Document:

<PAGE>

                                                                    EXHIBIT 10.7
================================================================================

                    MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

                           dated as of March 28, 2001

                                      from

                              POLAROID CORPORATION,
                                 the Mortgagor,

                                       to

                   MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                              as Collateral Agent,
                                  the Mortgagee

                                    PROPERTY:

                       850, 910, 916 and 920 Winter Street
                                 City of Waltham
                               County of Middlesex
                          Commonwealth of Massachusetts

================================================================================

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES. THIS INSTRUMENT
ALSO SECURES FUTURE ADVANCES.

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
RECITALS.......................................................................1

                                GRANTING CLAUSES

GRANTING CLAUSE I.LAND.........................................................3
GRANTING CLAUSE II.IMPROVEMENTS................................................3
GRANTING CLAUSE III.EQUIPMENT. ................................................3
GRANTING CLAUSE IV.APPURTENANT RIGHTS. ........................................4
GRANTING CLAUSE V.AGREEMENTS. .................................................4
GRANTING CLAUSE VI.LEASES. ....................................................5
GRANTING CLAUSE VII.RENTS, ISSUES AND PROFITS. ................................5
GRANTING CLAUSE VIII.PERMITS. .................................................5
Granting Clause IX.BOOKS AND RECORDS...........................................5
Granting Clause X.INTANGIBLE PROPERTY..........................................6
GRANTING CLAUSE XI.PROCEEDS AND AWARDS. .......................................6
GRANTING CLAUSE XII.ADDITIONAL PROPERTY. ......................................6

                    ARTICLE 1  DEFINITIONS AND INTERPRETATION

SECTION 1.01.  DEFINITIONS.....................................................7
SECTION 1.02.  INTERPRETATION.................................................10
SECTION 1.03.  RESOLUTION OF DRAFTING AMBIGUITIES.............................11

           ARTICLE 2 CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGEE

SECTION 2.01.  TITLE, AUTHORITY AND EFFECTIVENESS.............................11
SECTION 2.02.  SECURED OBLIGATIONS............................................13
SECTION 2.03.  IMPOSITIONS....................................................13
SECTION 2.04.  LEGAL AND INSURANCE REQUIREMENTS...............................13
SECTION 2.05.  STATUS AND CARE OF THE PROPERTY................................14
SECTION 2.06.  PERMITTED CONTESTS.............................................14
SECTION 2.07.  LIENS..........................................................15
SECTION 2.08.  TRANSFER.......................................................15

                 ARTICLE 3  INSURANCE, CASUALTY AND CONDEMNATION

SECTION 3.01.  INSURANCE......................................................16
SECTION 3.02.  CASUALTY AND CONDEMNATION......................................17
SECTION 3.03.  CASUALTY PROCEEDS..............................................18

<PAGE>

                      ARTICLE 4  CERTAIN SECURED OBLIGATIONS

SECTION 4.01.  REVOLVING LOANS, ETC...........................................19
SECTION 4.02.  INTEREST AFTER DEFAULT.........................................19
SECTION 4.03.  CHANGES IN THE LAWS REGARDING TAXATION.........................20
SECTION 4.04.  INDEMNIFICATION................................................20

                     ARTICLE 5  DEFAULTS, REMEDIES AND RIGHTS

SECTION 5.01.  EVENTS OF DEFAULT..............................................20
SECTION 5.02.  REMEDIES.......................................................21
SECTION 5.03.  WAIVERS BY THE MORTGAGOR.......................................24
SECTION 5.04.  JURISDICTION AND PROCESS.......................................24
SECTION 5.05.  SALES..........................................................25
SECTION 5.06.  PROCEEDS.......................................................26
SECTION 5.07.  ASSIGNMENT OF LEASES...........................................27
SECTION 5.08.  DEALING WITH THE MORTGAGED PROPERTY............................28
SECTION 5.09.  RIGHT OF ENTRY.................................................28
SECTION 5.10.  RIGHT TO PERFORM OBLIGATIONS...................................28

                 ARTICLE 6 SECURITY AGREEMENT AND FIXTURE FILING

SECTION 6.01.  SECURITY AGREEMENT.............................................29
SECTION 6.02.  FIXTURE FILING.................................................29

                             ARTICLE 7  MISCELLANEOUS

SECTION 7.01.  RELEASE OF MORTGAGED PROPERTY..................................30
SECTION 7.02.  CONCERNING THE MORTGAGEE.......................................31
SECTION 7.03.  NOTICES........................................................31
SECTION 7.04.  AMENDMENTS IN WRITING..........................................32
SECTION 7.05.  SEVERABILITY...................................................32
SECTION 7.06.  BINDING EFFECT.................................................32
SECTION 7.07.  GOVERNING LAW..................................................32
SECTION 7.08.  WAIVER OF TRIAL BY JURY........................................32
SECTION 7.09.  SUBMISSION TO JURISDICTION.....................................33
SECTION 7.10.  COUNTERPARTS...................................................33

EXHIBIT A PROPERTY DESCRIPTION...............................................A-1
EXHIBIT B PERMITTED ENCUMBRANCES.............................................B-1
EXHIBIT C RECORDINGS AND FILINGS.............................................C-1

<PAGE>

                    MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

         THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (this "Mortgage") is dated as of March __, 2001 by POLAROID
CORPORATION, a Delaware corporation having an address at 784 Memorial Drive,
Cambridge, MA 02139, Attention: Benjamin C. Byrd III, Vice President (the
"MORTGAGOR"), to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking
corporation having an address at c/o JP Morgan Services Inc., 500 Stanton
Christiana Road, Newark, DE 19713, Attention: Mark Connor, as Collateral Agent
(the "MORTGAGEE").

                                  WITNESSETH:1
                                    RECITALS

         A. CREDIT AGREEMENT. Reference is hereby made to the Amended and
Restated Credit Agreement dated as of December 11, 1998, as heretofore modified
by Amendment No. 1 to Amended and Restated Credit Agreement dated as of March
31, 1999, Amendment No. 2 to Amended and Restated Credit Agreement dated as of
September 10, 1999, Amendment No. 3 to Amended and Restated Credit Agreement
dated as of November 10, 2000, Amendment No. 4 to and Waiver No. 1 under Amended
and Restated Credit Agreement dated as of February 16, 2001, and Amended and
Restated Amendment No. 4 to and Waiver No. 1 under Amended and Restated Credit
Agreement dated as of March 21, 2001 ("WAIVER NO. 1") (collectively as hereafter
amended from time to time, the "CREDIT AGREEMENT") among the Mortgagor, as the
Company, the Lenders party thereto, Morgan Guaranty Trust Company of New York,
as the Administrative Agent and the Collateral Agent and Fleet National Bank
(f/k/a/ BankBoston, N.A.), as the Co-Agent. Pursuant to the Credit Agreement,
(i) the Mortgagor has obtained and may obtain from time to time hereafter
revolving Loans from the Lenders in an aggregate principal amount not to exceed
$350,000,000, which Loans are intended to be and are Secured Obligations for the
purposes of this Mortgage and the other Financing Documents; (ii) pursuant to
Section 2.16(a) of the Credit Agreement, the Mortgagor has designated and may
designate from time to time hereafter its obligations to banks or other
financial institutions (which may include one or more of the Lenders) in respect
of Additional Loans in an aggregate principal amount not to exceed $200,000,000
as additional Secured Obligations for the purposes

--------
     1Capitalized terms are defined in, or by reference in, Section 1.01.

<PAGE>

of this Mortgage and the other Financing Documents; (iii) pursuant to Section
2.16(c) of the Credit Agreement, has designated and may designate from time to
time hereafter its obligations with respect to (x) letters of credit, as to
which the aggregate actual and contingent obligations do not exceed $3,000,000,
(y) interest rate swap or other interest rate hedging agreements or (z) currency
swap agreements or other currency hedging agreements (which agreements referred
to in the foregoing clauses (y) and (z) are referred to as Hedging Agreements),
under which Hedging Agreements the aggregate outstanding notional amounts do not
exceed $50,000,000, as additional Secured Obligations for the purposes of this
Mortgage and the other Financing Documents; and (iv) pursuant to Section 2.16(d)
of the Credit Agreement, with the prior written consent of the Administrative
Agent, the Collateral Agent and the Super-Majority Lenders, may designate from
time to time hereafter other obligations of the Mortgagor (including obligations
with respect to letters of credit or Hedging Agreements not covered by the
foregoing clause (iii)) as additional Secured Obligations for the purposes of
this Mortgage and the other Financing Documents. The Loans are evidenced by
Notes.

         B. MORTGAGE. This Mortgage is being granted by the Mortgagor to the
Mortgagee pursuant to Section 6 of Waiver No. 1 to secure the due and punctual
payment, performance and observance of the following indebtedness, liabilities
and obligations, whether now or hereafter arising or incurred, or whether now or
hereafter owed or owing (collectively as the "SECURED OBLIGATIONS"):

         (i) all principal of all Loans outstanding from time to time under the
         Credit Agreement, all interest (including Post-Petition Interest) on
         such Loans and all other amounts (including fees and disbursements of
         counsel) now or hereafter payable by the Mortgagor pursuant to any
         Financing Document (including this Mortgage), (ii) if the Mortgagor
         designates loans from banks or other financial institutions as
         additional Secured Obligations, as permitted by Section 2.16(a) of the
         Credit Agreement, all principal of such loans, all interest (including
         Post-Petition Interest) on such loans and all other amounts (including
         fees and disbursements of counsel) now or hereafter payable by the
         Mortgagor with respect thereto, (iii) any other obligations designated
         by the Mortgagor as additional Secured Obligations pursuant to Section
         2.16 of the Credit Agreement.

         C. The maximum principal amount of Secured Obligations outstanding at
any time from time to time that may be secured by this Mortgage is $350,000,000,
PLUS the amount of the Secured Obligations under clauses (ii) and (iii) of the
definition of the term Secured Obligations (the "MAXIMUM SECURED AMOUNT"). The
Mortgagor hereby agrees that, notwithstanding anything to the contrary contained
in the Financing Documents, repayments of the Secured Obligations shall be
applied first to that portion of the Secured Obligations in excess of the
Maximum Secured Amount. The Mortgagor hereby further agrees that the aforesaid
limitation does not limit or otherwise derogate any of the rights or remedies of
the Lenders, the Administrative Agent or the Collateral Agent under any of the
other Financing Documents.

         D. The scheduled final maturity date of the latest to mature of the
Secured Obligations is December 31, 2001 under clause (i) of the definition of
the term Secured Obligations, unless such date is not a Euro-Dollar Business
Day, in which case such maturity date shall be the next succeeding Euro-Dollar
Business Day.

                                GRANTING CLAUSES

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of the Secured Obligations and intending to be bound
hereby, the Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, MORTGAGE,
ASSIGN, TRANSFER and WARRANT with MORTGAGE

                                       2
<PAGE>

COVENANTS to the Mortgagee and its successors as Collateral Agent, with power of
sale and right of entry as hereinafter provided, and (to the extent covered by
the UCC) does hereby GRANT and WARRANT to the Mortgagee and its successors as
Collateral Agent a continuing first security interest in and to, all of the
property and rights described in the following Granting Clauses (all of which
property and rights are collectively called the "MORTGAGED PROPERTY"), to wit:

GRANTING CLAUSE I.

         LAND. All estate, right, title and interest of the Mortgagor in, to,
under or derived from the lots, pieces, tracts or parcels of land located in the
City of Waltham, County of Middlesex, Commonwealth of Massachusetts, more
particularly described in Exhibit A (the "LAND").

GRANTING CLAUSE II.

         IMPROVEMENTS. All estate, right, title and interest of the Mortgagor
in, to, under or derived from all buildings, structures, facilities, systems,
equipment, fixtures and other improvements of every kind and description now or
hereafter located on or attached to the Land or the improvements thereon which
by the nature of their location thereon or attachment thereto or otherwise are
real property under applicable law, including all parking areas, roads,
driveways, walks, fences, walls, berms, landscaping, plantings, recreation
facilities, drainage facilities, lighting facilities and other site
improvements, all water, sanitary and storm sewer, drainage, electric, steam,
gas, telecommunications, cable and other utility equipment, systems, facilities
and fixtures, all plumbing, lighting, heating, ventilating, air-conditioning,
refrigerating, incinerating, compacting, fire protection, sprinkler,
surveillance, security, vacuum, cleaning, public address and communications
equipment, systems, facilities and fixtures, all elevators, escalators,
machinery, motors, boilers, stokers, furnaces, engines, pumps, compressors,
generators, dynamos, tanks, pipes, ducts, conduits, wires, cranes, scaffolds,
screens, awnings, shades, blinds, curtains, draperies, rugs, floor coverings,
partitions, walls, wall coverings, paintings, murals, sculptures, works of art
and other items of equipment, personal property and fixtures of every kind and
description which are real property under applicable law; and including all
materials intended for the construction, reconstruction, repair, replacement,
alteration, addition or improvement of or to such buildings, structures,
facilities, systems, equipment, fixtures and improvements, all of which
materials shall be deemed to be part of the Mortgaged Property to the full
extent of the interest of the Mortgagor therein immediately upon delivery
thereof on the Land and to be part of the improvements immediately upon their
incorporation therein (the foregoing being collectively the "IMPROVEMENTS").

GRANTING CLAUSE III.

