Document:

<PAGE>

                                                                    EXHIBIT 10.1

                              FOURTH SUPPLEMENT TO
                              AMENDED AND RESTATED
                    AMENDMENT NO. 4 TO AND WAIVER NO. 1 UNDER
                      AMENDED AND RESTATED CREDIT AGREEMENT

         FOURTH SUPPLEMENT dated as of August 10, 2001 (this "SUPPLEMENT" or the
"FOURTH SUPPLEMENT") to Amended and Restated Amendment No. 4 to and Waiver No. 1
(the "BASIC WAIVER") dated as of March 21, 2001, as supplemented by the First
Supplement thereto (the "FIRST SUPPLEMENT") dated as of April 20, 2001, the
Second Supplement thereto (the "SECOND SUPPLEMENT") dated as of May 15, 2001 and
the Third Supplement thereto (the "THIRD Supplement") dated as of July 12, 2001
(taken together, the "EXISTING WAIVER") under the Amended and Restated Credit
Agreement dated as of December 11, 1998 (as heretofore amended or modified, the
"CREDIT AGREEMENT") among POLAROID CORPORATION (the "COMPANY"), the LENDERS
party thereto (the "LENDERS"), FLEET NATIONAL BANK (formerly known as
BANKBOSTON, N.A.), as Co-Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT") and
Collateral Agent.

                              W I T N E S S E T H :

         WHEREAS, the Company and the Lenders entered into the Existing Waiver,
pursuant to which the Lenders granted certain interim waivers to the Company on
terms and conditions set forth therein;

         WHEREAS, the Company has requested that the Lenders increase the Waiver
Availability Limit by $10,000,000 and extend the duration of the interim
waivers, as well as agree to certain other changes to the Credit Agreement; and

         WHEREAS, the Company, in consideration for the Lenders making an
additional $10,000,000 of Loans available to it, which they are currently not
obligated to do, proposes to enter into the Principal Property Mortgages (as
defined below), which shall equally and ratably secure the Secured Parties, the
holders of the Notes and the lenders under the UK Credit Agreement; and

         WHEREAS, except as otherwise expressly modified hereby, the terms of
the Existing Waiver (including those of the First Supplement, the Second
Supplement and the Third Supplement) are and will remain in full force and
effect, and the Company expressly acknowledges and confirms the continued
applicability of Section 3(c) of the Basic Waiver (after giving effect to the
modifications contained herein);

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         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. DEFINED TERMS; REFERENCES. (a) Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
and is not defined in the Existing Waiver shall have the meaning assigned to
such term in the Credit Agreement. Unless otherwise specifically defined herein,
each term used herein which is defined in the Existing Waiver shall have the
meaning assigned to such term in the Existing Waiver. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Supplement becomes
effective, refer to the Credit Agreement as modified hereby for the period the
Existing Waiver remains in effect. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference to "this Waiver" and each
other similar reference in the Existing Waiver shall, after this Supplement
becomes effective, refer to the Existing Waiver as modified hereby for the
period the Existing Waiver remains in effect.

         (b) As used herein and in the Credit Agreement, the following
additional terms have the following meanings:

         "COMPANY INFORMATION" means the June 29 Meeting Materials and the
presentation made by the Company during the conference call with the Lenders on
August 7, 2001.

         "PRINCIPAL PROPERTIES" means (a) the real property located at 100
Duchaine Blvd., New Bedford, Massachusetts, referred to as "the New Bedford
Campus" and also identified as NB-1, NB-2, NB-3, NB-4, NB Wastewater and NB-6
(including any portion sub-captioned as NB-6 (11X) and previously designated by
the Company as not a Principal Property), but not including the real property
located at John Vertrente Blvd., New Bedford, Massachusetts, previously
mortgaged as one of the Owned Properties, and (b) the real property located at
1265 Main Street, Waltham, Massachusetts, referred to as the "Waltham Main
Street Campus".

         "PRINCIPAL PROPERTY MORTGAGES" means, collectively, Mortgages,
Assignments of Leases and Rents, Security Agreements and Fixture Filings to be
dated on or about August 10, 2001, pursuant to which the Company will mortgage
the Principal Properties, the lien of such Principal Property Mortgages to be
for the equal and ratable benefit of the Secured Parties, the holders of the
Notes and the lenders under the UK Credit Agreement and such Principal Property
Mortgages each otherwise to be in form and substance satisfactory to the
Administrative Agent.

         "UK WAIVER" means, collectively, the Amendment and Waiver Agreements
dated March 26, 2001, May 15, 2001, July 12, 2001 and August 10, 2001, relating
to the UK Credit Agreement.

