Laws, and of the date after which any private sale
or other disposition may be made. The Mortgagee may sell any of the Personal
Property as part of the Mortgaged Premises, or any portion or unit thereof, at
the foreclosure sale or sales conducted pursuant hereto. The Mortgagor waives
any right to require the marshalling of any of its assets in connection with any
disposition conducted pursuant hereto. In the event all or part of the
Collateral is included at any foreclosure sale conducted pursuant hereto, a
single total price for the Collateral, or such part thereof as is sold, may be
accepted by the Mortgagee with no obligation to distinguish between the
application of such proceeds amongst the property comprising the Collateral. If
all or any portion of the Collateral is sold by the Mortgagee, the Mortgagor
shall pay to the Mortgagee on demand an amount equal to one (1%) percent of the
purchase price thereof in addition to the Liabilities and all costs of
Collection provided for herein. The obligation of the Mortgagor to pay such
amounts shall be included in the Liabilities of the Mortgagor to the Mortgagee
and shall accrue interest at the highest rate of interest charged relative to
any of the Liabilities.

         7-3.     Collection of Receivables Collateral.  In connection with the
exercise by the Mortgagee of the rights and remedies provided herein:

                  (a) The Mortgagee may notify any of the Mortgagor's debtors
         relating to the Receivables Collateral, either in the name of the
         Mortgagee or the Mortgagor) to make payment directly to the Mortgagee
         or such other address as may be specified by the mortgagee, may advise
         any person of the Mortgagee's interest in and to the Receivables
         Collateral, and may collect directly from the obligors thereon all
         amounts due on account of the Receivables Collateral;

                  (b) At the Mortgagee's request, the Mortgagor will provide
         written notification to any or all of said debtors concerning the
         Mortgagee's interest in the Receivables Collateral and will request
         that such debtors forward payment thereof directly to the Mortgagee;

                  (c) The Mortgagor shall hold any proceeds and collections of
         any of the Receivables Collateral in trust for Mortgagee and shall not
         commingle such proceeds or collections with any other funds of the
         Mortgagor; and

                  (d) The Mortgagor shall deliver all such proceeds to the
         Mortgagee immediately upon the receipt thereof by the Mortgagor in the
         identical form received, but duly endorsed or assigned on behalf of the
         Mortgagor to the Mortgagee.

         7-4. Use and Occupation of Mortgaged Premises. In connection with the
Mortgagee's exercise of the Mortgagee's rights under this Article, the Mortgagee
may enter upon, occupy, and use all or any part of the Collateral and may
exclude the Mortgagor from the Mortgaged Premises or portion thereof as may have
been so entered upon, occupied, or used. The Mortgagee shall not be required to
remove any of the Collateral from the Mortgaged Premises upon the Mortgagee's
taking possession thereof, and may render any Collateral unusable to the
Mortgagor. In the event the Mortgagee manages the Mortgaged Premises in
accordance with Section 7-1(e) herein, the Mortgagor shall pay to the Mortgagee
on demand a reasonable fee for the management thereof in addition to the
Liabilities provided for herein. Further, the Mortgagee may maintain and repair
the improvements on the Mortgaged Premises or make such alterations,
renovations, repairs, and replacements to the Collateral, as the Mortgagee, in
its sole discretion, deems proper or appropriate. The obligation of the
Mortgagor to pay such amounts and all expenses incurred by the Mortgagee in the
exercise of its rights hereunder shall be included in the Liabilities of the
Mortgagor to the Mortgagee and shall accrue interest at the highest rate of
interest charged relative to any of the Liabilities.

         7-5. Partial Sales. The Mortgagor agrees that, in case the Mortgagee in
the exercise of the Power of Sale contained herein or in the exercise of any
other rights hereunder given, elects to sell in parcels, said sales may be held
from time to time and that the power shall not be exhausted until all of the
Collateral not previously released shall have been sold, notwithstanding that
the proceeds of such sales exceed, or may exceed, the Liabilities then secured
thereby.