         EQUIPMENT. All estate, right, title and interest of the Mortgagor in,
to, under or derived from all equipment, fixtures, chattels and articles of
personal property now or hereafter owned by the Mortgagor or in which the
Mortgagor now or hereafter has an interest, wherever situated, and now or
hereafter located on, attached to, contained in or used in connection with the
Land or Improvements which are not real property under applicable law, including
all stoves, ranges, ovens, washers, dryers, dishwashers, appliances, equipment,
furniture, furnishings, fittings, fixtures, utensils, tools, implements,
screens, awnings, shades, blinds, curtains, draperies, carpets,

                                       3
<PAGE>

rugs, floor coverings, partitions, walls, wall coverings, paintings, murals,
sculptures and works of art, all water, sanitary and storm sewer, drainage,
electric, steam, gas, telecommunications, cable, and other utility equipment,
systems and facilities, all plumbing, lighting, heating, ventilating,
air-conditioning, refrigerating, incinerating, compacting, fire protection,
sprinkler, surveillance, security, vacuum, cleaning, public address and
communications equipment, systems and facilities, all elevators, escalators,
machinery, motors, boilers, stokers, furnaces, engines, pumps, compressors,
generators, dynamos, tanks, pipes, ducts, conduits, all spare or component
parts, and all other items of equipment, systems, facilities, chattels and
articles of personal property owned by the Mortgagor or in which the Mortgagor
has an interest located on, attached to, contained in or used in connection with
the Land or Improvements which are not real property under applicable law (all
of the foregoing being hereinafter collectively called the "EQUIPMENT"; and the
Land, the Improvements and the Equipment being collectively called the
"PROPERTY"). If any of the Equipment under this Granting Clause is covered by an
equipment lease, title retention or security agreement, (i) the grant under this
Granting Clause (but not the definition of "Equipment" for the other purposes
hereof) excludes any Equipment which cannot be transferred or encumbered by the
Mortgagor without causing a termination of such agreement or default thereunder,
otherwise (ii) the grant under this Granting Clause includes all of the
Mortgagor's right, title and interest in, to and under such agreement, together
with the benefits of all deposits and payments now or hereafter made thereunder
by or on behalf of the Mortgagor, and subject to all of the terms and conditions
of such agreement and the liens and security interests thereunder.

GRANTING CLAUSE IV.

         APPURTENANT RIGHTS. All estate, right, title and interest of the
Mortgagor in, to, under or derived from all tenements, hereditaments and
appurtenances now or hereafter relating to the Property, all streets, roads,
sidewalks and alleys abutting the Land, all strips and gores within or adjoining
the Land, all land in the bed of any body of water adjacent to the Land, all
land adjoining the Land created by artificial means or by accretion, all air
space and rights to use air space above the Land; all development or similar
rights now or hereafter appurtenant to the Land, all rights of ingress and
egress now or hereafter appertaining to the Property, all easements, servitudes,
rights of way, alley, party wall, support, drainage, crop, timber, agricultural
and horticultural rights, oil, gas and other mineral rights, and water stock,
riparian and other water rights now or hereafter appertaining to the Property,
and other rights now or hereafter appertaining to the use and enjoyment of the
Property.

GRANTING CLAUSE V.

         AGREEMENTS. All estate, right, title and interest of the Mortgagor in,
to, under or derived from all Insurance Policies (including all unearned
premiums and dividends thereunder), guarantees and warranties now or hereafter
relating to the Property, all supply and service contracts for water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other
utilities now or hereafter relating to the Property and all other contracts and
contract rights now or hereafter relating to use and operation of the Property
(the foregoing being collectively called the "AGREEMENTS").

                                       4
<PAGE>

GRANTING CLAUSE VI.

         LEASES. All estate, right, title and interest of the Mortgagor in, to,
under and derived from all Leases now or hereafter in effect, whether or not of
record, for the use or occupancy of all or any part of the Property, together
with all amendments, supplements, consolidations, replacements, restatements,
extensions, renewals and other modifications of any thereof.

GRANTING CLAUSE VII.

         RENTS, ISSUES AND PROFITS. All estate, right, title and interest of the
Mortgagor in, to, under or derived from all rents, royalties, issues, profits,
receipts, revenue, income and other benefits now or hereafter, including during
any period of redemption, accruing with respect to the Property, including all
rents and other sums now or hereafter, including during any period of
redemption, payable pursuant to the Leases; all other sums now or hereafter,
including during any period of redemption, payable with respect to the use,
occupancy, management, operation or control of the Property; and all other
claims, rights and remedies now or hereafter, including during any period of
redemption, belonging or accruing with respect to the Property, including fixed,
additional and percentage rents, occupancy charges, security deposits, parking,
maintenance, common area, tax, insurance, utility and service charges and
contributions (whether collected under the Leases or otherwise), proceeds of
sale of electricity, gas, heating, air-conditioning and other utilities and
services (whether collected under the Leases or otherwise), and deficiency rents
and liquidated damages following default or cancellation (the foregoing rents
and other sums described in this Granting Clause being collectively called the
"RENTS"), all of which the Mortgagor hereby irrevocably directs be paid to the
Mortgagee, subject to the license granted to the Mortgagor pursuant to Section
5.07(b) , to be held, applied and disbursed as provided in this Mortgage.

GRANTING CLAUSE VIII.

         PERMITS. All estate, right, title and interest of the Mortgagor in, to,
under or derived from all licenses, authorizations, certificates, variances,
grants, concessions, franchises, consents, approvals and other permits now or
hereafter pertaining to the Property (the foregoing being collectively called
the "PERMITS"), excluding from the grant under this Granting Clause (but not the
definition of the term "PERMITS" for the other purposes hereof) any Permits
which cannot be transferred or encumbered by the Mortgagor without causing a
termination thereof or a default thereunder.

GRANTING CLAUSE IX.

         BOOKS AND RECORDS. All estate, right, title and interest of the
Mortgagor in, to, under or derived from all books and records, including any
tenant files, credit files, customer files, computer print outs, files, programs
and other computer and electronic materials and records, now or hereafter
relating primarily to the ownership and operation of the Real Property (as
opposed to Mortgagor's business operations on the Real Property).

                                       5
<PAGE>

GRANTING CLAUSE X.

         INTANGIBLE PROPERTY. All estate, right, title and interest of the
Mortgagor in, to, under or derived from all names and addresses of the Property
and other intangible property not described in the foregoing Granting Clauses
now or hereafter relating to the ownership and operation of the Real Property
(as opposed to Mortgagor's business operations on the Real Property).

GRANTING CLAUSE XI.

         PROCEEDS AND AWARDS. All estate, right, title and interest of the
Mortgagor in, to, under or derived from all proceeds of any Transfer, financing,
refinancing or conversion into cash or liquidated claims, whether voluntary or
involuntary, of any of the Mortgaged Property, including all Insurance Proceeds
and Awards, all title insurance proceeds under any title insurance policy now or
hereafter held by the Mortgagor, and all rights, dividends and other claims of
any kind whatsoever (including damage, secured, unsecured, priority and
bankruptcy claims) now or hereafter relating to any of the Mortgaged Property,
all of which the Mortgagor hereby irrevocably directs be paid to the Mortgagee
to the extent provided hereunder or under any other Financing Document, to be
held, applied and disbursed as provided in this Mortgage.

GRANTING CLAUSE XII.

         ADDITIONAL PROPERTY. All greater, additional or other estate, right,
title and interest of the Mortgagor in, to, under or derived from the Mortgaged
Property now or hereafter owned or acquired by the Mortgagor, including all
right, title and interest of the Mortgagor in, to, under or derived from all
extensions, improvements, betterments, renewals, substitutions and replacements
of, and additions and appurtenances to, any of the Mortgaged Property hereafter
acquired by or released to the Mortgagor or constructed or located on, or
attached to, the Property, in each case, immediately upon such acquisition,
release, construction, location or attachment; all estate, right, title and
interest of the Mortgagor in, to, under or derived from any other property and
rights which are, by the provisions of the any Financing Document, required to
be subjected to the Lien hereof; all estate, right, title and interest of the
Mortgagor in, to, under or derived from any other property and rights which are
necessary to maintain the Property, in each case to the fullest extent permitted
under applicable law, without any further conveyance, mortgage, assignment or
other act by the Mortgagor; and all estate, right, title and interest of the
Mortgagor in, to, under or derived from all other property and rights which are
by any instrument or otherwise subjected to the Lien hereof by the Mortgagor or
anyone acting on its behalf.

         TO HAVE AND TO HOLD the Mortgaged Property, together with all estate,
right, title and interest of the Mortgagor and anyone claiming by, through or
under the Mortgagor in, to, under or derived from the Mortgaged Property and all
rights and appurtenances relating thereto, unto the Mortgagee and its successors
and assigns forever.

         PROVIDED ALWAYS that this Mortgage is upon the express condition that
the Mortgaged Property shall be released from the Lien of this Mortgage in full
or in part in the manner and at the time provided in Section 7.01(a).

                                       6
<PAGE>

         THE MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH THE MORTGAGEE AS
FOLLOWS:

<PAGE>

                                    ARTICLE 1

                         DEFINITIONS AND INTERPRETATION

         SECTION 1.1. DEFINITIONS. (a) Capitalized terms used in this Mortgage,
but not otherwise defined herein, are defined in or by reference in the Credit
Agreement and have the same meanings herein as therein.

         (b) In addition, as used herein, the following terms have the following
meanings:

         "AGREEMENTS" is defined in Granting Clause V.

         "AWARDS" means at any time all awards or payments received or
receivable by reason of any Condemnation, including all amounts received or
receivable with respect to any Transfer in lieu or anticipation of Condemnation
or in connection with any agreement with any condemning authority which has been
made in settlement of any proceeding relating to a Condemnation.

         "BANKRUPTCY CODE" means the Bankruptcy Code of 1978, as amended.

         "CASH PROCEEDS ACCOUNT" is defined in the Security Agreement.

         "CASUALTY" means any damage to, or destruction of, the Property,
reasonable wear and tear in the ordinary course of business excepted.

         "CASUALTY PROCEEDS" means at any time all Insurance Proceeds and all
Awards with respect to, respectively, any Casualty or any Condemnation.

         "CASUALTY PROCEEDS ACCOUNT" is defined in the Security Agreement.

         "COLLATERAL ACCOUNT" is defined in the Security Agreement.

         "CONDEMNATION" means any condemnation or other taking or temporary or
permanent requisition of any Property, any interest therein or right appurtenant
thereto, or any change of grade affecting any Property, as the result of the
exercise of any right of condemnation or eminent domain. A Transfer to a
governmental authority in lieu or anticipation of Condemnation shall be deemed
to be a Condemnation.

         "CREDIT AGREEMENT" is defined in Recital A.

         "EQUIPMENT" is defined in Granting Clause III.

         "EVENT OF DEFAULT" is defined in Section 5.01.

         "IMPOSITIONS" means all taxes (including real estate taxes and
transfer, sales and use taxes), assessments (including all assessments for
public improvements or benefits, whether or not

                                       7
<PAGE>

commenced or completed prior to the date hereof), water, sewer or other rents,
rates and charges, excises, levies, license fees, permit fees, inspection fees
and other authorization fees and other charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
(including all interest and penalties thereon), which at any time may be
assessed, levied, confirmed or imposed on or in respect of, or be a Lien upon,
(i) the Property, any other Mortgaged Property or any interest therein, (ii) any
occupancy, use or possession of, or activity conducted on, the Property, (iii)
the Rents from the Property or the use or occupancy thereof, or (iv) the Secured
Obligations or the Collateral Documents, but excluding income, excess profits,
franchise, capital stock, estate, inheritance, succession, gift or similar taxes
of the Mortgagee or any other Secured Party, except to the extent that such
taxes of the Mortgagee or any other Secured Party are imposed in whole or in
part in lieu of, or as a substitute for, any taxes which are or would otherwise
be Impositions.

         "IMPROVEMENTS" is defined in Granting Clause II.

         "INSURANCE POLICIES" means the insurance policies and coverages
required to be maintained by the Mortgagor with respect to the Property pursuant
to the Credit Agreement and Section 3.01.

         "INSURANCE PREMIUMS" means all premiums payable under the Insurance
Policies.

         "INSURANCE PROCEEDS" means, at any time, all insurance proceeds or
payments to which the Mortgagor may be or become entitled under the property
Insurance Policies by reason of any Casualty, plus (i) if the Mortgagor fails to
maintain any of such Insurance Policies in accordance with the terms of the
Credit Agreement or Section 3.01, the amounts which would have been available
with respect to such Casualty had the Mortgagor maintained such Insurance
Policies and (ii) all insurance proceeds and payments to which the Mortgagor may
be or become entitled in the event of any Casualty under any other property
insurance policies, coverages or self-insurance maintained by the Mortgagor with
respect to the Property.

         "INSURANCE REQUIREMENTS" means all provisions of the Insurance
Policies, all requirements of the issuer of any of the Insurance Policies and
all orders, rules, regulations and any other requirements of the National Board
of Fire Underwriters (or any other body exercising similar functions) binding
upon the Mortgagor or applicable to the Property, any adjoining vaults,
sidewalks, parking areas or driveways or any use or condition thereof.

         "LAND" is defined in Granting Clause I.

         "LEASE" means each lease, tenancy, subtenancy, license, franchise,
concession or other occupancy agreement relating to the Property, together with
any guarantee of the obligations of the tenant or other occupant thereunder or
any occupancy or right to possession under any federal or state Bankruptcy Code
in the event of the rejection of any Lease by the landlord or its trustee
pursuant to said Code.

         "LEGAL REQUIREMENTS" means all provisions of the Leases, the
Agreements, the Permitted Liens, the Permits and all applicable laws, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, directions and requirements of, and agreements with,

                                       8
<PAGE>

governmental bodies, agencies or officials, including Environmental Laws, now or
hereafter applicable to the Property, or any use or condition thereof.

         "MAXIMUM SECURED AMOUNT" is defined in Recital C.

         "MORTGAGE" is defined in the Preamble.

         "MORTGAGED PROPERTY" is defined in the Granting Clauses.

         "MORTGAGEE" is defined in the Preamble.

         "MORTGAGOR" is defined in the Preamble.

         "NATIONAL FLOOD INSURANCE PROGRAM" means the National Flood Insurance
Act of 1968 and the Flood Disaster Protection Act of 1973 (42 U.S.C. Sections
4001 ET SEQ.).

         "PERMITS" is defined in Granting Clause VIII.

         "PERMITTED ENCUMBRANCES" means the Liens described in Exhibit B.

         "PERMITTED LIENS" means (i) any Liens with respect to the Mortgaged
Property permitted under clauses (g), (i), (k) and, with respect to the
Equipment, (c) of Section 5.12 of the Credit Agreement, (ii) any Liens being
contested pursuant to Section 2.06, and (iii) the Permitted Encumbrances.

         "POST-DEFAULT RATE" means, with respect to each Loan, the rate per
annum specified in the Credit Agreement for interest on any overdue principal of
or interest on such Loan.

         "PROPERTY" is defined in Granting Clause III.