                                       2
<PAGE>

         SECTION 2. EXTENSION AND OTHER CHANGES TO TERMS OF THE EXISTING WAIVER.
The terms of the Existing Waiver are amended as follows.

         (a) The definition of "Waiver Availability Limit" set forth in the
First Supplement and amended in the Second Supplement and the Third Supplement
is further amended to read as follows:

                  "WAIVER AVAILABILITY LIMIT" means (a) initially, $350,000,000;
         (b) on and after the closing of the Sale, $316,000,000; and (c) on and
         after August 14, 2001, $326,000,000; PROVIDED that (i) on each date on
         which the Company makes a payment of rent pursuant to the Reservoir
         Site Lease in accordance with Schedule 1 attached to the Third
         Supplement, each of the amounts specified in clauses (b) and (c) shall
         automatically be increased by the amount of such payment (rounded
         downwards to the nearest multiple of $100,000), PROVIDED that the
         aggregate amount of increase pursuant to this clause (i) shall not
         exceed $7,000,000, and (ii) on each date on which the Company receives
         (x) payment of any contingent purchase price payment from the Buyer as
         contemplated by the Purchase and Sale Agreement, (y) a return of any
         portion of its security deposit under the Reservoir Site Lease
         (including by way of refund of any funds securing a letter of credit
         issued for its account for such purpose or payment of a deferred
         portion of the purchase price held in lieu of a cash security deposit)
         or (z) a return of any portion of the funds securing the Company's
         obligations under the letter of credit referred to in the DPW
         Memorandum, each of the amounts specified in clauses (b) and (c) shall
         automatically be decreased by the amount of such payment or return
         (rounded upwards to the nearest multiple of $100,000).

         The Lenders acknowledge and agree that a number of the payments of rent
under the Reservoir Site Lease referred to above have already been made, and
that such payments, as well as any future payments, are to be taken into account
in determining as of any day the actual amount in effect under clauses (b) and
(c) above.

         The Company acknowledges and agrees that references in this definition
to periods after the Waiver Expiry Time are solely for purposes of memorializing
the Company's agreement with the Lenders on the subject of availability and
paydown of Loans under the Credit Agreement in such periods, and, as set forth
in Section 3(c) of the Basic Waiver, the Lenders are under no obligation to
extend, and in their sole and absolute discretion may refuse to extend, the
Waiver beyond the Waiver Expiry Time.

         The Company further acknowledges and agrees that the willingness of the
Required Lenders to grant the amendments to the Waiver made hereby, and, INTER
ALIA, increase the Waiver Availability Limit by $10,000,000 in excess of the
principal amounts of Loans that the Company would otherwise be entitled to

                                       3
<PAGE>

request, is expressly in exchange for the granting of Liens on additional
property pursuant to the Principal Property Mortgages.

         Any references elsewhere in the Existing Waiver that refer to further
reductions in amount levels in this definition shall mean reductions from the
amount levels as amended by this subsection (a).

         (b) The definition of "Cash Forecast" set forth in the Second
Supplement, which was amended by the Third Supplement, is further amended to
read as follows:

                  "CASH FORECAST" means the "Domestic Receipts and Disbursements
         Forecast" attached to the Company's letter to the Administrative Agent
         dated August 10, 2001 and covering the period from the week ending
         August 10, 2001 through the week ending November 16, 2001, and showing
         forecast cash receipts and disbursements of the Company and its
         Domestic Subsidiaries (other than in respect of the principal amount of
         any Loans, but including proceeds of asset dispositions) weekly, the
         net difference (whether positive or negative, referred to herein as
         "cash flow") and forecast cumulative net cash flow from the beginning
         of such period through each succeeding week.

         (c) In clause (a) of Section 3 of the Basic Waiver, as amended in the
Third Supplement, each of the references to "the June 29 Meeting Materials" is
replaced with a reference to "the Company Information" and the reference to
"Section 10 of the Third Supplement" is replaced with a reference to "Section 8
of the Fourth Supplement". In addition, the following new sentence is added at
the end of clause (a) of Section 3:

                  The Lenders party hereto also waive (including for purposes of
         clause (c) of Section 3.03 of the Credit Agreement) any Default arising
         as a result of (x) the representation and warranty contained in Section
         4(b) of the Security Agreement being incorrect on account of one or
         more Foreign Subsidiaries and one or more Domestic Subsidiaries (none
         of which are Material Domestic Subsidiaries) not being listed on
         Schedule 1 to the Security Agreement or (y) the Company having failed
         to deliver the certificates representing the ownership interest in one
         or more Foreign Subsidiaries or one or more Domestic Subsidiaries (none
         of which are Material Domestic Subsidiaries).