         7-6. Assembly of Collateral. Upon the occurrence of any Event of
Default, the Mortgagee may require the Mortgagor to assemble the Personal
Property and make it available to the Mortgagee, at the Mortgagor's sole risk
and expense, at a place or places which are reasonably convenient to both the
Mortgagee and Mortgagor.

         7-7. Power of Attorney. Upon the occurrence of any Event of Default,
the Mortgagor hereby irrevocably constitutes and appoints the Mortgagee as the
Mortgagor's true and lawful attorney, to take any action with respect to the
Collateral to preserve, protect, or realize upon the Mortgagee's interest
therein, each at the sole risk, cost and expense of the Mortgagor, but for the
sole benefit of the Mortgagee. The rights and powers granted the Mortgagee by
the within appointment include, but are not limited to, the right and power to:
(i) prosecute, defend, compromise, settle, or release any action relating to the
Collateral; (ii) endorse the name of the Mortgagor in favor of the Mortgagee
upon any and all checks or other items constituting remittances or proceeds of
Receivables Collateral; (iii) sign and endorse the name of the Mortgagor on, and
to receive as secured party, any of the Collateral; (iv) sign and file or record
on behalf of the Mortgagor any financing or other statement in order to perfect
or protect the Mortgagee's security interest; (v) enter into leases or subleases
relative to all or a portion of the Mortgaged Premises; (vi) enter into any
contracts or agreements relative to, and to take all action deemed necessary in
connection with, the construction of any improvements on the Mortgaged Premises;
(vii) manage, operate, maintain, or repair the Mortgaged Premises, and (viii)
exercise the rights of the Mortgagor under any Contracts, Leases, or Licenses.
The Mortgagee shall not be obligated to perform any of such acts or to exercise
any of such powers, but if the Mortgagee elects so to perform or exercise, the
Mortgagee shall not be accountable for more than it actually receives as a
result of such exercise of power, and shall not be responsible to Mortgagor
except for the Mortgagee's willful misconduct and actual bad faith. All powers
conferred upon the Mortgagee by this Agreement, being coupled with an interest,
shall be irrevocable until terminated by a written instrument executed by a duly
authorized officer of the Mortgagee.

         7-8. Rights and Remedies. The rights, remedies, powers, privileges, and
discretions of the Mortgagee hereunder (hereinafter the Mortgagee's Rights and
Remedies), shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delays or omissions by the Mortgagee in exercising
or enforcing any of the Mortgagee's Rights and Remedies shall operate as or
constitute a waiver thereof. No waiver by the Mortgagee of any default hereunder
or under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of the
Mortgagee's Rights or Remedies, and no other agreement or transaction, of
whatever nature entered into between the Mortgagee and the Mortgagor at any
time, whether before, during, or after the date hereof, preclude any other or
further exercise of the Mortgagee's Rights and Remedies. No waiver or
modification on the Mortgagee's part on any one occasion shall be deemed a
waiver on any subsequent occasion, nor shall it be deemed a continuing waiver.
All of the Mortgagee's Rights and Remedies under this Agreement or any other
agreement or transaction shall be cumulative, and not alternative or exclusive,
and may be exercised by the Mortgagee at such time or times and in such order of
preference as the Mortgagee in its sole discretion may determine.

ARTICLE 8 - INTENTIONALLY DELETED

ARTICLE 9 - NOTICE

         All notices, demands and other communications made in respect to this
Agreement shall be made to the following addresses (each of which may be changed
upon seven (7) days written notice to all others) given by hand, by telegram, or
by certified or registered mail, return receipt requested, as follows:

         If to the Mortgagee:      Wainwright Bank & Trust Company
                                   63 Franklin Street
                                   Boston, Massachusetts 02110
                                   Attention:  Commercial Real Estate Department