         "RECEIVER" is defined in Section 5.02(a)(v).

         "RENTS" is defined in Granting Clause VII.

         "RESTORATION" means the restoration, repair, replacement or rebuilding
of the Property after a Casualty or Condemnation, and "RESTORE" means to
restore, repair, replace or rebuild the Property after a Casualty or
Condemnation, in each case as nearly as possible to its value, utility and
condition immediately prior to such Casualty or Condemnation.

         "SECURED OBLIGATIONS" is defined in Recital B.

         "SECURED PARTIES" means the holders from time to time of the Secured
Obligations, including the Lenders, the Administrative Agent, the Collateral
Agent and the Mortgagee.

         "SECURITY AGREEMENT" means the Amended and Restated Security Agreement
dated as of March 21, 2001 among the Mortgagor, as the Company, the Subsidiary
Guarantors parties thereto and Morgan Guaranty Trust Company of New York, as
Collateral Agent, as heretofore or hereafter amended from time to time.

                                       9
<PAGE>

         "SECURITY DEPOSIT" means any payment, note, letter of credit or other
security or deposit made or given by or on behalf of a tenant under a Lease as
security for the performance of its obligations thereunder, and any interest
payable to the tenant accrued thereon.

         "TRANSFER" means, when used as a noun, any sale, conveyance,
assignment, lease or other transfer and, when used as a verb, to sell, convey,
assign, lease or otherwise transfer, in each case (i) whether voluntary or
involuntary, (ii) whether direct or indirect and (iii) including any agreement
providing for a Transfer or granting any right or option providing for a
Transfer, but not including the transfer of the capital stock of the Mortgagor.

         "UNAVOIDABLE DELAYS" means delays due to acts of God, fire, flood,
earthquake, explosion or other Casualty, inability to procure or shortage of
labor, equipment, facilities, sources of energy (including electricity, steam,
gas or gasoline), materials or supplies, failure of transportation, strikes,
lockouts, action of labor unions, Condemnation, litigation relating to Legal
Requirements, inability to obtain Permits or other causes beyond the reasonable
control of the Mortgagor, PROVIDED that lack of funds shall not be deemed to be
a cause beyond the control of the Mortgagor.

         "UCC" means the Uniform Commercial Code as in effect in the State in
which the Mortgaged Property is located.

         "WAIVER NO. 1" is defined in Recital A.

          (c) In this Mortgage, unless otherwise specified, references to this
Mortgage, the Credit Agreement, Notes, Security Agreement, Collateral Documents,
Financing Documents, Designated Interest Rate Agreements, Designated Letters of
Credit, Secured Obligations, Lease and Permits include all amendments,
supplements, consolidations, replacements, restatements, extensions, renewals
and other modifications thereof now or hereafter in effect from time to time.

         (d) "MORTGAGE COVENANTS", "STATUTORY CONDITION" and "STATUTORY POWER OF
SALE", in each case, are defined in Massachusetts General Law, c. 183, sections
19, 20, and 21, respectively, which definitions are incorporated herein and by
reference.

         SECTION 1.2. INTERPRETATION. In this Mortgage, unless otherwise
specified, (i) singular words include the plural and plural words include the
singular; (ii) words which include a number of constituent parts, things or
elements, including the terms Land, Improvements, Equipment, Property, Mortgaged
Property, Leases, Permits, Collateral Documents, Financing Documents, letters of
credit, Hedging Agreements, Secured Obligations, shall be construed as referring
separately to each constituent part, thing or element thereof, as well as to all
of such constituent parts, things or elements as a whole; (iii) words importing
any gender include the other genders; (iv) references to any Person include such
Person's successors and assigns and in the case of an individual, the word
"SUCCESSORS" includes such Person's heirs, devisees, legatees, executors,
administrators and personal representatives; (v) references to any statute or
other law include all applicable rules, regulations and orders adopted or made
thereunder and all statutes or other laws amending, consolidating or replacing
the statute or law referred to; (vi) the words "CONSENT", "APPROVE", "AGREE" and
"REQUEST", and derivations thereof or words of similar import, mean the

                                       10
<PAGE>

prior written consent, approval, agreement or request of the Person in question;
(vii) the words "INCLUDE" and "INCLUDING", and words of similar import, shall be
deemed to be followed by the words "WITHOUT LIMITATION"; (viii) the words
"HERETO", "HEREIN", "HEREOF" and "HEREUNDER", and words of similar import, refer
to this Mortgage in its entirety; (ix) references to Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this
Mortgage; (x) the Schedules and Exhibits to this Mortgage are incorporated
herein by reference; (xi) the titles and headings of Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a
matter of convenience and shall not affect the construction of this Mortgage;
(xii) all obligations of the Mortgagor hereunder shall be satisfied by the
Mortgagor at the Mortgagor's sole cost and expense; and (xiii) all rights and
powers granted to the Mortgagee hereunder shall be deemed to be coupled with an
interest and be irrevocable until such time as this Mortgage is released or
discharged as provided in Section 7.01.

         SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES. (a) The Mortgagor
acknowledges that it was represented by counsel in connection with this
Mortgage, that it and its counsel reviewed and participated in the preparation
and negotiation of this Mortgage and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party or the Mortgagee
shall not be employed in the interpretation of this Mortgage.

          (b) In the event of any conflict between the provisions of this
Mortgage and the provisions of the Credit Agreement or the Security Agreement,
the provisions of the Credit Agreement or the Security Agreement, as applicable,
shall control, PROVIDED that the provisions of this Mortgage shall control with
respect to the creation, perfection, priority and enforcement of the Liens
created hereby and with respect to the remedies granted herein and the
enforcement thereof.

                                    ARTICLE 2

                        CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGEE

         SECTION 2.1. TITLE, AUTHORITY AND EFFECTIVENESS. (a) The Mortgagor
represents and warrants that (i) the Mortgagor has good and marketable title to
the fee simple interest in the Land and the Improvements free and clear of all
Liens other than the Permitted Liens; (ii) the Mortgagor is the owner of, or has
a valid leasehold interest in, the Equipment and all other items constituting
the Mortgaged Property free and clear of all Liens other than the Permitted
Liens; (iii) the execution, delivery and performance by the Mortgagor of this
Mortgage are within the Mortgagor's corporate power, have been duly authorized
by all necessary corporate and, if required, stockholder action, require no
consent or approval of, registration or filing with, or other action by, any
governmental authority (except for the recording or filing of this Mortgage and
UCC financing statements) and do not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of the Mortgagor or any
order of any governmental authority, will not violate or result in a default
under any Legal Requirement or any indenture, agreement or other instrument
binding upon the Mortgagor or their respective assets, or give rise to a right
thereunder to require any payment to be made by the Mortgagor, and will not
result in the

                                       11
<PAGE>

creation or imposition of any Lien on any asset of the Mortgagor (other than the
Lien of this Mortgage on the Mortgaged Property); (iv) this Mortgage constitutes
a valid, binding and enforceable first Lien on the Mortgaged Property subject
only to the Permitted Liens; (v) this Mortgage constitutes a valid and binding
agreement of the Mortgagor, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the enforcement
of creditors' rights generally and by general equitable principles; and (vi)
upon the recording of this Mortgage in the office specified in Exhibit C for
such recording and the filing of the UCC-1 financing statement/s listed in
Exhibit C in the office/s specified in Exhibit C for such filing, this Mortgage
shall constitute a valid, binding and enforceable first priority Lien on the
Mortgaged Property that is real property under applicable law and a valid,
binding and enforceable first priority perfected security interest on the
Mortgaged Property that is governed by the UCC.

          (b) The Mortgagor shall cause the representations and warranties in
Section 2.01(a) and 2.05 to be true and correct in each and every respect and
forever preserve, protect, warrant and defend (i) its estate, right, title and
interest in and to the Mortgaged Property, (ii) the validity, enforceability and
priority of the Lien of this Mortgage on the Mortgaged Property, and (iii) the
right, title and interest of the Mortgagee and any purchaser at any sale of the
Mortgaged Property hereunder or relating hereto, in each case against all other
Liens and claims whatsoever, subject only to the Permitted Liens.

          (c) The Mortgagor shall immediately upon the execution, acknowledgment
and delivery of the Mortgage record, register and file this Mortgage and any
financing statements or other documents which are necessary or reasonably
requested by the Mortgagee to effectuate, complete, perfect, continue and
preserve the Lien of this Mortgage as a first Lien on the Mortgaged Property,
subject only to the Permitted Liens. The Mortgagor shall (i) promptly correct
any defect or error which may be discovered in this Mortgage or any financing
statement or other document relating hereto; and (ii) promptly execute,
acknowledge, deliver, record, register and file and re-record, re-register and
re-file this Mortgage and any financing statements or other documents which are
necessary or reasonably requested by the Mortgagee from time to time (all in
form and substance reasonably satisfactory to the Mortgagee) in order (A) to
effectuate, complete, perfect, continue or preserve the Lien of this Mortgage as
a first Lien on the Mortgaged Property, whether now owned or hereafter acquired,
subject only to the Permitted Liens, or (B) to effectuate, complete, perfect,
continue or preserve any right, power or privilege granted or intended to be
granted to the Mortgagee hereunder or otherwise accomplish the purposes of this
Mortgage. Without limiting the foregoing, the Mortgagor shall not change its
name, identity or corporate structure in any manner, the location of its chief
executive office or chief place of business, or the location where it keeps or
holds any Mortgaged Property governed by the UCC or any records relating
thereto, unless it shall have given the Mortgagee prior notice thereof pursuant
to, and delivered an Opinion of Counsel with respect thereto in accordance with,
Section 5(e) of the Security Agreement as if said Section 5(e) referred to this
sentence in place of the references to Sections 5(a) and 5(b) therein.

          (d) To the fullest extent permitted under applicable law, the
Mortgagor hereby authorizes the Mortgagee to execute and file financing
statements contemplated by subsection (c) of this Section or continuation
statements without the Mortgagor's signature appearing thereon.

                                       12
<PAGE>

To the fullest extent permitted under applicable law, in the event the Mortgagor
does not execute, acknowledge, deliver, record, register and file and re-record,
re-register and re-file any document contemplated by subsection (c) of this
Section within fifteen (15) days after demand by the Mortgagee, the Mortgagor
hereby authorizes the Mortgagee to execute, acknowledge, deliver, record,
register and file and re-record, re-register and re-file the same as
attorney-in-fact on behalf of the Mortgagor.

          (e) The Mortgagor shall pay when due or upon demand by the Mortgagee,
whichever is earlier, all recording, filing, registration and recording fees,
all federal, state, county and stamp, recording, registration, filing and other
taxes, duties, imposts, assessments and charges, and all expenses of the
Mortgagee (including reasonable attorneys' fees and disbursements), with respect
to the preparation, execution, acknowledgment, delivery, recording, registration
and filing and re-recording, re-registration and re-filing of this Mortgage and
any other document contemplated by subsection (c) of this Section.

          (f) Nothing herein shall be construed to subordinate the Lien of this
Mortgage to any Permitted Lien to which the Lien of this Mortgage is not
otherwise subordinate.

         SECTION 2.2. SECURED OBLIGATIONS. The Mortgagor shall duly and
punctually pay, perform and observe the Secured Obligations binding upon the
Mortgagor in accordance with the terms and provisions of the Financing
Documents.

         SECTION 2.3. IMPOSITIONS. The Mortgagor shall (i) subject to Section
2.06, duly and punctually pay all Impositions prior to the delinquency date
thereof, PROVIDED that if any such Imposition may be paid in installments
(whether or not interest shall accrue on the unpaid balance thereof), the
Mortgagor may pay the same in installments (together with any accrued interest
payable) before the delinquency date thereof; (ii) subject to Section 2.06, duly
and punctually file all returns and other statements required to be filed with
respect to any Imposition prior to the delinquency date thereof; (iii) promptly
notify the Mortgagee of the receipt by the Mortgagor of any notice of default in
the payment of any Imposition or in the filing of any return or other statement
relating to any Imposition and simultaneously furnish to the Mortgagee a copy of
such notice of default; (iv) not make deduction from or claim any credit on any
Secured Obligation by reason of any Imposition (and to the fullest extent
permitted under applicable law the Mortgagor hereby irrevocably waives any right
to do so); and (iv) upon request, promptly deliver to the Mortgagee (A) a
certificate of the Mortgagor evidencing that the Mortgagor has complied with the
provisions of this Section, accompanied to the extent required by the Mortgagee
by copies of official receipts evidencing the payment of the Impositions, and
(B) such other information and documents with respect to the matters referred to
in this Section as the Mortgagee shall reasonably request.

         SECTION 2.4. LEGAL AND INSURANCE REQUIREMENTS. (a) The Mortgagor
represents and warrants that (i) as of the date hereof, the Property and the use
and operation thereof comply in all material respects with all Legal
Requirements and Insurance Requirements; (ii) there is no material default under
any Legal Requirement or Insurance Requirement; and (iii) the execution,
delivery and performance of this Mortgage will not contravene in any material
respect any provision of or constitute a material default under any Legal
Requirement or Insurance Requirement.

                                       13
<PAGE>

          (b) The Mortgagor shall (i) subject to Section 2.06, duly and
punctually comply in all material respects with all Legal Requirements and
Insurance Requirements; (ii) procure, maintain and, subject to Section 2.06,
duly and punctually comply in all material respects with all Permits required
for any construction, reconstruction, repair, alteration, addition, improvement,
maintenance, management, use and operation of the Property as then conducted;
(iii) promptly notify the Mortgagee of the receipt by the Mortgagor of any
notice of default regarding any Legal Requirement or Insurance Requirement or
any possible or actual termination of any Permit or Insurance Policy and furnish
to the Mortgagee a copy of such notice of default or termination, except with
respect to any default or termination which would not have a material adverse
effect on the use or operation of the Property as then conducted; (iv) promptly
after obtaining knowledge thereof notify the Mortgagee of any condition which,
with or without the giving of notice or the passage of time or both, would
constitute a default regarding any Legal Requirement or Insurance Requirement or
result in a termination of any Permit or Insurance Policy, except with respect
to any default or termination which would not have a material adverse effect on
the use or operation of the Property as then conducted, and the action being
taken to remedy such condition; (v) upon request, promptly furnish to the
Mortgagee a copy of any Permit obtained by the Mortgagor with respect to the
Property after the date hereof; and (vi) upon request, promptly deliver to the
Mortgagee (A) a certificate of the Mortgagor evidencing that the Mortgagor has
complied with the provisions of this Section, and (B) such other information and
documents with respect to the matters referred to in this Section as the
Mortgagee shall reasonably request.