         (d) Clause (b) of Section 3 of the Basic Waiver, as amended in the
Third Supplement, is amended to read as follows:

                  (b) The foregoing waivers shall be effective solely for the
         period (the "WAIVER PERIOD") beginning on February 16, 2001 and ending
         at 5:00 P.M. (Eastern time) on November 15, 2001 or such earlier time
         as

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         is determined pursuant to Section 8 of this Waiver (the "WAIVER EXPIRY
         TIME").

         (e) The first paragraph of Section 4 of the Basic Waiver is amended to
read as follows:

                  The Company agrees that during the period from the date hereof
         until 5:30 P.M. (Eastern time) on November 15, 2001 it will not give
         any Notice of Borrowing, and the Lenders shall have no obligation to
         fund any Borrowing of Loans, unless such Borrowing is in accordance
         with the provisions of this Section 4 (and otherwise in compliance with
         this Waiver and the Credit Agreement as modified hereby).

         (f) The reference to "$5 million" in the fourth line of Section 6(a) of
the Second Supplement, having previously been amended to "$7.5 million" in the
Third Supplement, is further amended to read "$10.0 million".

         (g) The body of Section 6 of the Third Supplement is replaced with the
following:

                  The Company agrees to prepare and deliver to the
         Administrative Agent (with copies for each of the Lenders), promptly
         and in any event no later than August 24, 2001, a revised operating
         plan for the Fiscal Year 2001, which (x) shall be of comparable scope
         and level of detail as the "Operating Plan" referred to in the Second
         Supplement and (y) include projections and financial and other
         information that are not materially more negative, taken as a whole,
         than the projections and financial and other information contained in
         the Company Information.

         SECTION 3. PRINCIPAL PROPERTY MORTGAGES. The Company shall deliver to
the Collateral Agent no later than August 10, 2001 executed Principal Property
Mortgages, together with appropriate UCC forms for related fixture filings. The
Company agrees that it shall pay or provide for the payment of all costs and
expenses in connection with the granting, perfecting, recording and maintenance
of the Liens created by the Principal Property Mortgages, including the
preparation, execution, delivery, recordation or filing of the Principal
Property Mortgages or any related other documents that the Administrative Agent
may reasonably request in connection therewith. The Company also agrees that (a)
it shall as promptly as practical deliver to the Administrative Agent (after the
filing of the Principal Property Mortgages) such surveys, title commitments (but
not title insurance) and other documents as the Administrative Agent may
reasonably request relating to the creation and perfection and due recordation
of, and corporate authority for and validity of, the Principal Property
Mortgages, the name of the legal owner of the Principal Properties and the
accuracy of the legal description thereof, and any other matters relevant
thereto, all in form and substance reasonably satisfactory to the Administrative
Agent, and (b) promptly after the Principal Property Mortgages (and related UCC
forms) have been

                                       5
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recorded or filed, it shall deliver to the Collateral Agent evidence of such
recordations and filings.

         The Lenders party hereto acknowledge that the Principal Properties
include the parcel in New Bedford, Massachusetts identified as "NB-6(11X),"
which pursuant to Section 6(b) of the First Supplement was to have been
mortgaged in favor of the Secured Parties after the Company subdivided the
larger parcel of which it is a part, and hereby waive the requirements of
Section 6(b) of the First Supplement.

         SECTION 4. CAPITAL EXPENDITURE COVENANT. Consolidated Capital
Expenditures will not, for each period beginning on January 1, 2001 and ending
on the last day of a fiscal month specified below, exceed the amount specified
for such fiscal month below:

                 FISCAL MONTH                    AMOUNT
                 August, 2001                    $53,200,000
                 September, 2001                 $61,200,000
                 October, 2001                   $68,800,000

         SECTION 5. OTHER CHANGES TO THE TERMS OF THE CREDIT AGREEMENT. (a)
Section 5.12 of the Credit Agreement is amended as follows:

                  (i) A new clause (l) is inserted following existing clause (k)
         and before existing clause (l), to read as follows: "(l) Liens (A)
         created by the Principal Property Mortgages and (B) Liens in favor of
         the holders of the Notes (or the Trustee on their behalf) on any
         Equipment (as defined in the Security Agreement) located at any
         Principal Property; PROVIDED that any Liens pursuant to this clause (B)
         must be junior in priority to the Liens securing the Secured
         Obligations and otherwise subject to terms and conditions satisfactory
         to the Administrative Agent;"

                  (ii) Existing clause (l) is renumbered as clause (m).

                  (iii) The two occurrences of "clause (b), (d) or (e) above" in
         the third and fifth lines of the final paragraph of Section 5.12 are
         amended to read "clause (b), (d), (e) or (l) above".