         With a copy to:           Carolan & Greeley
                                   65 Franklin Street
                                   Boston, Massachusetts 02110-1301
                                   Attention: Stephen A. Greeley, Esquire

         If to the Mortgagor:      Zoom Telephonics, Inc.
                                   207 South Street
                                   Boston, Massachusetts 02111

         With a copy to:           Brown, Rudnick, Freed and Gesmer
                                   One Financial Center
                                   Boston, MA  02111
                                   Attention:  Carl E. Axelrod, Esquire

Any such notice shall be deemed received the earlier of (i) three (3) days after
the mailing of such notice in accordance with the terms and conditions and to
the addresses provided above, or (ii) the date of which the notice is delivered
by hand or by telegram to the address and to the individual provided above.

ARTICLE 10 - MISCELLANEOUS

         10-1. Mortgagor. In the event that the Mortgagor is more than one
person or entity, all representations, covenants, warranties, defaults, rights,
remedies, powers, privileges, and discretions shall be applicable to the
Mortgagors individually, jointly, and severally, with the exception of those
which are made by their terms applicable to a specific Mortgagor.

         10-2.    Exhibits.  Any and all Exhibits referred to herein shall be
     deemed  annexed  hereto  prior to the  execution  hereof  and  specifically
incorporated by reference herein.

         10-3. Headings. All section headings included within this Mortgage,
Security Agreement, and Assignment shall be for reference only, and shall not
limit or restrict, in any manner whatsoever, the breadth or nature of the
provisions included within each subject section.

         10-4. Successors and Assigns. In the event the ownership of the
Collateral, or any part thereof, becomes vested in a person other than the
Mortgagor, the Mortgagee may, without notice to the Mortgagor, deal with such
successor or successors in interest with reference to this Agreement and the
Liabilities in the same manner as with the Mortgagor, without in any way waiving
the default occasioned by such transfer of ownership or in any way vitiating or
discharging the Mortgagor's liability hereunder or upon the Liabilities, and no
compromise, settlement, release or sale of the Collateral, no forbearance on the
part of the Mortgagee, and no alteration, amendment, cancellation, waiver or
modification of any term or condition or extension of the time for payment of
the Liabilities given by the Mortgagee shall operate to release, discharge,
modify, change or affect the original liability of the Mortgagor herein, either
in whole or in part, notice of any action being waived.

         10-5. Set Off. Except for tax and insurance escrow funds which are
provided for in Section 4-9 herein, all deposits or other sums at any time
credited by or due from the Mortgagee to the Mortgagor, and all cash,
securities, instruments, or other property of the Mortgagor in the possession of
the Mortgagee (whether for safekeeping, or otherwise) shall at all times
constitute security for the Liabilities, and may be applied or set off by the
Mortgagee against the Liabilities at any time whether or not the Liabilities are
then due or other collateral is then available to the Mortgagee.

         10-6. Application of Proceeds. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied toward the Liabilities in such order and manner as the
Mortgagee determines in its sole discretion, any statute, custom, or usage to
the contrary notwithstanding. The Mortgagor shall remain liable to the Mortgagee
for any deficiency remaining following such application.

         10-7.    Waiver.

                  (a) The Mortgagor WAIVES notice of non-payment, demand,
         presentment, protest and all forms of demand and notice, both with
         respect to the Liabilities and the Collateral except as stated
         expressly herein.

                  (b) The Mortgagor, if entitled to it, WAIVES the right to
         notice and/or hearing prior to the exercise of any of the Mortgagee's
         Rights and Remedies.

         10-8. Responsibility of Mortgagee. The Mortgagee shall not be liable
for any loss sustained by the Mortgagor resulting from any action, omission, or
failure to act by the Mortgagee with respect to the exercise or enforcement of
its rights under this Agreement or its relationship with the Mortgagor unless
such loss is caused by the willful misconduct and actual bad faith of the
Mortgagee. This Agreement and the Mortgagee's exercise of its rights hereunder
shall not operate to place any responsibility upon the Mortgagee for the
control, care, management, or repair of the Collateral, nor shall it operate to
place any responsibility upon the Mortgagee to perform the obligations of the
Mortgagor under any Lease, License, or Contract, or to make the Mortgagee
responsible or liable for any waste committed on the Mortgaged Premises, any
damages or defective condition of the Mortgaged Premises, or any negligence in
the management, upkeep, repair, or control of the Mortgaged Premises.