         SECTION 2.5. STATUS AND CARE OF THE PROPERTY. The Mortgagor represents
and warrants that, except in any case as disclosed by the Mortgagor to the
Mortgagee concurrently with the execution and delivery of this Mortgage in a
writing making reference to this provision of this Mortgage, (i) the Property is
served by all necessary water, sanitary and storm sewer, drainage, electric,
steam, gas, telephone and other utilities and utility facilities, which
facilities have capacities which are sufficient to serve the current use and
occupancy of the Property; (ii) the Property has legal access to all streets and
roads necessary for and sufficient to serve the use and operation of the
Property, including as appropriate access over properly granted, perpetual,
private easements, rights of way or servitudes that are specifically included in
the Mortgaged Property; (iii) the Permitted Encumbrances do not materially
interfere with the use, enjoyment and operation of the Mortgaged Property; (iv)
the Improvements located on the Land do not materially interfere with any of the
Permitted Encumbrances; (v) the Improvements located on the Land do not
materially encroach on any other land, and the improvements located on any other
land do not materially encroach on the Land; (vi) the maintenance, use and
operation of the Improvements on the Land do not depend on any other land or any
improvements located on any other land, and the maintenance, use and operation
of the improvements on any other land do not depend on the Land or the
Improvements located on the Land except as provided for by easements benefitting
and burdening the Land; (vii) other than as shown on the survey furnished to the
Mortgagee, the Improvements are not located in an area designated as "flood
prone" (as defined under the regulations adopted under the National Flood
Insurance Program); and to the extent any of the Improvements are located (in
whole or part) in an area designated as "flood prone," the Mortgagor shall
maintain in full force and effect flood insurance under the National Flood
Insurance Program as provided in Section 3.01; and (viii) upon request, shall
promptly deliver to the Mortgagee (A) evidence reasonably satisfactory to the
Mortgagee that the Mortgagor has complied with the

                                       14
<PAGE>

provisions of this Section and (B) such other information and documents with
respect to the matters referred to in this Section as the Mortgagee shall
reasonably request.

         SECTION 2.6. PERMITTED CONTESTS. After prior notice to the Mortgagee,
the Mortgagor may contest, by appropriate proceedings conducted in good faith
and with due diligence, any Legal Requirement, any Insurance Requirement, any
Imposition or Lien therefor on the Mortgaged Property or any interest therein or
any Lien of any laborer, mechanic, materialman, supplier or vendor on the
Mortgaged Property or any interest therein, PROVIDED that (i) no Event of
Default has occurred and is continuing; (ii) no Mortgaged Property or interest
therein is in danger of being sold, forfeited or lost, nor is the priority of
the Lien of the Mortgagee at risk, as a result of such contest or proceedings;
(iii) in the case of any Legal Requirement, the Mortgagee and the other Secured
Parties are not in danger of any criminal or material civil penalty or any other
liability for failure to comply therewith and no Mortgaged Property or interest
therein is subject to the imposition of any Lien as a result of such failure
which is not properly contested in accordance with this Section; (iv) in the
case of any Insurance Requirement, no Insurance Policy or coverage is in danger
of being forfeited or lost as a result of such contest or proceedings, unless
replaced; and (v) in the case of (A) any Lien of a laborer, mechanic,
materialman, supplier or vendor, (B) any Imposition or Lien therefor or (C) any
other Lien, such proceedings suspend the foreclosure of such Lien or any other
collection thereof from the Mortgaged Property; and PROVIDED FURTHER that the
Mortgagor establishes any reserve or other appropriate provision required with
respect to such contest under generally accepted accounting principles
consistently applied. It is agreed that the failure to comply with any such
Legal Requirement or Insurance Requirement, to pay any such Imposition or to
discharge any such Lien being contested pursuant to this Section during such
contest shall not constitute an Event of Default, PROVIDED that the Mortgagor is
in compliance with this Section. Upon request, the Mortgagor shall promptly
deliver to the Mortgagee (x) a certificate of the Mortgagor describing in detail
reasonably satisfactory to the Mortgagee the contests pending as of the date
thereof and evidencing that the Mortgagor has complied with the provisions of
this Section with respect thereto and (y) such other information and documents
with respect to the contests conducted pursuant to this Section as the Mortgagee
shall reasonably request.

         SECTION 2.7. LIENS. The Mortgagor shall not create or permit to be
created and, subject to Section 2.06, within 30 days after receipt of notice or
knowledge thereof, shall discharge or cause to be discharged, any Lien on the
Mortgaged Property other than Permitted Liens, in each case (i) whether
voluntarily or involuntarily created, and (ii) whether or not subordinated
hereto. The provisions of this Section shall apply to each and every Lien (other
than Permitted Liens) on the Mortgaged Property, regardless of whether or not a
consent to, or waiver of a right to consent to, any other Lien thereon has been
previously obtained in accordance with the provisions of the Financing
Documents. Nothing herein shall obligate the Mortgagor to remove any inchoate
statutory Lien in respect of obligations not yet due and payable.

         SECTION 2.8. TRANSFER. The Mortgagor shall not Transfer, or suffer any
Transfer of, the Mortgaged Property or any part thereof or interest therein,
except for any sale of the Mortgaged Property permitted under the Credit
Agreement and made in compliance with the Credit Agreement, PROVIDED that, upon
any sale of the Mortgaged Property permitted under the Credit Agreement,
arrangements satisfactory to the Administrative Agent shall be entered into in
order to transfer to the Administrative Agent a portion of such cash proceeds
sufficient to make the prepayment of Loans, if any, as required by Section
2.17(b) of the Credit Agreement. The

                                       15
<PAGE>

provisions of this Section shall apply to each and every Transfer of the
Mortgaged Property or any interest therein, regardless of whether or not a
consent to, or waiver of a right to consent to, any other Transfer thereof has
been previously obtained in accordance with the provisions of the Financing
Documents.

                                    ARTICLE 3

                      INSURANCE, CASUALTY AND CONDEMNATION

         SECTION 3.1. INSURANCE. (a The Mortgagor shall maintain in full force
and effect the following Insurance Policies with respect to the Property (and
shall pay the Insurance Premiums for such Insurance Policies as and when due),
all such Insurance Policies to be maintained with financially sound and
responsible insurance companies and be in form and substance, including the
policy limits and deductibles, approved by the Mortgagee (which approvals shall
not be unreasonably withheld):

         (i)      "all risk" property insurance in an amount not less than the
                  full replacement value of the Property and sufficient to
                  prevent the Mortgagor from being a co-insurer of any loss
                  under the policy, including difference-in-conditions coverage
                  (including boiler, machinery, sprinkler, flood and earthquake
                  coverages), and including business interruption and extra
                  expense coverages, and including, when any alteration or
                  Restoration of the Property is in progress, builder's risk
                  coverage on a completed value, non-reporting basis with
                  extended coverage and soft-cost expense coverage;

         (ii)     to the extent any of the Improvements are located (in whole or
                  part) in an area designated as "flood prone" (as defined under
                  the regulations adopted under the National Flood Insurance
                  Program), flood insurance under the National Flood Insurance
                  Program or substantially equivalent thereto in the amount
                  required under, and meeting the other requirements of,
                  applicable law;

         (iii)    public liability insurance (including products/completed
                  operations liability coverages) having a combined single limit
                  of not less than $80,000,000 for bodily injury, death and
                  property damage, which may be provided by basic, umbrella and
                  excess liability policies aggregating said combined single
                  limit;

         (iv)     workers' compensation and employer's liability insurance as
                  required in the State in which the Property is located or a
                  self-insurance program as permitted under applicable law in
                  the State in which the Property is located; and

         (v)      such other insurance as the Required Lenders may reasonably
                  request pursuant to Section 5.03(b)(iii) of the Credit
                  Agreement.

The physical damage insurance maintained with respect to the Property shall (i)
bear the New York standard non-contributory mortgagee endorsement (or the
equivalent thereto) naming the

                                       16
<PAGE>

Mortgagee as loss payee and (ii) provide that all property losses insured
against involving a claim or claims with respect to a single Casualty in excess
of $100,000 shall be adjusted by the Mortgagor, subject to the Mortgagee's
rights pursuant to Section 3.03 hereof and the Security Agreement. The liability
insurance maintained with respect to the Property shall name the Mortgagee and
the other Secured Parties as additional insureds. All insurance maintained by
the Mortgagor with respect to the Property shall provide that no cancellation or
material change thereof shall be effective until at least 30 days after receipt
by the Mortgagee of written notice thereof and all losses shall be payable
notwithstanding any foreclosure or other action or proceeding taken pursuant to
this Mortgage.

          (b) The Mortgagor shall furnish to the Mortgagee from time to time (i)
not later than 15 days prior to the expiration date of each policy required to
be maintained by the Mortgagor hereunder, an insurance certificate or
certificates executed by the insurer or its authorized agent satisfactory to the
Mortgagee in its reasonable discretion evidencing that the new or extended
policy is in force, together with evidence satisfactory to the Mortgagee in its
reasonable discretion of the payment of the premium therefor or, if the premium
is not then due, the due date thereof, and (ii) upon Mortgagee's request, not
later than the day on which the premium for each policy required to be
maintained by the Mortgagor hereunder is due, evidence satisfactory to the
Mortgagee in its reasonable discretion of the payment of such premium. If the
Mortgagor fails to maintain the Insurance Policies required to be maintained
under this Section (or to pay the Insurance Premiums for such Insurance Policies
as and when due), the Mortgagee shall have the right (but not the obligation) to
obtain such Insurance Policies and pay the Insurance Premiums therefor. If the
Mortgagee obtains such Insurance Policies or pays the premiums therefor, upon
demand, the Mortgagor shall reimburse the Mortgagee for its reasonable expenses
in connection therewith (including reasonable attorneys' fees and expenses),
together with interest thereon from the date of demand for each day until paid
at the Post-Default Rate for Base Rate Loans.

          (c) The Mortgagor may effect such coverage under subsection (a) of
this Section under blanket insurance policies covering other properties of the
Mortgagor or its Subsidiaries, PROVIDED that (i) any such blanket insurance
policy shall specify therein, or the insurer thereunder shall certify to the
Mortgagee, (A) the maximum amount of the total insurance afforded by the blanket
policy allocated to the Property, and (B) any sublimits in such blanket policy
applicable to the Property, which sublimits shall not be less than the amounts
required pursuant to this Section, (ii) any such blanket insurance policy shall
comply in all respects with the other provisions of this Section and (iii) the
protection afforded under any such blanket insurance policy shall be no less
than that which would have been afforded under a separate policy relating only
to the Property.

          (d) The Mortgagor shall not maintain additional or separate insurance
concurrent in form or contributing in the event of loss with the insurance
required under this Section, unless (i) the policies providing such additional
or separate insurance are submitted to the Mortgagee for its approval, which
approval shall not be unreasonably withheld, (ii) the insurers under such
policies and the terms thereof are approved by the Mortgagee, which approval
shall not be unreasonably withheld and (iii) the Mortgagee and the other Secured
Parties are included in such policies as loss payees or additional insureds.

                                       17
<PAGE>

         SECTION 3.2. CASUALTY AND CONDEMNATION. (a The Mortgagor represents and
warrants that, as of the date hereof, except in any case as disclosed by the
Mortgagor to the Mortgagee concurrently with the execution and delivery of this
Mortgage in a writing making reference to this provision of this Mortgage, (i)
there is no Casualty or Condemnation affecting in any material respect the use
and occupancy of the Property, (ii) there are no negotiations or proceedings
presently pending in connection with a Condemnation and (iii) to the knowledge
of the Mortgagor, no Condemnation is proposed or threatened.

          (b) (i) If any Casualty occurs, the Mortgagor shall (A) immediately
take such action as may be necessary or appropriate to preserve the undamaged
portion of the Property and protect against personal injury or property damage,
and (B) promptly give notice thereof to the Mortgagee describing in detail
reasonably satisfactory to the Mortgagee the Casualty and the work and estimated
cost of Restoring the Property.

               (ii) If any Condemnation occurs or is proposed or threatened, the
Mortgagor shall (A) promptly take all actions reasonably necessary or
appropriate to preserve its interest in the Property and (B) promptly give
notice thereof to the Mortgagee describing in detail reasonably satisfactory to
the Mortgagee the Condemnation or proposed or threatened Condemnation and the
proposed actions to preserve its interest in the Property.

          (c) If any Casualty or Condemnation occurs, PROVIDED the applicable
Casualty Proceeds are made available to the Mortgagor, unless the Required
Lenders shall otherwise agree, the Mortgagor shall promptly commence and
diligently pursue to completion the Restoration of the Property, subject to
Unavoidable Delays, whether or not the Casualty Proceeds with respect thereto
are sufficient for such purpose; and (i) such Restoration shall be effected with
due diligence, in a good and workmanlike manner, in compliance with all
applicable Legal Requirements and Insurance Requirements, (ii) such Restoration
shall be conducted under the supervision of an architect or engineer if
customary for such Restoration, (iii) such Restoration shall be located wholly
on the Land and, except as provided for by existing easements benefitting or
burdening the Land, unless consented to by the Mortgagee and by the owner of the
other property, shall be independent of and not connected with improvements
located on other property, (iv such Restoration shall be promptly and fully paid
for by the Mortgagor, except to the extent that any such payment is being
contested in good faith pursuant to Section 2.06, and (v the Mortgagor shall
procure prior to the commencement of any such Restoration, and maintain
throughout the continuation of the work involved, such insurance and performance
and payment bonds as are customary for the type of construction and work
involved in Waltham, MA.

          (d) Upon request, the Mortgagor shall promptly deliver to the
Mortgagee evidence reasonably satisfactory to the Mortgagee that the Mortgagor
has complied with the provisions of this Article and such information and
documents with respect to the matters referred to in this Article as the
Mortgagee shall reasonably request.