         (b) The Company or any other Lien Grantor may from time to time sell,
transfer or otherwise dispose of any real estate assets that constitute
"Additional Collateral" as defined in the Security Agreement (which, for these
purposes, does not include the Principal Properties), without any requirement to
comply with Section 5.15 or 2.17 of the Credit Agreement, provided that the
gross cash proceeds of any such disposition must be at least equal to the fair
market

                                       6
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value of the assets being disposed of. Concurrently with making any such
disposition, the Company shall deliver to the Administrative Agent a certificate
of its chief financial officer or treasurer describing in reasonable detail the
terms of such disposition and the assets being disposed of and stating the fair
market value of such assets and the Net Cash Proceeds of such disposition. The
Security Interests in such assets under the Collateral Documents shall terminate
automatically upon any such disposition, and the Collateral Agent is authorized
and directed to execute such releases and similar instruments as such Lien
Grantor or the Company may reasonably request to evidence the release of such
assets from the lien of the Collateral Documents. Concurrently with the
consummation of any such disposition, the amount levels in the definition of
Waiver Availability Limit shall automatically be decreased by 100% of the
related Net Cash Proceeds (rounded upwards to the nearest multiple of $100,000).
The Net Cash Proceeds of any such disposition shall be concurrently applied to
make any prepayment of Loans required by Section 4(d) of the Waiver or Section
3(b) of the First Supplement (as such requirements apply after giving effect to
the receipt of such Net Cash Proceeds).

         SECTION 6. FINANCING DOCUMENT. The Company agrees that this Supplement
shall be considered a "Financing Document" for all purposes of the Credit
Agreement, including without limitation clause (e) of Section 6.01 thereof.

         SECTION 7. RELEASE OF BANK LIABILITY. The Company, for itself and on
behalf of its affiliated entities, successors, assigns and legal representatives
(the "COMPANY PARTIES"), jointly and severally releases, acquits and forever
discharges the Administrative Agent, the Collateral Agent, the Co-Agent and each
Lender (collectively, the "BANK PARTIES"), and their respective subsidiaries,
parents, affiliates, officers, directors, employees, agents, attorneys,
successors and assigns, both present and former (collectively, the "BANKS'
AFFILIATES") from any and all manner of actions, causes of action, suits, debts,
controversies, damages, judgments, executions, claims and demands whatsoever,
asserted or unasserted, in contract, tort, law or equity which the Company or
any other Company Party has or may have against any of the Bank Parties and/or
the Banks' Affiliates by reason of any action, failure to act, matter or thing
whatsoever arising from or based on facts occurring prior to the date hereof,
including but not limited to any claim or defense that relates to, in whole or
in part, directly or indirectly, (i) the making or administration of the Loans,
including without limitation, any such claims and defenses based on fraud,
mistake, duress, usury or misrepresentation, or any other claim based on
so-called "lender liability theories", (ii) any covenants, agreements, duties or
obligations set forth in the Financing Documents, (iii) any actions or omissions
of any of the Bank Parties and/or the Banks' Affiliates in connection with the
initiation or continuing exercise of any right or remedy contained in the
Financing Documents or at law or in equity, (iv) lost profits, (v) loss of
business opportunity, (vi) increased financing costs, (vii) increased legal or
other administrative fees, or (viii) damages to business reputation.

                                       7
<PAGE>

         SECTION 8. REPRESENTATIONS OF THE COMPANY. The Company represents and
warrants that (i) the representations and warranties of the Company set forth in
Article 4 of the Credit Agreement will be true on and as of the Fourth
Supplement Effective Date and (ii) no Default will have occurred and be
continuing on such date, except in any case as expressly contemplated to be
waived by this Supplement and the Existing Waiver. Without limiting the
generality of the foregoing, the Company further represents and warrants that
all information (other than projections) heretofore furnished by the Company to
the Administrative Agent or any Lender for purposes of or in connection with
this Supplement does not, and all such information hereafter furnished by the
Company to the Administrative Agent or any Lender will not, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were or will be made, not misleading, and all projections included in any
such information will be based upon good faith estimates and assumptions
believed by the Company's senior management to be reasonable at the time
delivered, and at the time delivered represent senior management's reasonable
best estimate of the future performance of the operations of the Company and its
Subsidiaries.

         SECTION 9. CONSENT BY GUARANTORS. By its signature below, each
Guarantor (as defined in the Subsidiary Guaranty Agreement) hereby consents to
this Supplement, and acknowledges that this Supplement shall not alter, release,
discharge or otherwise affect any of its obligations under the Credit Agreement
or any Financing Document, and hereby ratifies and confirms all of the Financing
Documents to which it is a party.