         10-9. Indemnification. The Mortgagor shall indemnify, defend, and hold
the Mortgagee harmless of and from any claim brought or threatened against the
Mortgagee by the Mortgagor, any guarantor or endorser of the Liabilities, or any
other person (as well as from attorneys' reasonable fees and expenses in
connection therewith) on account of the Collateral, or on account of the
Mortgagee's relationship with the Mortgagor or any other guarantor or endorser
of the Liabilities (each of which may be defended, compromised, settled, or
pursued by the Mortgagee with counsel of the Mortgagee's selection, but at the
expense of the Mortgagor). The within indemnification shall survive: (i) payment
of the Liabilities, (ii) any termination, release, or discharge executed by the
Mortgagee in favor of the Mortgagor, (iii) any foreclosure of this Mortgage,
(iv) any acceptance of a deed in lieu of foreclosure by the Mortgagee or any
affiliate or subsidiary thereof or (v) any sale of the Collateral.

         10-10. Binding on Successors. This Agreement shall be binding upon the
Mortgagor and the Mortgagor's heirs, executors, administrators, representatives,
successors, and assigns and shall inure to the benefit of the Mortgagee and the
Mortgagee's successors and assigns. This provision shall not in any way be
deemed to be a waiver by the Mortgagee of any Event of Default provided for
herein.

         10-11. Severability. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, and
enforceability of such provision in any other instance, nor the validity,
legality, or enforceability of any other provision of this Agreement.

         10-12.   Modification.


                  (a) This Agreement and all other instruments executed in
         connection herewith incorporate all discussions and negotiations
         between the Mortgagor and the Mortgagee concerning the matters included
         herein and in such other instruments. No such discussions or
         negotiations shall limit, modify, or otherwise affect the provisions
         hereof. No modification, amendment, or waiver of any provision of this
         Agreement, or of any provisions of any other agreement between the
         Mortgagor and the Mortgagee, shall be effective unless executed in
         writing by the party to be charged with such modification, amendment,
         or waiver, and if such party be the Mortgagee, then by a duly
         authorized officer thereof.

                  (b) The Mortgagor may take any action herein prohibited, or
         omit to perform any act required to be performed by it, if the
         Mortgagor shall obtain the prior written consent by a duly authorized
         officer of the Mortgagee for each such action, or omission to action.

         10-13. Payment of Costs. The Mortgagor shall pay on demand all Costs of
Collection and all reasonable expenses of the Mortgagee in connection with the
preparation, execution, and delivery of this Agreement and of any other
documents and agreements between the Mortgagor and the Mortgagee, including,
without limitation, attorneys' reasonable fees and disbursements, and all
expenses which the Mortgagee may hereafter incur in connection with the
collection of the Liabilities or the protection or enforcement of any of the
Mortgagee's rights against the Mortgagor, any Collateral, and any guarantor or
endorser of the Liabilities. The Mortgagor authorizes the Mortgagee to pay all
such expenses and to charge the same to any account of the Mortgagor with the
Mortgagee.

         10-14. Additional Advances. All amounts which the Mortgagee may advance
under any Sections of this Agreement shall be repayable to the Mortgagee with
interest at the highest rate charged relative to any of the Liabilities, on
demand, shall be a Liability, and may be charged by the Mortgagee to any deposit
account which the Mortgagor maintains with the Mortgagee.