         SECTION 3.3. CASUALTY PROCEEDS. If any Casualty or Condemnation occurs,
(i) the Mortgagor shall promptly make claim for the Casualty Proceeds with
respect thereto and diligently pursue to conclusion its claim for such Casualty
Proceeds and any suit, action or other proceeding necessary or appropriate to
obtain payment of such proceeds; and (ii) the Mortgagor shall pay all Casualty
Proceeds with respect to any Casualty or Condemnation, or cause the same to be
paid,

                                       18
<PAGE>

directly and immediately to the Mortgagee for deposit in the Casualty Proceeds
Account under Section 12 of the Security Agreement, to be held, applied and
disbursed pursuant to the provisions of Section 12 of the Security Agreement. In
the event that there are any Casualty Proceeds in excess of the cost of
Restoration as reasonably estimated by the Mortgagee or remaining after
completion and payment of the cost of Restoration, such excess Casualty Proceeds
shall be deposited in the Cash Proceeds Account under Section 12 of the Security
Agreement, to be further held, applied and disbursed pursuant to the provisions
of Section 12 of the Security Agreement.

                                    ARTICLE 4

                           CERTAIN SECURED OBLIGATIONS

         SECTION 4.1. REVOLVING LOANS, ETC. (a The Secured Obligations secured
by this Mortgage include (i) revolving Loans in the aggregate maximum principal
or face amount of $350,000,000, (ii) obligations of the Mortgagor with respect
to letters of credit, (iii) obligations of the Mortgagor pursuant to Hedging
Agreements, and (iv) any other obligations designated by the Mortgagor as
additional Secured Obligations pursuant to Section 2.16(d) of the Credit
Agreement, which are advanced, paid and readvanced from time to time.
Notwithstanding the amount of the Loans and such other Secured Obligations
outstanding at any particular time, the Mortgagor acknowledges and agrees that
this Mortgage secures the total amount of the Loans and other Secured
Obligations outstanding at any particular time up to the Maximum Secured Amount.

          (b) While this Mortgage is in effect, the Mortgagor shall deliver to
the Mortgagee, within 10 Business Days after the end of each Fiscal Quarter of
each Fiscal Year of the Mortgagor, a bring-down title commitment (but not title
insurance) or report from the title company that rendered the title commitment
delivered to the Administrative Agent at the time of the recording of this
Mortgage (or another title company satisfactory to the Administrative Agent in
its reasonable discretion), or a bring-down letter from an attorney satisfactory
to the Administrative Agent in its reasonable discretion, effective as of the
last Business Day of such Fiscal Quarter or a Business Day that is not later
than five Business Days after the last Business Day of such Fiscal Quarter, in
form and substance satisfactory to the Administrative Agent in its reasonable
discretion, evidencing whether or not any Liens or title matters have been filed
with respect to the Mortgaged Property since the last to occur of the effective
date of (x) the title commitment delivered to the Administrative Agent at the
time of the recording of this Mortgage and (y) the most recent previous title
commitment, report or letter delivered pursuant to this Section 4.01(b).

         SECTION 4.2. INTEREST AFTER DEFAULT. If, pursuant to the provisions of
this Mortgage, the Mortgagee shall make any payment on behalf of the Mortgagor
(including any payment made by the Mortgagee pursuant to Section 3.01 or 5.10)
or shall incur hereunder any expense for which the Mortgagee is entitled to
reimbursement pursuant to the provisions of this Mortgage or any other Financing
Documents, such Secured Obligation shall be repayable on demand, together with
interest from the date of demand for each day until paid at the Post-Default
Rate for Base Rate Loans. Such interest, and any other interest on the Secured
Obligations at a Post-Default Rate pursuant to the provisions of the Financing
Documents, shall accrue through the date paid

                                       19
<PAGE>

notwithstanding any intervening foreclosure, exercise of the power of sale or
other sale or judgment of foreclosure and be part of the Secured Obligations.

         SECTION 4.3. CHANGES IN THE LAWS REGARDING TAXATION. If after the date
hereof there is enacted any applicable law deducting from the value of the
Property for the purpose of taxation the Lien of any Collateral Document or
changing in any way the applicable law for the taxation of mortgages, deeds of
trust or other Liens or obligations secured thereby, or the manner of collection
of such taxes, so as to adversely affect this Mortgage, the Secured Obligations
or any Secured Party, upon demand by the Mortgagee or any other affected Secured
Party and to the fullest extent permitted under applicable law, the Mortgagor
shall pay all taxes, assessments or other charges resulting therefrom or shall
reimburse such Secured Party for all such taxes, assessments or other charges
which such Secured Party is obligated to pay as a result thereof.

         SECTION 4.4. INDEMNIFICATION. The Mortgagor shall protect, indemnify,
hold harmless and defend each of the Mortgagee and the other Secured Parties
from and against all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, proceedings, judgments, costs and expenses of any kind
whatsoever (including reasonable attorneys' fees and expenses) (collectively
"CLAIMS") which may be imposed on, incurred by or asserted against any Secured
Party by reason of , as a result of, on account of or in connection with (i) the
Mortgagee's exercise of any of its rights and remedies hereunder, (ii) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Mortgaged Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, street
or ways, (iii) any failure on the part of the Mortgagor to perform or comply
with any of the provisions of this Mortgage, any Legal Requirement or any
Insurance Requirement, (iv) any release or disposal on or from the Property or
presence on the Property of any Hazardous Substances, (v) the performance of any
labor or services or the furnishing of any materials or other property in
respect of the Mortgaged Property or any part thereof, and (vi) any conduct or
misconduct of the Mortgagor, any tenant or other occupant of any of the
Mortgaged Property or any of their respective agents, contractors,
subcontractors, servants, employees, licensees or invitees; PROVIDED that any
claims caused by the willful misconduct or gross negligence of any Secured Party
as determined by a court of competent jurisdiction shall be excluded from the
foregoing indemnification of such Secured Party. Any amount payable under this
Section shall be payable on demand, together with interest from the date of
demand for each day until paid at the Post-Default Rate for Base Rate Loans. All
such amounts and interest shall be part of the Secured Obligations. The
obligations of the Mortgagor under this Section shall survive the release or
termination of this Mortgage as to any matter arising out of any event occurring
prior to such release or termination.

                                    ARTICLE 5

                          DEFAULTS, REMEDIES AND RIGHTS

         SECTION 5.1. EVENTS OF DEFAULT. Any Event of Default under the Credit
Agreement, as well as any breach of the STATUTORY CONDITION, shall constitute an
"EVENT OF DEFAULT" under this Mortgage. All notice and cure periods provided in
the Credit Agreement and the other

                                       20
<PAGE>

Financing Documents shall run concurrently with any notice or cure periods
provided under applicable law.

         SECTION 5.2. REMEDIES. (a THIS MORTGAGE IS UPON THE STATUTORY CONDITION
FOR ANY BREACH OF WHICH THE MORTGAGEE SHALL HAVE THE STATUTORY POWER OF SALE. If
an Event of Default has occurred and is continuing, the Mortgagee shall have the
right and power to exercise any of the following remedies and rights, subject to
mandatory provisions of applicable law, to wit:

                    (i) the STATUTORY POWER OF SALE;

                    (ii) to institute a proceeding or proceedings, by
          advertisement, judicial process or otherwise as provided under
          applicable law, for the complete or partial foreclosure of this
          Mortgage or the complete or partial sale of the Mortgaged Property
          under the power of sale hereunder or under any applicable provision of
          applicable law; or

                    (iii) to sell the Mortgaged Property, and all estate, right,
          title, interest, claim and demand of the Mortgagor therein and
          thereto, and all rights of redemption thereof, pursuant to the
          STATUTORY POWER OF SALE, at one or more sales, as an entirety or in
          parcels, with such elements of real or personal property, at such time
          and place and upon such terms as the Mortgagee may deem expedient or
          as may be required under applicable law, and in the event of a sale
          hereunder or under any applicable provision of applicable law of less
          than all of the Mortgaged Property, this Mortgage shall continue as a
          Lien on the remaining Mortgaged Property; or

                    (iv) to institute a suit, action or proceeding for the
          specific performance of any of the provisions of this Mortgage; or

                    (v) to be entitled to the appointment of a receiver,
          supervisor, trustee, liquidator, conservator or other custodian (a
          "RECEIVER") of the Mortgaged Property, to the fullest extent permitted
          under applicable law, as a matter of right, without notice to the
          Mortgagor, and without regard to, or the necessity to disprove, the
          adequacy of the security for the Secured Obligations or the solvency
          of the Mortgagor or any other Person obligated therefor; and the
          Mortgagor hereby, to the full extent permitted under applicable law,
          irrevocably waives such necessity and consents to such appointment of
          such Receiver without notice; and said Receiver shall be vested with
          the fullest powers permitted under applicable law, including those
          under subsection (a)(v) of this Section; or

                    (vi) to enter upon the Property, by the Mortgagee or a
          Receiver (whichever is the Person exercising the rights under this
          clause), and, to the extent permitted under applicable law, exclude
          the Mortgagor and its managers, employees, contractors, agents and
          other representatives therefrom in accordance with applicable law,
          without liability for trespass, damages or otherwise, and take
          possession of all other Mortgaged Property and all books, records and
          accounts relating thereto, and upon demand the Mortgagor shall
          surrender possession of the Property, the other Mortgaged Property and
          such books, records and accounts to the Person exercising the rights
          under this clause; and having and holding the same, the Person
          exercising the rights under this clause may use, operate,

                                       21
<PAGE>

          manage, preserve, control and otherwise deal therewith and conduct the
          business thereof, either personally or by its managers, employees,
          contractors, agents or other representatives, without interference
          from the Mortgagor or its managers, employees, contractors, agents and
          other representatives; and, upon each such entry and from time to time
          thereafter, at the expense of the Mortgagor and the Mortgaged
          Property, without interference by the Mortgagor or its managers,
          employees, contractors, agents and other representatives, the Person
          exercising the rights under this clause may, as such Person deems
          expedient, (A) insure or reinsure the Property, (B) make all necessary
          or proper repairs, renewals, replacements, Restorations, alterations,
          additions, betterments and improvements to the Property and (C) in
          such Person's own name or, at the option of such Person, in the
          Mortgagor's name, exercise all rights, powers and privileges of the
          Mortgagor with respect to the Mortgaged Property, including the right
          to enter into Leases with respect to the Property, including Leases
          extending beyond the time of possession by the Person exercising the
          rights under this clause; and the Person exercising the rights under
          this clause shall not be liable to account for any action taken
          hereunder, other than for Rents actually received by such Person, and
          shall not be liable for any loss sustained by the Mortgagor resulting
          from any failure to let the Property or from any other act or omission
          of such Person, except to the extent such loss is caused by such
          Person's own willful misconduct or gross negligence; or

                    (vii) with or, to the fullest extent permitted under
          applicable law, without entry upon the Property, in the name of the
          Mortgagee or a Receiver (whichever is the Person exercising the rights
          under this clause) or, at such Person's option, in the name of the
          Mortgagor, to collect, receive, sue for and recover all Rents and
          proceeds of or derived from the Mortgaged Property, and after
          deducting therefrom all costs, expenses and liabilities of every
          character incurred by the Person exercising the rights under this
          clause in collecting the same and in using, operating, managing,
          preserving and controlling the Mortgaged Property and otherwise in
          exercising the rights under subsection (a)(v) of this Section or any
          other rights hereunder, including all amounts necessary to pay the
          Impositions, the Rents, the Insurance Premiums and other costs,
          expenses and liabilities relating to the Property, as well as
          compensation for the services of such Person and its managers,
          employees, contractors, agents or other representatives, to apply the
          remainder as provided in Section 5.06; or

                    (viii) to take any action with respect to any Mortgaged
          Property permitted under the UCC; or

                    (ix) to take any other action, or pursue any other remedy or
          right, as the Mortgagee may have under applicable law, including the
          right to foreclosure through court action, and the Mortgagor does
          hereby grant the same to the Mortgagee.

                    (b) To the fullest extent permitted under applicable law:

                    (i) each remedy or right hereunder shall be in addition to,
          and not in limitation of, any other remedy or right hereunder, under
          any other Financing Document or now or hereafter existing at law or in
          equity;

                                       22
<PAGE>

                    (ii) every remedy or right hereunder, under any other
          Financing Document or under applicable law may be exercised
          concurrently or independently and whenever and as often as deemed
          appropriate by the Mortgagee to the fullest extent permitted under
          applicable law;

                    (iii) no failure to exercise or delay in exercising any
          remedy or right hereunder, under any other Financing Document or under
          applicable law shall be construed as a waiver of any Default or other
          occurrence hereunder or under any other Financing Document;

                    (iv) no waiver of, failure to exercise or delay in
          exercising any remedy or right hereunder, under any other Financing
          Document or under applicable law upon any Default or other occurrence
          hereunder or under any other Financing Document shall be construed as
          a waiver of, or otherwise limit the exercise of, such remedy or right
          upon any other or subsequent Default or other occurrence hereunder or
          under any other Financing Document;

                    (v) no single or partial exercise of any remedy or right
          hereunder, under any other Financing Document or under applicable law
          upon any Default or other occurrence hereunder or under any other
          Financing Document shall preclude or otherwise limit the exercise of
          any other remedy or right hereunder, under any other Financing
          Document or under applicable law upon such Default or occurrence or
          upon any other or subsequent Default or other occurrence hereunder or
          under any other Loan Document;

                    (vi) the acceptance by the Mortgagee or any other Secured
          Party of any payment less than the amount of the Secured Obligation in
          question shall be deemed to be an acceptance on account only and shall
          not be construed as a waiver of any Default hereunder or under any
          other Financing Document with respect thereto; and

                    (vii) the acceptance by the Mortgagee or any other Secured
          Party of any payment of, or on account of, any Secured Obligation
          shall not be deemed to be a waiver of any Default or other occurrence
          hereunder or under any other Financing Document with respect to any
          other Secured Obligation.