         SECTION 10. GOVERNING LAW. This Supplement shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 11. COUNTERPARTS. This Supplement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

         SECTION 12. EFFECTIVENESS. (a) This Supplement shall become effective
as of the date hereof on the date (the "FOURTH SUPPLEMENT EFFECTIVE DATE") when
the Administrative Agent shall have received:

                  (i) from each of the Company, each Guarantor and the Required
         Lenders a counterpart hereof signed by such party or facsimile or other
         written confirmation (in form satisfactory to the Administrative Agent)
         that such party has signed a counterpart hereof;

                  (ii) confirmation that the Company has paid the invoice of the
         Collateral Agent delivered on August 9, 2001 and all statements of
         Davis Polk & Wardwell, special counsel for the Administrative Agent,
         and Policano and Manzo, financial advisors, that have been rendered to
         the Company at least one Domestic Business Day prior to the Fourth

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         Supplement Effective Date in respect of this Supplement or other Credit
         Agreement matters; and

                  (iii) evidence satisfactory to it that the lenders under the
         UK Credit Agreement shall have waived any defaults thereunder until a
         date no earlier than November 15, 2001, pursuant to a waiver containing
         terms that, taken as a whole, are neither more favorable to those
         lenders nor more restrictive or burdensome to the Company than
         amendments or waivers previously or concurrently made to the Credit
         Agreement.

         (b) No later than the first Domestic Business Day after the Fourth
Supplement Effective Date, the Company shall pay the Administrative Agent, in
immediately available funds, a waiver fee in an amount equal to $100,000, to be
allocated among each Lender that has evidenced its agreement hereto as provided
in Section 12(a) by 5:00 P.M. (Eastern time) on the later of (x) August 9, 2001
and (y) the date the Administrative Agent issues a notice to the Lenders saying
this Supplement has become effective, in proportion to its Commitment (as of the
opening of business on the date hereof).

                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed as of the date first above written.

                                    POLAROID CORPORATION

                                    By: /s/ William L. Flaherty
                                        ----------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer

                                    INNER CITY, INC.

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    POLAROID ASIA PACIFIC LIMITED

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    POLAROID LATIN AMERICA

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    POLAROID DIGITAL SOLUTIONS, INC.

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                       10
<PAGE>

                                    POLAROID EYEWEAR, INC.

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    POLAROID ID SYSTEMS, INC.

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    POLAROID MALAYSIA LIMITED

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    PRD CAPITAL INC.

                                    By: /s/ William L. Flaherty
                                        --------------------------------
                                        Title: Executive Vice President
                                               and Chief Financial Officer
                                               and Director

                                    MORGAN GUARANTY TRUST
                                       COMPANY OF NEW YORK, as
                                       Administrative Agent

                                    By: /s/ Kimberly L. Turner
                                        ---------------------------
                                        Title: Vice President

                                       11
<PAGE>

                                    MORGAN GUARANTY TRUST
                                    COMPANY OF NEW YORK

                                    By: /s/ Kimberly L. Turner
                                        ---------------------------
                                        Title: Vice President

                                    ABN AMRO BANK N.V.

                                    By: /s/ William J. Teresky, Jr.
                                        ---------------------------
                                        Title: Group Vice President

                                    By: /s/ Perker Douglas
                                        ---------------------------
                                        Title: Group Vice President

                                    TRANSAMERICA BUSINESS CREDIT
                                       CORPORATION

                                    By: /s/ Robert Capasso
                                        ----------------------------
                                        Title: Senior Vice President

                                    DEUTSCHE BANK AG, NEW YORK
                                       AND/OR CAYMAN ISLANDS
                                       BRANCHES

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    BANK ONE, NA

                                    By: /s/ Phillip D. Martin
                                        ----------------------------
                                        Title: Senior Vice President

                                       12
<PAGE>

                                    SENIOR DEBT PORTFOLIO

                                    By: Boston Management and Research,
                                        as investment advisor

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    SUMITOMO-MITSUI BANKING
                                       CORPORATION

                                    By: /s/ Leo A. Pagarigan
                                        ---------------------------
                                        Title: Vice President

                                    FLEET NATIONAL BANK

                                    By: /s/ Robert J. Riley
                                        ----------------------------
                                        Title: Senior Vice President

                                    MELLON BANK, N.A.

                                    By: /s/ Gary A. Best
                                        ---------------------------
                                        Title: Vice President

                                    TEXTRON FINANCIAL CORPORATION

                                    By: /s/ Matthew J. Colgan
                                        ---------------------------
                                        Title: Director

                                       13
<PAGE>

                                    PNC BANK, NATIONAL ASSOCIATION

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    FOOTHILL INCOME TRUST, L.P.