         10-15. Governing Law. This Agreement and all rights and obligations
hereunder, including matters or construction, validity and performance, shall be
governed by the laws of The Commonwealth of Massachusetts. The Mortgagor submits
itself to the jurisdiction of the courts of said Commonwealth for all purposes
with respect to this Agreement and the Mortgagor's relationship with the
Mortgagee.

         10-16. Termination. This Agreement shall remain in full force and
effect until specifically terminated in writing by a duly authorized officer of
the Mortgagee. Such termination by the Mortgagee may be conditioned upon such
further indemnifications provided to the Mortgagee by or on behalf of the
Mortgagor as the Mortgagee may request. No termination pursuant to this Section
shall affect the indemnification provided for in this Article.

         10-17. Specific Performance. The failure by the Mortgagor to perform
all and singular the Mortgagor's obligations hereunder will result in
irreparable harm to the Mortgagee for which the Mortgagee shall have no adequate
remedy at law. Consequently, the Mortgagor agrees that such obligations are and
shall be specifically enforceable by the Mortgagee.

         10-18.   Intent.  It is intended that:

                  (a) this Agreement take effect as a sealed instrument;

                  (b) with the exception of the Mortgagee's internal costs and
         expenses, all reasonable costs and expenses incurred by the Mortgagee
         in connection with the Mortgagee's relationship(s) with the Mortgagor
         shall be borne by the Mortgagor; and

                  (c) the interests created by this Agreement secure all of the
Liabilities  of the  Mortgagor  to the  Mortgagee,  whether now existing or
hereafter arising.

         10.19.   Receipt of Copy.  The Mortgagor acknowledges having received
a copy of this Agreement.


         10-20.   Reference.  This instrument may be referred to herein as the
"Mortgage," "Mortgage,  Security Agreement and Assignment," or "Agreement,"
but no such reference shall limit the  effectiveness  of this instrument for any
Mortgagee hereunder.



<PAGE>


         IN WITNESS WHEREOF, the Mortgagor has executed this Agreement in
Boston, Massachusetts, as a sealed instrument on the date first above written.

                                                     ("Mortgagor")

                                Zoom Telephonics, Inc., a Delaware corporation



                                 By:      _________________________________
                                          Frank G. Manning
                                Its:      President


                                 By:      _________________________________
                                          Robert A. Crist
                                Its:      Treasurer


COMMONWEALTH OF MASSACHUSETTS    )
                                 )  SS.
COUNTY OF ___________________    )

         On this _______ day of January, 2001, before me personally appeared
Frank B. Manning, to me known to be the President of Zoom Telephonics, Inc. who
executed the foregoing instrument and acknowledged that he executed the same as
his free act and deed and the free act and deed of Zoom Telephonics, Inc.



                                                  Notary Public
                                                  My Commission Expires:



COMMONWEALTH OF MASSACHUSETTS    )
                                 )  SS.
COUNTY OF ___________________    )

         On this _______ day of January, 2001, before me personally appeared
Robert A. Crist, to me known to be the Treasurer of Zoom Telephonics, Inc. who
executed the foregoing instrument and acknowledged that he executed the same as
his free act and deed and the free act and deed of Zoom Telephonics, Inc.



                                                   Notary Public
                                                   My Commission Expires:




<PAGE>


                                    EXHIBIT A


Parcel 1

A certain parcel of land located at 207-209 South Street and 162-168 Kneeland
Street, Boston, Suffolk County, Massachusetts, and more particularly described
as follows:

A parcel of land with the buildings thereon situated and now numbered 207-209 on
South Street and 162-168 on Kneeland Street, in said Boston, supposed to contain
about 4,864 square feet of land and comprising Lots 1, 2, 3, 5, 6 and 7 on plan
made by S.P. Fuller, dated June 3, 1842 and recorded with Suffolk Deeds Book
493, Page 3, and so much of the passageway shown on said plan as lies between
said Lots 1, 2, 3 and Lots 5, 6 and 7 and also part of Lot 664 on plan of lands
of South Cove Corporation, made by F. Jackson, dated April 23, 1840 and recorded
with said deeds at the end of Book 454, together bounded:

Southeasterly on South Street, thirty-four feet;

Southwesterly on the passageway  shown on the Fuller plan  above-mentioned,
nineteen feet, six inches;

Southeasterly again on said passageway, three feet, six inches and on land
formerly of Johnson, now or late of Keefe, Trustee, by a line through the middle
of the partition wall, forty-three feet, three inches;

Southwesterly again on Kneeland Street, fifty-seven feet, four inches;

Northwesterly  on land formerly of the Market Bank,  now or late of Harrity
et al, sixty-two feet, six inches;

Northeasterly on a passageway leading to Utica Street, eleven feet, one inch;

Northwesterly again in part on said passageway and in part on the lot numbered
667 on said plan of lands of South Cove Corporation, thirteen feet; and

Northeasterly again on land formerly of Darling, now or late of Robert B.
Crocker, being part of said lot numbered 664, sixty-one feet, and one inch.

Or however otherwise said premises may be bounded, measured or described and be
any or all of said measurements or contents more or less.







<PAGE>



Parcel 2

A certain parcel of land located at 195-201 South Street, Boston, Suffolk
County, Massachusetts, and more particularly described as follows:

A certain parcel of registered land situated in Boston, in the County of Suffolk
and Commonwealth of Massachusetts, bounded and described as follows:

Southeasterly by South Street, thirty and 79/100 (30.79) feet;

Southwesterly by land now or formerly of Renton Whidden, the line running in
part through a partition wall, sixty and 76/100 (60.76) feet;

Southeasterly by said Whidden land, nine and 6/100 (9.06) feet;

Southwesterly by a passageway, thirty-seven and 6/100 (37.06) feet;

Northwesterly by land now or formerly of Helen S. Hunt, the line running in
part through the middle of a partition wall, fifty-five and 22/100 (55.22) feet;
Northeasterly by Utica Place, thirty-seven and 88/100 (37.88) feet

Southeasterly by land now or formerly of John Lawrence et al Trustees, the line
running through the middle of a party wall, fourteen and 96/100 (14.96) feet;
and

Northeasterly by said Lawrence et al Trustees land, the line running through the
middle of the party wall, fifty-eight and 01/100 (58.01) feet.

All of said boundaries are determine by the Court to be located as shown on two
plan drawn by S. L. Leftovith, Surveyor, dated July 14, 1915, and April 4, 1915,
as modified and approved by the Court, filed in the Land Registration Office as
Plan Nos. 5527-A and 5659-A, copies of a portion of which are filed with
Certificate of Title Nos. 7546 and 8293, respectively.

There is appurtenant to the above-described land the right to use the passageway
as shown on said plans and said Utica Place, in common with other entitled
thereto.

The above-described land also has the benefit of the provisions of an agreement
by and between John Lawrence et al, Trustees, and Frederick J. Weyand dated
August 25, 1915 and duly recorded with the Suffolk County Registry of Deeds at
Book 3903, Page 186; and it also has the benefit of such easements, if any, as
were in force at date of original decrees by reason of the existence of the
partition walls shown on said plan.






<PAGE>


Parcel 3

A certain  parcel of land with the buildings  thereon known as and numbered
50 Utica  Street  in said  Boston  adjoining  the  above-described  Parcel 2 and
situated  in said  Boston at the  corner  of Utica  Street  and Utica  Place and
bounded and described as follows:

Northwesterly by Utica Street, 55.20 feet;

Northeasterly by Utica Place, 58.14 feet;

Southeasterly by the above-described parcel, the line running in part through
the middle of a partition wall, 55.22 feet; and

Southwesterly by a passageway shown on said plan running into Utica Street,
57.93 feet.

Both said Parcels 2 and 3 are also shown on S. L. Leftovith's plan dated
February 15, 1921 recorded with Suffolk Deeds, Book 4292, Page 147.



                                           Square footage is not insured.