          (c) If the Mortgagee has proceeded to enforce any remedy or right
hereunder or with respect hereto by foreclosure, sale, entry or otherwise, it
may compromise, discontinue or abandon such proceeding for any reason without
notice to the Mortgagor or any other Person (except other Secured Parties to the
extent required by the Financing Documents); and, if any such proceeding shall
be discontinued, abandoned or determined adversely for any reason, the Mortgagor
and the Mortgagee shall retain and be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, subject to the Lien
hereof, except to the extent any such adverse determination specifically
provides to the contrary.

          (d) To the fullest extent permitted under applicable law, for the
purpose of carrying out any provisions of Sections 5.02(a)(vi), 5.02(a)(vii),
5.05, 5.07 or 5.10 or any other provision

                                       23
<PAGE>

hereunder authorizing the Mortgagor or any other Person to perform any action on
behalf of the Mortgagor, the Mortgagor hereby irrevocably appoints the
Mortgagee, a Receiver appointed pursuant to Section 5.02(a)(v) or any other
Person designated by the Mortgagee or a Receiver as the attorney-in-fact of the
Mortgagor (with a power to substitute any other Person in its place as such
attorney-in-fact) to act in the name of the Mortgagor or, at the option of the
Person appointed to act under this subsection, in such Person's own name, to
take the action authorized under Sections 5.02(a)(vi), 5.02(a)(vii), 5.05, 5.07
or 5.10 or such other provision, and to execute, acknowledge and deliver any
document in connection therewith or to take any other action incidental thereto
as the Person appointed to act under this subsection shall deem appropriate in
its discretion; and the Mortgagor hereby irrevocably authorizes and directs any
other Person to rely and act on behalf of the foregoing appointment and a
certificate of the Person appointed to act under this subsection that such
Person is authorized to act under this subsection.

         SECTION 5.3. WAIVERS BY THE MORTGAGOR. To the fullest extent permitted
under applicable law, the Mortgagor shall not assert, and hereby irrevocably
waives, any right or defense the Mortgagor may have under any statute or rule of
law or equity now or hereafter in effect relating to (i) appraisement,
valuation, homestead exemption, extension, moratorium, stay, statute of
limitations, redemption, marshaling of the Mortgaged Property or the other
assets of the Mortgagor, sale of the Mortgaged Property in any order or notice
of deficiency or intention to accelerate any Secured Obligation; (ii) impairment
of any right of subrogation or reimbursement; (iii) any requirement that at any
time any action must be taken against any other Person, any portion of the
Mortgaged Property or any other asset of the Mortgagor or any other Person; (iv)
any provision barring or limiting the right of the Mortgagee to sell any
Mortgaged Property after any other sale of any other Mortgaged Property or any
other action against the Mortgagor or any other Person; (v) any provision
barring or limiting the recovery by the Mortgagee of a deficiency after any sale
of the Mortgaged Property; (vi) any other provision of applicable law (including
any provision relating to decedents' estates) which might defeat, limit or
adversely affect any right or remedy of the Mortgagee or the holders of the
Secured Obligations under or with respect to this Mortgage or the other
Collateral Documents as it relates to any Trust Property; or (vii) the right of
the Mortgagee to foreclose this Mortgage in its own name as Collateral Agent on
behalf of all of the Secured Parties by judicial action as the real party in
interest without the necessity of joining any other Secured Party. Nothing in
this Section shall be construed to limit any rights, including rights to notice,
afforded to the Mortgagor under this Mortgage or the other Financing Documents.

         SECTION 5.4. JURISDICTION AND PROCESS. (a) To the fullest extent
permitted under applicable law, in any suit, action or proceeding arising out of
or relating to this Mortgage or any other Collateral Document as it relates to
any Mortgaged Property, the Mortgagor (i) irrevocably consents to the
non-exclusive jurisdiction of any state or federal court sitting in the State in
which the Property is located and irrevocably waives any defense or objection
which it may now or hereafter have to the jurisdiction of such court over, the
venue of such court for or the convenience of such court as the forum for any
such suit, action or proceeding; and (ii) irrevocably consents to the service of
(A) any process in any such suit, action or proceeding, or (B) any notice
relating to any sale, or the exercise of any other remedy by the Mortgagee
hereunder by mailing a copy of such process or notice by United States
registered or certified mail, postage prepaid, return receipt requested to the
Mortgagor at its address for notices pursuant to Section 7.03, such service to
be effective when such process or notice is mailed as aforesaid.

                                       24
<PAGE>

          (b) Nothing in this Section shall affect the right of the Mortgagee or
the Mortgagor to bring any suit, action or proceeding arising out of or relating
to this Mortgage or any other Financing Document in any court having
jurisdiction under the provisions of any other Financing Document or applicable
law or to serve any process, notice of sale or other notice in any manner
permitted by any other Financing Document or applicable law.

         SECTION 5.5. SALES. Except as otherwise provided herein, to the fullest
extent permitted under applicable law, at the election of the Mortgagee, the
following provisions shall apply to any sale of the Mortgaged Property
hereunder, whether made pursuant to the power of sale hereunder, any judicial
proceeding or any judgment or decree of foreclosure or sale or otherwise:

          (a) The Mortgagee or the court officer (whichever is the Person
conducting any sale) may conduct any number of sales from time to time. The
power of sale hereunder or with respect hereto shall not be exhausted by any
sale as to any part or parcel of the Mortgaged Property which is not sold,
unless and until the Secured Obligations shall have been paid in full, and shall
not be exhausted or impaired by any sale which is not completed or is defective.
Any sale may be as a whole or in part or parcels and, to the fullest extent
permitted under applicable law, the Mortgagor hereby waives its right to direct
the order in which the Mortgaged Property or any part or parcel thereof is sold.

          (b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or adjourned
sale without further notice.

          (c) After each sale, the Person conducting such sale shall execute and
deliver to the purchaser or purchasers at such sale a good and sufficient
instrument or instruments granting, conveying, assigning, transferring and
delivering all right, title and interest of the Mortgagor in and to the
Mortgaged Property sold and shall receive the proceeds of such sale up to the
Maximum Secured Amount and apply the same as provided in Section 5.06. The
Mortgagor hereby irrevocably appoints the Person conducting such sale as the
attorney-in-fact of the Mortgagor (with full power to substitute any other
Person in its place as such attorney-in-fact) to act in the name of the
Mortgagor or, at the option of the Person conducting such sale, in such Person's
own name, to make without warranty by such Person any conveyance, assignment,
transfer or delivery of the Mortgaged Property sold, and to execute, acknowledge
and deliver any instrument of conveyance, assignment, transfer or delivery or
other document in connection therewith or to take any other action incidental
thereto, as the Person conducting such sale shall deem appropriate in its
discretion; and the Mortgagor hereby irrevocably authorizes and directs any
other Person to rely and act upon the foregoing appointment and a certificate of
the Person conducting such sale that such Person is authorized to act hereunder.
Nevertheless, upon the request of such attorney-in-fact the Mortgagor shall
promptly execute, acknowledge and deliver any documentation which such
attorney-in-fact may require for the purpose of ratifying, confirming or
effectuating the powers granted hereby or any such conveyance, assignment,
transfer or delivery by such attorney-in-fact.

          (d) Any statement of fact or other recital made in any instrument
referred to in Section 5.05(c) given by the Person conducting any sale as to the
non-payment of any Secured Obligation, the occurrence of any Event of Default,
the amount of the Secured Obligations due and payable, the request to the
Mortgagee to sell, the notice of the time, place and terms of sale and the

                                       25
<PAGE>

Mortgaged Property to be sold having been duly given, the refusal, failure or
inability of the Mortgagor to act, the appointment of any substitute or
successor agent or any other act or thing having been taken or done by the
Mortgagor, the Mortgagee or any other Person shall be taken as conclusive and
binding, absent manifest error, against all other Persons as evidence of the
truth of the facts so stated or recited. The Person conducting any sale may
appoint or delegate any other Person as agent to perform any act necessary or
incident to such sale, including the posting of notices and the conduct of such
sale, but in the name and on behalf of the Person conducting such sale.

          (e) The receipt by the Person conducting any sale of the purchase
money paid at such sale shall be sufficient discharge therefor to any purchaser
of any Mortgaged Property sold, and no such purchaser, or its representatives,
grantees or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price or any
part thereof upon or for any trust or purpose of this Mortgage or the other
Financing Documents or, in any manner whatsoever, be answerable for any loss,
misapplication or nonapplication of any such purchase money or be bound to
inquire as to the authorization, necessity, expediency or regularity of such
sale.

          (f) Subject to mandatory provisions of applicable law, any sale shall
operate to divest all of the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of the Mortgagor in and to the
Mortgaged Property sold, and shall be a perpetual bar both at law and in equity
against the Mortgagor and any and all Persons claiming such Mortgaged Property
or any interest therein by, through or under the Mortgagor.

          (g) At any sale, the Mortgagee may bid for and acquire the Mortgaged
Property sold and, in lieu of paying cash therefor, may make settlement for the
purchase price by causing the Secured Parties to credit against the Secured
Obligations, including the expenses of the sale and the cost of any enforcement
proceeding hereunder, the amount of the bid made therefor to the extent
necessary to satisfy such bid.

          (h) If the Mortgagor or any Person claiming by, through or under the
Mortgagor shall transfer or fail to surrender possession of the Mortgaged
Property, after the exercise by the Mortgagee or a Receiver of its remedies
under Section 5.02(a)(vi) or after any sale of the Mortgaged Property pursuant
hereto, then to the fullest extent permitted under applicable law, the Mortgagor
or such Person shall be deemed a tenant at sufferance of the purchaser at such
sale, subject to eviction by means of summary process for possession of land, or
subject to any other right or remedy available hereunder or under applicable
law.

          (i) Upon any sale, it shall not be necessary for the Person conducting
such sale to have any Mortgaged Property being sold present or constructively in
its possession.

          (j) If a sale hereunder shall be commenced by the Mortgagee, the
Mortgagee may at any time before the sale abandon the sale, and may institute
suit for the collection of the Secured Obligations or for the foreclosure of
this Mortgage; or if the Mortgagee shall institute a suit for collection of the
Secured Obligations or the foreclosure of this Mortgage, the Mortgagee may at

                                       26
<PAGE>

any time before the entry of final judgment in said suit dismiss the same and
sell the Mortgaged Property in accordance with the provisions of this Mortgage.

         SECTION 5.6. PROCEEDS. Except as otherwise provided herein or required
under any mandatory provision of applicable law, the proceeds of any sale of, or
other realization upon, the Mortgaged Property hereunder up to the Maximum
Secured Amount, whether made pursuant to the power of sale hereunder, any
judicial proceeding, any judgment or decree of foreclosure or sale or otherwise
shall be paid into the applicable Collateral Account and applied and paid as
follows:

          (a) FIRST: to the payment of all expenses of such sale or other
realization, including compensation for the Person conducting such sale (which
may include the Mortgagee), the cost of title searches, foreclosure certificates
and attorneys' fees and expenses incurred by such Person, together with interest
on any such expenses paid by such Person at the Post-Default Rate for Revolving
Loans from the date paid by such Person through the date repaid to such Person;

          (b) SECOND: to the payment of the expenses and other amounts payable
under Sections 4.04 or 7.02; and

          (c) THIRD: to the payment of the other Secured Obligations in the
order and priority set forth in Section 20 of the Security Agreement, until all
Secured Obligations shall have been paid in full; and

          (d) FOURTH: to pay to the Mortgagor or its successors and assigns, or
as a court of competent jurisdiction may direct, any surplus then remaining from
such proceeds.

         SECTION 5.7. ASSIGNMENT OF LEASES. (a) To the fullest extent permitted
under applicable law, subject to Section 5.07(d), the assignments of the Leases
and the Rents under Granting Clauses VI and VII are and shall be present,
absolute and irrevocable assignments by the Mortgagor to the Mortgagee and,
subject to the license to the Mortgagor under Section 5.07(b), the Mortgagee or
a Receiver appointed pursuant to Section 5.02(a)(v) (whichever is the Person
exercising the rights under this Section) shall have the absolute, immediate and
continuing right to collect and receive all Rents now or hereafter, including
during any period of redemption, accruing with respect to the Property. At the
request of the Mortgagee or such Receiver, the Mortgagor shall promptly execute,
acknowledge, deliver, record, register and file any additional general
assignment of the Leases or specific assignment of any Lease which the Mortgagee
or such Receiver may require from time to time (all in form and substance
satisfactory to the Mortgagee or such Receiver) to effectuate, complete,
perfect, continue or preserve the assignments of the Leases and the Rents under
Granting Clauses VI and VII.

          (b) So long as an Event of Default is not continuing, the Mortgagor
shall have a license to collect and receive all Rents (but not prior to thirty
(30) days before the due date thereof) and apply the same subject to the
provisions of the Financing Documents, such license to be terminable as provided
in Section 5.07(c).

          (c) If an Event of Default has occurred and is continuing, the
Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(v) (whichever is
the Person exercising the rights under this Section) shall have the right to
terminate the license granted under Section 5.07(b) by notice to the

                                       27
<PAGE>

Mortgagor and to exercise the rights and remedies provided under Section
5.07(a), under Sections 5.02(a)(vi) and (vi) or under applicable law. If an
Event of Default is continuing, upon demand by the Person exercising the rights
under this Section, the Mortgagor shall promptly pay to such Person all Security
Deposits under the Leases and all Rents allocable to any period after such
demand. Subject to Sections 5.02(a)(vi) and (vi) and any applicable requirement
of law, any Rents received hereunder by such Person exercising the rights under
this Section shall be promptly paid to the Mortgagee, and any Rents received
hereunder by the Mortgagee shall be deposited in the applicable Collateral
Account, to be held, applied and disbursed as provided in the Security
Agreement, PROVIDED that, subject to Sections 5.02(a)(vi) and (vi) and any
mandatory requirement of applicable law, any Security Deposits actually received
by such Person shall be promptly paid to the Mortgagee, and any Security
Deposits actually received by the Mortgagee shall be held, applied and disbursed
as provided in the applicable Leases and applicable law. If after the occurrence
of an Event of Default all Events of Default shall have been fully cured or
waived as provided in the Credit Agreement, the license granted in Section
5.07(b) shall automatically be reinstated.

          (d) Nothing herein shall be construed to be an assumption by the
Person exercising the rights under this Section, or otherwise to make such
Person liable for the performance, of any of the obligations of the Mortgagor
under the Leases, PROVIDED that such Person shall be accountable as provided in
Section 5.07(c) for any Rents or Security Deposits actually received by such
Person.