                                    By: /s/ Jeff Nikora
                                        ---------------------------
                                        Title: Managing Member

                                    ERSTE BANK NEW YORK

                                    By: /s/ John S. Runnion
                                        ---------------------------
                                        Title: Managing Director

                                    By: /s/ Robert Suehnholz
                                        ---------------------------
                                        Title: First Vice President

                                    GENERAL ELECTRIC CAPITAL
                                       CORPORATION

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    WINGATE CAPITAL, LTD.

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    BARCLAYS BANK PLC

                                    By: /s/
                                        ---------------------------
                                        Title:

                                       14
<PAGE>

                                    CERBERUS PARTNERS, L.P.

                                    By: /s/ Kevin Genda
                                        ---------------------------
                                        Title: Managing Director

                                    LEHMAN COMMERCIAL PAPER INC.

                                    By: /s/
                                        ---------------------------
                                        Title:

                                    J.P. MORGAN SECURITIES INC., as agent
                                       for The Chase Manhattan Bank

                                    By: /s/ Eric S. Rosen
                                        ---------------------------
                                        Title: Authorized Signatory

                                       15EXHIBIT 10.2

To: Polaroid Corporation; and
    Polaroid (U.K.) Limited

Date: 9 August 2001

Dear Sirs

AMENDMENT AND WAIVER AGREEMENT RELATING TO FACILITY AGREEMENT DATED
3 AUGUST 1999

1.      We refer to (i) the Amendment and Waiver Agreement (the "FIRST AMENDMENT
        AND WAIVER AGREEMENT") dated 26 March 2001; (ii) the letter entered into
        on 15 May 2001 which was supplemental to the First Amendment and Waiver
        Agreement (the "FIRST SUPPLEMENTAL LETTER"); and (iii) the Amendment and
        Waiver Agreement dated 12 July 2001 (the "SECOND AMENDMENT AND WAIVER
        AGREEMENT") each entered into between Polaroid Corporation, Polaroid
        (UK) Limited, Deutsche Banc Alex Brown Inc., ABN AMRO Bank N.V. and
        others in relation to the Facility Agreement dated 3 August 1999 between
        such parties and referred to in the First Amendment and Waiver Agreement
        as the UK Facility Agreement.

2.      Terms and expressions defined in the First Amendment and Waiver
        Agreement, the First Supplemental Letter, the Second Amendment and
        Waiver Agreement and the UK Facility Agreement shall, unless otherwise
        defined herein, bear the same meanings in this letter PROVIDED THAT,
        together, the First Amendment and Waiver Agreement, the First
        Supplemental Letter and the Second Amendment and Waiver Agreement shall
        be referred to as the "EXISTING WAIVER AGREEMENTS" and Clause 5 of the
        Second Amendment and Waiver Agreement shall be construed accordingly.

        This letter is supplemental to the Second Amendment and Waiver Agreement
        and shall be referred to as the "SECOND SUPPLEMENTAL LETTER".

3.      Subject to the terms hereof, we hereby agree to extend the waiver
        referred to in the Second Amendment and Waiver Agreement so that the
        Waiver Expiry Time referred to therein shall be the earlier of (i) 5.00
        p.m. (New York City time) on 15 November 2001 and (ii) such earlier date
        as may be determined pursuant to the other provisions of the Existing
        Waiver Agreements including Clause 5 of the Second Amendment and Waiver
        Agreement. Accordingly, the Waiver Period referred to in the Second
        Amendment and Waiver Agreement shall be construed as being the period
        beginning on February 16, 2001 and ending at such Waiver Expiry Time.

4.      In addition we hereby agree to waive, during the Waiver Period any
        default which may arise under the UK Facility Agreement or the Existing
        Waiver Agreements solely as a result of the Guarantor's failure to have
        listed and delivered the stock certificates required to be delivered by
        it pursuant to the US Facility Agreement (as amended and restated from
        time to time).

<PAGE>

5.      The Guarantor agrees that the cumulative net cash flow for any Weekly
        Period, as reported in the Weekly Report, will not be less than the
        cumulative net cash flow projected for such Weekly Period in the Cash
        Forecast by more than $10 million ("Cash Forecast" having the meaning
        ascribed to it in the Fourth Supplement to Amended and Restated
        Amendment No.4 to and Waiver No.1 under Amended and Restated Credit
        Agreement) and paragraph (vii) of the First Supplemental Letter shall be
        amended accordingly.