         SECTION 5.8. DEALING WITH THE MORTGAGED PROPERTY. Subject to Section
7.01, the Mortgagee shall have the right to release any portion of the Mortgaged
Property, or grant or consent to the granting of any Lien affecting any portion
of the Mortgaged Property at the request of the Mortgagor, in each case, for
such consideration as the Mortgagee may require without, as to the remainder of
the Mortgaged Property, in any way impairing or affecting the Lien or priority
of this Mortgage, improving the position of any subordinate lienholder with
respect thereto or impairing or affecting the rights of any maker, guarantor,
endorser, co-maker or other obligor of the Secured Obligations, except to the
extent that the Secured Obligations shall have been reduced by any actual
monetary consideration received for such release and applied to the Secured
Obligations, and may accept by assignment, pledge or otherwise any other
property in place thereof as the Mortgagee may require without being accountable
therefor to any other lienholder.

         SECTION 5.9. RIGHT OF ENTRY. The Mortgagee and its representatives
shall have the right (but not the obligation) (i) without prior notice if an
Event of Default is continuing, or (ii) with simultaneous notice, if any payment
or performance is immediately required in the reasonable opinion of the
Mortgagee to preserve the Mortgagee's right under this Mortgage or with respect
to the Mortgaged Property or (iii) after reasonable notice in all other cases,
to enter upon the Property at all reasonable times and with reasonable frequency
to inspect the Mortgaged Property or, subject to the provisions hereof, to
exercise any right, power or remedy of the Mortgagee hereunder, PROVIDED that
any Person so entering the Property shall not unreasonably interfere with the
ordinary conduct of the Mortgagor's business, and PROVIDED FURTHER that no such
entry on the Property for the purpose of performing obligations under Section
5.10 or for any other purpose shall be construed to be (x) possession of the
Property by such Person or to constitute such Person as a beneficiary, trustee
or mortgagee in possession, unless such Person exercises its right to take
possession of the Property under Section 5.02(a)(vi), or (y) a cure of any
Default or waiver of any

                                       28
<PAGE>

Default or Secured Obligation. The expense of any inspection pursuant to clause
(iii) above shall be borne by the Mortgagee unless an Event of Default shall
have occurred and be continuing at the time of such inspection, in which case
the Mortgagor shall reimburse the Mortgagee for such expense.

         SECTION 5.10. RIGHT TO PERFORM OBLIGATIONS. If the Mortgagor fails to
pay or perform any obligation of the Mortgagor hereunder, the Mortgagee and its
representatives shall have the right (but not the obligation) to pay or perform
such obligation of the Mortgagor (i) without notice, if an Event of Default is
continuing, (ii) with simultaneous notice, if such payment or performance is
immediately required in the reasonable opinion of the Mortgagee to preserve the
Mortgagee's rights under this Mortgage or with respect to the Mortgaged Property
or (iii) otherwise, after notice given reasonably in advance to allow the
Mortgagor an opportunity to pay or perform the same, PROVIDED that the Mortgagor
is not contesting such payment or performance as provided in Section 2.06, and
PROVIDED FURTHER no such payment or performance by the Mortgagee or its
representatives shall be construed to be a cure of any Default or waiver of any
Default or Secured Obligation. The Mortgagor shall reimburse the Mortgagee on
demand for its reasonable costs in connection with paying or performing any such
obligation of the Mortgagor (including reasonable attorneys' fees and expenses),
together with interest from the date of demand for each day until paid at the
Post-Default Rate for Base Rate Loans.

                                    ARTICLE 6

                      SECURITY AGREEMENT AND FIXTURE FILING

         SECTION 6.1. SECURITY AGREEMENT. To the extent that the Mortgaged
Property constitutes or includes tangible or intangible personal property,
including goods or items of personal property which are or are to become
fixtures under applicable law, the Mortgagor hereby grants a security interest
therein and this Mortgage shall also be construed as a pledge and a security
agreement under the UCC; and, upon the occurrence and continuance of an Event of
Default, the Mortgagee shall be entitled to exercise with respect to such
tangible or intangible personal property all remedies available under the UCC
and all other remedies available under applicable law. Without limiting the
foregoing, upon the occurrence and continuation of an Event of Default, any
personal property may, at the Mortgagee's option and, except as otherwise
required by applicable law, without the giving of notice, (i) be sold hereunder,
(ii) be sold pursuant to the UCC or (iii) be dealt with by the Mortgagee in any
other manner permitted under applicable law. The Mortgagee may require the
Mortgagor to assemble the personal property and make it available to the
Mortgagee at a place to be designated by the Mortgagee. At any time and from
time to time upon the occurrence and continuance of an Event of Default, the
Mortgagee shall be the attorney-in-fact of the Mortgagor with respect to any and
all matters pertaining to the personal property with full power and authority to
give instructions with respect to the collection and remittance of payments, to
endorse checks, to enforce the rights and remedies of the Mortgagor and to
execute on behalf of the Mortgagor and in Mortgagor's name any instruction,
agreement or other writing required therefor. The Mortgagor acknowledges and
agrees that a disposition of the personal property in accordance with the
Mortgagee's rights and remedies in respect to the other Mortgaged Property as

                                       29
<PAGE>

heretofore provided is a commercially reasonable disposition thereof.
Notwithstanding the foregoing, to the extent that the Mortgaged Property
includes personal property (that is not a fixture or otherwise become real
property under applicable law) covered by the Security Agreement, the provisions
of the Security Agreement shall govern with respect to such personal property.

         SECTION 6.2. FIXTURE FILING. To the extent that the Mortgaged Property
includes goods or items of personal property which are or are to become fixtures
under applicable law, and to the fullest extent permitted under applicable law,
the filing of this Mortgage in the real estate records of the county in which
the Property is located shall also operate from the time of filing as a fixture
filing with respect to such Mortgaged Property, and the following information is
applicable for the purpose of such fixture filing, to wit:

          (a)   Name and Address of the debtor:

                           Polaroid Corporation
                           784 Memorial Drive
                           Cambridge, MA 02139
                           Attention: Benjamin C. Byrd III
                           Vice President
                           Facsimile: 781-833-3358

          (b)   Name and Address of the secured party:

                           Morgan Guaranty Trust Company of New York
                           as Collateral Agent
                           c/o JP Morgan Services Inc.
                           500 Stanton Christiana Road
                           Newark, DE 19713
                           Attention: Mark Connor
                           Facsimile: 302-634-4300

          (c) This document covers goods or items of personal property which are
or are to become fixtures upon the Property.

          (d) The name of the record owner of the real estate on which such
fixtures are or are to be located is Polaroid Corporation.

                                    ARTICLE 7

                                  MISCELLANEOUS

          SECTION 7.1. RELEASE OF MORTGAGED PROPERTY. (a) This Mortgage shall
terminate and thereafter be of no further force or effect (except as provided in
Section 4.03) as follows:

                                       30
<PAGE>

                  (i) when the Mortgagee shall have received instructions to
         release any Mortgaged Property from the Lien of this Mortgage pursuant
         to Section 2.17 of the Credit Agreement, the Lien of this Mortgage in
         such Mortgaged Property shall terminate and all rights to each item of
         such Mortgaged Property shall revert to the Mortgagor, PROVIDED that,
         upon any sale of the Mortgaged Property permitted under the Credit
         Agreement to the extent such assets constitute Existing Collateral,
         arrangements satisfactory to the Administrative Agent shall be entered
         into in order to transfer to the Administrative Agent a portion of cash
         proceeds sufficient to make the prepayment of Loans, if any, as
         required by Section 2.17(b) of the Credit Agreement and to the extent
         such Mortgaged Property constitutes Additional Collateral (as defined
         in the Security Agreement), the Collateral Agent will establish an
         account with the Administrative Agent, in the name and under the
         exclusive control of the Collateral Agent, into which all cash proceeds
         of the sale shall be deposited; or

                 (ii) when (A) all the Commitments shall have expired or been
         terminated, (B) all Hedging Agreements that are Secured Obligations
         shall have expired or been terminated, (C) all outstanding Secured
         Obligations shall have been paid in full, and (D) if any material
         portion of such Secured Obligations shall have been refinanced on a
         secured basis, all Contingent Secured Obligations shall have expired or
         been terminated, the Lien of this Mortgage shall terminate and all
         rights to the Mortgaged Property shall revert to the Mortgagor.

          (b) Upon any such termination of this Mortgage or release of Mortgaged
Property, the Mortgagee shall, at the expense of the Mortgagor, execute,
acknowledge and deliver to the Mortgagor such documents, without warranty or
recourse, as the Mortgagor shall reasonably request to evidence the release of
Mortgaged Property or termination of this Mortgage, as the case may be.

          SECTION 7.2. CONCERNING THE MORTGAGEE. The provisions of the following
Sections of the Security Agreement:

             Section 12    Other Collateral Accounts
             Section 18    Fees and Expenses; Indemnification
             Section 19    Limitation on Duty of Collateral Agent in Respect of
                           Collateral
             Section 21    Concerning the Collateral Agent
             Section 22    Appointment of Co-agents
             Section 23    Preservation of Collateral; Recovery of Expenses

are incorporated in this Mortgage by reference as though set forth in full
herein, with the following changes being made therein as incorporated herein:

                    (i) all references in said incorporated Sections to the
          "Collateral Agent" and "Administrative Agent" are deemed changed
          herein to refer to the "Mortgagee";

                    (ii) all references in said incorporated Sections to the
          "Collateral" are deemed changed herein to refer to the "Mortgaged
          Property";

                                       31
<PAGE>

                    (iii) all references in said incorporated Sections to any
          "Lien Grantor" are deemed changed herein to refer to the "Mortgagor";

                    (iv) all references to the "Company" in said incorporated
          Section 18 are deemed changed herein to refer to the "Mortgagor"; and

                    (v) all references in said incorporated Sections to
          "herein", "hereunder", "hereof", and words of similar import are
          deemed herein to refer to such incorporated Sections and this
          Mortgage.

         SECTION 7.3. NOTICES. All notices, requests and other communications
required or permitted to be given under this Mortgage shall be in writing
(including facsimile, transmission or similar writing) and shall be given to the
Mortgagor or the Mortgagee as specified in Section 20 of the Security Agreement.
Except as otherwise provided herein, each notice, request or other communication
shall be effective as determined by Section 20 of the Security Agreement.

         SECTION 7.4. AMENDMENTS IN WRITING. No provision of this Mortgage shall
be modified, waived or terminated, and no consent to any departure by the
Mortgagor from any provision of this Mortgage shall be effective, unless the
same shall be by an instrument in writing, signed by the Mortgagor and the
Mortgagee (with the written consent of the Required Lenders; PROVIDED that (i)
the written consent of all Lenders shall be required to modify Section 5.06 or
this Section 7.04 and (ii) the written consent of the Super-Majority Lenders
shall be required to modify Section 7.01 or the definition of "Secured
Obligations"). Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

         SECTION 7.5. SEVERABILITY. All rights, powers and remedies provided in
this Mortgage may be exercised only to the extent that the exercise thereof does
not violate applicable law, and all the provisions of this Mortgage are intended
to be subject to all mandatory provisions of applicable law and to be limited to
the extent necessary so that they will not render this Mortgage illegal,
invalid, unenforceable or not entitled to be recorded, registered or filed under
applicable law. If any provision of this Mortgage or the application thereof to
any Person or circumstance shall, to any extent, be illegal, invalid or
unenforceable, or cause this Mortgage not to be entitled to be recorded,
registered or filed, the remaining provisions of this Mortgage or the
application of such provision to other Persons or circumstances shall not be
affected thereby, and each provision of this Mortgage shall be valid and be
enforced to the fullest extent permitted under applicable law.

         SECTION 7.6. BINDING EFFECT. (a) The provisions of this Mortgage shall
be binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns; and all references herein to the "MORTGAGOR"
and the "MORTGAGEE" shall include the respective successors and assigns of such
parties, PROVIDED that the Mortgagor may not assign or otherwise Transfer any of
its rights or obligations under this Mortgage without the consent of all of the
Lenders.

          (b) To the fullest extent permitted under applicable law, the
provisions of this Mortgage binding upon the Mortgagor shall be deemed to be
covenants which run with the land.

                                       32
<PAGE>

          (c) Nothing in this Section shall be construed to permit the Mortgagor
to Transfer or grant a Lien upon the Mortgaged Property contrary to the
provisions of the Credit Agreement.

         SECTION 7.7. GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE MORTGAGED
PROPERTY IS LOCATED, WITHOUT REGARD TO SUCH STATE'S CONFLICTS OF LAW PRINCIPLES.

         SECTION 7.8. WAIVER OF TRIAL BY JURY. EACH OF THE MORTGAGOR AND THE
MORTGAGEE HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS MORTGAGE.

         SECTION 7.9. SUBMISSION TO JURISDICTION. Each of the Mortgagor and the
Mortgagee hereby irrevocably submits to the nonexclusive jurisdiction of the
United States District Court for the District in which the Mortgaged Property is
located and of any State court for the jurisdiction in which the Mortgaged
Property is located for purposes of any legal proceeding arising out of or
relating to this Mortgage. Each of the Mortgagor and the Mortgagee hereby
irrevocably waives, to the fullest extent permitted under applicable law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

         SECTION 7.10. COUNTERPARTS. This Mortgage may be signed in any number
of counterparts, each of which shall be an original.

                                       33
<PAGE>

         IN WITNESS WHEREOF, the Mortgagor has executed and delivered this
Mortgage under seal as of the date first set forth above.