6.      The Guarantor agrees that Consolidated Capital Expenditures (as defined
        in the US Facility Agreement) will not, for each period beginning on 1
        January 2001 and ending on the last day of a fiscal month specified
        below, exceed the amount specified for such fiscal month below:

        FISCAL MONTH                 AMOUNT
        ------------                 ------
        July 2001                    $45,200,000
        August 2001                  $53,200,000
        September 2001               $61,200,000
        October 2001                 $68,800,000

7.      Clause 2.1 and Clause 4.1(d) of the Second Amendment and Waiver
        Agreement shall each be amended so that the words "and the presentation
        made by the Guarantor during a conference call with the lenders under
        the US Facility Agreement on August 7 2001" shall be added at the very
        end of those clauses after the words "June 29 Meeting Materials".

8.      The Guarantor shall comply in all respects with its obligations under
        Section 3 (PRINCIPAL PROPERTY MORTGAGES) of the Fourth Supplement to
        Amended and Restated Amendment No. 4 and Waiver No. 1 under Amended and
        Restated Credit Agreement (dated on or about the date hereof and waiving
        and amending certain provisions of the US Facility Agreement).

9.      Clauses 10, 11, 13 and 14 of the Second Amendment and Waiver Agreement
        shall be deemed incorporated, MUTATIS MUTANDIS, into this letter but so
        that and all references therein to "this Agreement" shall be construed
        as being references to this letter.

10.     All references in the Second Amendment and Waiver Agreement to "herein",
        "hereof", "hereunder", "hereby", "this Agreement", "the waivers granted
        hereby", "the waiver referred to in this Agreement", "the waiver
        contained herein", "this waiver" and each other similar reference
        contained in the Amendment and Waiver Agreement shall be construed as
        being references to the Amendment and Waiver Agreement as amended by
        this Second Supplemental Letter.

11.     All other terms of the UK Facility Agreement and the Existing Waiver
        Agreements shall, save as amended pursuant to this letter, remain in
        full force and effect and the terms of the UK Facility Agreement shall
        be read as one with the Existing Waiver Agreements and this Second
        Supplemental Letter.

<PAGE>

12.     Each of the Borrower and the Guarantor hereby repeat the representations
        and warranties set out in Clause 8 of the Second Amendment and Waiver
        Agreement as if references therein to "the date hereof" were references
        to the date of this Second Supplemental Letter and as if references to
        the "Effective Date" were references to the date that this Second
        Supplemental Letter becomes effective in accordance with its terms.

13.     By its signature below, the Guarantor consents to the terms of this
        letter, and acknowledges that this letter shall not alter, release,
        discharge or otherwise affect any of its obligations under the UK
        Facility Agreement or any Finance Document and hereby ratifies and
        confirms all of the Finance Documents to which it is a party.

14.     Each of the Guarantor and the Borrower confirm, by execution of this
        letter, that all corporate or other action or steps required to
        authorise its entry into, performance and delivery of each of the
        Existing Waiver Agreements and this Second Supplemental Letter and the
        transactions contemplated thereby have been duly taken.

15.     This waiver shall become effective in accordance with the terms herein
        on the date when Deutsche Bank AG, in its capacity as Agent under the UK
        Facility Agreement, shall have received the following:

        (i)    a counterpart  hereof  signed by each of the parties  hereto or a
               facsimile  evidencing  that such party has  signed a  counterpart
               hereof;

        (ii)   confirmation that the Guarantor has paid all fees of the Agent
               and other costs then payable in relation to the Finance Documents
               (including all legal fees then outstanding); and

        (iii)  evidence satisfactory to it that the Lenders under the US
               Facility Agreement shall have waived any defaults under the US
               Facility Agreement until a date no earlier than 5 p.m. (New York
               City time) on 15 November 2001 pursuant to a waiver containing
               terms that, taken as a whole, are neither more favourable to
               those lenders nor more restrictive or burdensome to the Guarantor
               or the Borrower than the terms hereof.

16.     Each of the Guarantor and the Borrower understand and accept:

        (i)    the interim nature of the waiver provided hereby, and that the
               Lenders have given no assurances that they will, nor are they
               obliged to, extend the waiver provided hereby or provide other
               waivers under or amendments to the UK Facility Agreement or any
               other Finance Document;

        (ii)   that except as expressly set forth herein, the waiver contained
               herein shall not constitute a waiver or amendment of any term or
               condition of the UK Facility Agreement on any other Finance
               Document and all such terms and conditions shall remain in full
               force and effect and are hereby ratified and confirmed in all
               respects;

        (iii)  that no failure or delay by the Lenders or any one of them in
               exercising any right, power or privilege under any Finance
               Document during the period prior to the date hereof or during the
               period the waiver referred to in this Agreement is in effect
               shall operate as a waiver thereof;

<PAGE>

        (iv)   that the Lenders are under no obligation to extend, and in their
               sole and absolute discretion may refuse to extend, the waiver
               referred to in this Agreement beyond the Waiver Expiry Time; and

        (v)    that if following the Waiver Expiry Time (a) the Guarantor is not
               in compliance with Section 5.07 or 5.08(a) of the US Facility
               Agreement or has failed to make the payments of interest referred
               to in paragraph (b) of Clause 2.1 of the Second Amendment and
               Waiver Agreement or if the Guarantor or Borrower makes a
               representation under the UK Facility Agreement which is incorrect
               as a consequence of the circumstances described in the June 29
               Meeting Materials and (b) the Lenders do not extend the waiver
               provided hereby or take other action in respect of any such
               failure, a Termination Event will automatically exist immediately
               under the UK Facility Agreement following the Waiver Expiry Time,
               without the requirement of any further action by any of the
               Beneficiaries.

17.     Each of the Guarantor and the Borrower, for itself and on behalf of
        its affiliated entities, successors and assigns (the "COMPANY
        PARTIES"), jointly and severally releases, acquits and forever
        discharges, each of the Beneficiaries and their respective
        subsidiaries, parents, affiliates, officers, directors, employees,
        agents, attorneys, successors and assigns, both present and former
        (collectively, the "BENEFICIARIES' AFFILIATES") from any and all
        manner of actions, causes of action, suits, debts, damages, judgments,
        executions, claims and demands whatsoever, asserted or unasserted, in
        contract, tort, law or equity which any Company Party has or may have
        against any of the Beneficiaries and/or the Beneficiaries' Affiliates
        by reason of any action, failure to act, matter or thing whatsoever
        arising from or based on facts occurring prior to the date hereof,
        including but not limited to any claim or defense that relates to, in
        whole or in part, directly or indirectly, (i) the making or
        administration of the Loan, including without limitation, any such
        claims and defenses based on fraud, mistake, duress, usury or
        misrepresentation or otherwise (ii) any covenants, agreements, duties
        or obligations set forth in the Finance Documents, (iii) any actions
        or omissions of any of the Beneficiaries' Affiliates and/or the
        Beneficiaries in connection with the initiation or continuing exercise
        of any right or remedy contained in the Finance Documents or at law or
        in equity, (iv) lost profits, (v) loss of business opportunity, (vi)
        increased financing costs, (vii) increased legal or other
        administrative fees, or (viii) damages to business reputation.

18.     Each of the Borrower and the Guarantor agree that this letter shall be
        considered a "Finance Document" for all purposes of the UK Facility
        Agreement.

19.     This letter shall be governed by and construed in accordance with
        English law.

20.     Please indicate your agreement to the foregoing terms of this letter by
        executing a counterpart hereof in the space provided below and returning
        it to the Agent at the address notified by it to you.

<PAGE>

For and on behalf of

CO-ARRANGERS AND DOCUMENTATION AGENT

DEUTSCHE BANC ALEX BROWN INC.

as Co-Arranger

By:     /S/ KIETH C. BRAUN
        ----------------------------

Title:  Vice President

By:     /S/ STEVEN A. COHEN
        ----------------------------

Title:  Director

ABN AMRO BANK N.V.

as Co-Arranger and Documentation Agent

By:     /S/ WILLIAM J. TERESKY, JR.
        ----------------------------

Title:  Group Vice President

By:     /S/ NEIL J. BIVONA
        ----------------------------

Title:  Group Vice President

LENDERS

ABN AMRO BANK N.V.

By:     /S/ WILLIAM J. TERESKY, JR.
        ----------------------------

Title:  Group Vice President

By:     /S/ NEIL J. BIVONA
        ----------------------------

Title:  Group Vice President

<PAGE>

DEUTSCHE BANK A.G., LONDON BRANCH

By:     /S/ KIETH C. BRAUN
        ----------------------------

Title:  Vice President

By:     /S/ STEVEN A. COHEN
        ----------------------------

Title:  Director

DEUTSCHE BANK A.G., AMSTERDAM BRANCH

By:     /S/ KIETH C. BRAUN
        ----------------------------

Title:  Vice President

By:     /S/ STEVEN A. COHEN
        ----------------------------

Title:  Director

<PAGE>

                                       Agreed and accepted

                                       POLAROID CORPORATION

                                       By: /S/ WILLIAM L. FLAHERTY
                                           --------------------------------

                                       Title: Executive Vice President
                                              and Chief Financial Officer

                                       Date:  August 9, 2001

                                       POLAROID (U.K.) LIMITED

                                       By: /S/ WILLIAM L. FLAHERTY
                                           --------------------------------

                                       Title: Director

                                       Date: August 9, 2001

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