                                            Mortgagor:
POLAROID CORPORATION

                                            By:   /s/ BENJAMIN C. BYRD III
                                                  ----------------------------
                                                  Name:  BENJAMIN C. BYRD III
                                                  Title: VICE PRESIDENT<PAGE>

                                                                    EXHIBIT 10.9

                                Dated MARCH 2001

                             POLAROID (U.K.) LIMITED

                                   as Borrower

                              POLAROID CORPORATION
                                  as Guarantor

                           DEUTSCHE BANK AG, AMSTERDAM
                                    as Agent

                                   and Others

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

<PAGE>

                                    CONTENTS
<TABLE>
<CAPTION>

CLAUSE                                                                                                 PAGE
<S>                                                                                                 <C>

1.         DEFINITIONS, INTERPRETATION AND RESTATEMENT.................................................4

2.         WAIVERS.....................................................................................4

3.         AMENDMENTS TO THE UK FACILITY AGREEMENT.....................................................5

4.         ADDITIONAL INFORMATION......................................................................6

5.         LAPSE OF WAIVER.............................................................................6

6.         FINANCE DOCUMENT............................................................................6

7.         INTEREST AND FEES...........................................................................7

8.         RELEASE OF LENDERS..........................................................................7

9.         REPRESENTATIONS.............................................................................7

10.        CONSENT BY GUARANTOR........................................................................8

11.        JURISDICTION AND PROCESS AGENT..............................................................8

12.        COUNTERPARTS................................................................................8

13.        WAIVER FEE..................................................................................8

14.        CONTINUITY AND FURTHER ASSISTANCE...........................................................8

15.        FEES, COSTS AND EXPENSES....................................................................8

16.        GOVERNING LAW...............................................................................9
</TABLE>

<PAGE>

THIS AGREEMENT is dated March 2001 and made between:

(1)      POLAROID (U.K.) LIMITED, a company incorporated in England (number
         00732757), of Wheathampstead House, Codicote Road, Wheathampstead,
         Hertfordshire AL4 8SF (the "BORROWER");

(2)      POLAROID CORPORATION, a company incorporated in the United States of
         America, of 784 Memorial Drive, Cambridge, MA 02139, USA (the
         "GUARANTOR");

(3)      THE LENDERS named as such on the execution pages of this Agreement;

(4)      DEUTSCHE BANC ALEX BROWN INC. and ABN AMRO BANK N.V., as co-arrangers
         (the "CO-ARRANGERS");

(5)      DEUTSCHE BANK AG, Amsterdam, as agent (the "AGENT"); and

(6)      ABN AMRO BANK N.V. as documentation agent (the "DOCUMENTATION AGENT").

RECITALS

(A)     On 11 December 1998 Polaroid Corporation entered into a credit agreement
        with Morgan Guaranty Trust Company of New York, Bankboston N.A. and
        others (the "US Facility Agreement") pursuant to which a loan in an
        aggregate amount of $350,000,000 was made available to Polaroid
        Corporation.

(B)     On 3rd August 1999 the parties hereto entered into a multicurrency
        revolving credit facility agreement (the "UK Facility Agreement")
        pursuant to which a facility in the amount of euros 72,500,000 was made
        available to the Borrower. Certain provisions in the UK Facility
        Agreement have been drafted by reference to, or include an obligation to
        comply with, certain terms of the US Facility Agreement, including the
        financial covenants set out in section 5 of the US Facility Agreement.
        Accordingly a default in relation to those provisions under the US
        Facility Agreement will give rise to a default under the UK Agreement.

(C)     The Guarantor has advised the Lenders that it believes that (i) as at
        the end of the first Fiscal Quarter of Fiscal Year 2001 and at
        subsequent times thereafter the ratio of its Consolidated EBITDA to
        Consolidated Interest Expense will not meet the requirements of Section
        5.07 of the US Facility Agreement and (ii) during the first and second
        Fiscal Quarters of Fiscal Year 2001 its Debt/EBITDA Ratio may not have
        met and in the future will not meet the requirements of Section 5.08(a)
        of the US Facility Agreement.

(D)     With effect from 16 February 2001, the Lenders under the US Facility
        Agreement granted to the Guarantor an interim waiver of the requirements
        of Sections 5.07 and 5.08(a) of the US Facility Agreement.

(E)     The Beneficiaries agreed to grant the Borrower and Guarantor a waiver in
        relation to the UK Facility Agreement and to waive any rights arising
        under any other Finance Document as a consequence of any default
        referred to in Clause 2.1 below.

<PAGE>

IT IS AGREEED as follows: -

1.       DEFINITIONS, INTERPRETATION AND RESTATEMENT

1.1      Unless otherwise specifically defined herein, each term used herein
         which is defined in the UK Facility Agreement shall have the meaning
         assigned to such term in the UK Facility Agreement save that all terms
         referred to in recital (C) above shall, unless otherwise defined
         herein, bear the meanings ascribed to them in the US Facility
         Agreement. 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 UK
         Facility Agreement shall, after this Agreement becomes effective, refer
         to the UK Facility Agreement as modified hereby for the period any
         waiver granted under this Agreement remains in effect.

1.2      This Agreement shall be effective from the date on which the Agent
         shall have received from each of the parties hereto a counterpart
         hereof signed by such party or a facsimile evidencing that such party
         has signed a counterpart hereof and shall supersede any other agreement
         entered into in relation to a waiver of the matters referred to herein.

2.       WAIVERS

2.1      Each Beneficiary hereto waives:

         (i)      any breach of representation or covenant under Clauses 17 or
                  19 of the UK Facility Agreement; and

         (ii)     any Termination Event or Potential Termination Event under the
                  UK Facility Agreement; and

         (iii)    any rights which any of the Beneficiaries may otherwise be
                  entitled to exercise pursuant to any of the other Finance
                  Document;

         which, in any case, may occur or arise or may have occurred or arisen
         solely on account of the Guarantor's failure to be in compliance with
         Section 5.07 or Section 5.08(a) of the US Facility Agreement as at any
         time during the first and second Fiscal Quarters of Fiscal Year 2001
         (as defined in the US Facility Agreement).

2.2      The waiver set out in Clause 2.1 shall be effective solely for the
         period (the "WAIVER PERIOD") beginning on February 16, 2001 and ending
         on the earlier of (i) 5:00 P.M. (New York City time) on May 15, 2001,
         (ii) the date on which any waiver granted in relation to the US
         Facility Agreement pursuant to the waiver letter referred to in recital
         (D) above, as extended (if extended), expires and (iii) such earlier
         time as is determined pursuant to Clause 5 of this Agreement (the
         "WAIVER EXPIRY TIME").

2.3      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;

<PAGE>

         (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;

         (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 (a) the Guarantor fails to be in compliance with
                  Section 5.07 or 5.08(a) of the US Facility Agreement
                  immediately following the Waiver Expiry Time 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.

3.       AMENDMENTS TO THE UK FACILITY AGREEMENT

3.1      The parties hereto agree that with effect from 16 February 2001 the UK
         Facility Agreement shall be amended as follows:

         (a)      Clause 2.2 of the UK Facility Agreement shall be amended to
                  read as follows:

                  "The Borrower agrees to use the proceeds of the Facility for
                  general corporate purposes including refinancing existing
                  facilities Provided that the Borrower agrees that none of the
                  proceeds of the Facility shall be used for the purpose of
                  making any payments of any nature whatsoever under or in
                  connection with the Guarantor's Revolving Credit Agreement."

         (b)      Clause 3.4 of the UK Facility Agreement shall be deleted.

         (c)      Clause 6.8 of the UK Facility Agreement shall be deleted, the
                  reference to the words " Clause 6.8 applies to sub-paragraphs
                  (C) and (D)" at the end of Clause 6.4 shall be deleted, the
                  words "The representation in Clause 17.1 (I) will only be deem
                  repeated under this sub-clause on the date of a notice of
                  borrowing and on an Advance Date when Clause 6.8 does not
                  apply" in Clause 17.2 shall be deleted and all other
                  references to Clause 6.8 in the UK Facility Agreement shall be
                  deleted.

         (d)      Notwithstanding the provisions of Clause 19 of the UK Facility
                  Agreement (and in particular Clause 19.2 of the UK Facility
                  Agreement pursuant to which the Guarantor is under an
                  obligation to comply with Section 5.13 and 5.15 of the US
                  Facility Agreement), neither the Borrower nor any person which
                  has provided an Additional Guarantee in respect of the UK
                  Facility Agreement will:-

                  (i)      make or acquire any Investment (as such term is
                           defined in the US Facility Agreement) in any other
                           member of the Guarantor's Group; or

<PAGE>

                  (ii)     sell, lease, transfer or otherwise dispose, whether
                           directly or indirectly, of any of its assets to any
                           other member of the Guarantor's Group

                  except where it does so in the ordinary course of business.

         (e)      Clause 25.3 of the UK Facility Agreement shall be amended to
                  read as follows:-

                  "The Borrower agrees to reimburse the Agent and each Lender
                  for any reasonable expenses they incur, including reasonable
                  fees and disbursements of counsel to the Agent and/or the
                  Lenders, in connection with any waiver or consent under a
                  Finance Document or any amendment to a Finance Document".

         (f)      Clause 26.3 (D) of the UK Facility Agreement shall no longer
                  be applicable.

3.2      The Borrower agrees that, notwithstanding any other terms of the UK
         Facility Agreement, it shall not at any time deliver any notice
         requesting a borrowing under the Facility, and the Lenders shall have
         no obligation to fund any borrowings under the Facility, which would
         result in the aggregate amount of the Loan immediately following any
         such borrowing exceeding Euro 57,000,000.

4.       ADDITIONAL INFORMATION

4.1      The Guarantor agrees that promptly, and in any event no later than 30
         March 2001, it will prepare and deliver to the Agent a summary setting
         out (i) details of all assets of the Guarantor's Group (including, but
         without limitation, real estate (including land and plants, warehouses
         or other buildings and improvements), equipment, patents, trademarks
         and other intellectual property, other general intangibles and cash and
         deposits) in respect of which a Lien (as such term is defined in the US
         Facility Agreement) has been granted in favour of the Lenders under the
         Finance Documents and (ii) details of, and the book value of, all
         assets currently forming part of Inventory or Receivables for the
         purpose of Clause 6.2 of the UK Facility Agreement.

4.2      Each of the Guarantor and the Borrower agree to fully co-operate into
         and assist any consultants or agents appointed by either the Guarantor
         or the Borrower to verify the value of any of the assets of the
         Guarantor's Group, including providing them such information as they
         may request to enable them to make any such valuation.

5.       LAPSE OF WAIVER

         Each of the Guarantor and the Borrower agree that its failure to comply
         with any provision of this Agreement shall cause the waivers granted
         hereby to cease to be in effect (i) in the case of a breach of Clause 4
         or a breach after 16 February 2001 of any the amendments contemplated
         by Clause 3, immediately and without the requirement of any prior
         notice from or further action on the part of any Lender or the Agent
         and (ii) in any other case, if such failure continues for more than
         five days after notice from the Agent given at the direction of the
         Lenders.

6.       FINANCE DOCUMENT

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

<PAGE>

7.       INTEREST AND FEES

         Each of the Guarantor and the Borrower agree that (i) during the period
         commencing on 5 March 2001 and ending on the last day of the Waiver
         Period and (ii) if immediately after the Waiver Period ends any
         Termination Event has occurred and is continuing, during any period
         that any such Termination Event continues to exist, the Facility Fee
         Rate and the Applicable Margin shall be as set forth in the table
         below, regardless of the Guarantor's Long-Term Debt Ratings.

                      Facility Fee Rate                  0.75%
                      Applicable Margin                  2.50%

8.       RELEASE OF LENDERS

         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.

9.       REPRESENTATIONS

9.1      Each of the Guarantor and the Borrower represent and warrant that (i)
         the representations and warranties of the Guarantor and the Borrower
         set forth in Clause 17 of the UK Facility Agreement were true on and as
         of 16 March, 2001 and are true on and as of the date hereof (taking
         into account, in the case of the representation set out in Clause
         17.1(I) of the UK Facility Agreement, the waivers granted pursuant to
         this Agreement and, in the case of the representation set out in Clause
         17.1(J), as updated by Clause 17.2 of the UK Facility Agreement) and
         (ii) no Termination Event or Potential Termination Event had or has
         occurred and was or is continuing on either of the dates referred to
         above, except in any case as expressly contemplated to be waived by
         this Agreement.

9.2      Without limiting the generality of the foregoing, the Guarantor further
         represents and warrants that all information (other than projections)
         heretofore furnished by it or the Borrower to the Agent or any Lender
         for purposes of or in connection with this Agreement does not, and all
         such information hereafter furnished by it or the Borrower to the Agent
         or any Lender will not, contain any untrue statement of a material fact
         or omit to state any

<PAGE>

         material fact necessary in order to make the statements therein, in
         light of the circumstances under which they are or will be made, not
         misleading, and all projections included in any such information are or
         will be based upon good faith estimates and assumptions believed by the
         Guarantor's senior management to be reasonable at the time prepared,
         and at the time prepared represent senior management's reasonable best
         estimate of the future performance of the operations of the Guarantor
         and its Subsidiaries.

10.      CONSENT BY GUARANTOR

         By its signature below, the Guarantor hereby consents to this
         Agreement, and acknowledges that this Agreement 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.

11.      JURISDICTION AND PROCESS AGENT

         The provisions of Clauses 27.2 and 27.3 of the UK Facility Agreement
         shall be incorporated, MUTATIS MUTANDIS, into the Agreement.

12.      COUNTERPARTS

         This Agreement 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.

13.      WAIVER FEE

         On the date specified by the Agent, the Guarantor shall pay the Agent
         in immediately available funds for the account of each Lender a waiver
         fee in an amount equal to 0.25% of such Lender's Commitment (as of the
         opening of business on 16 March 2001).

14.      CONTINUITY AND FURTHER ASSISTANCE

14.1     The provisions of the UK Facility Agreement shall, save as amended or
         waived in this Agreement, continue in full force and effect.

14.2     Each of the Borrower and the Guarantor shall, at the request of the
         Agent and at its own expense, do all such acts and things necessary or
         desirable to give effect to the amendments effected or to be effected
         pursuant to this Agreement.

15.      FEES, COSTS AND EXPENSES

15.1     The Guarantor shall promptly on demand pay the Agent and each of the
         Lenders, the amount of all costs and expenses (including legal fees)
         reasonably incurred by any of them in connection with the negotiation,
         preparation, printing and execution of this Agreement and any other
         agreements entered into in connection with any of the matters referred
         to herein.

15.2     The Guarantor shall, within three Business Days of demand, pay to each
         Beneficiary the amount of all costs and expenses (including legal fees)
         incurred by that Beneficiary in connection with the enforcement of, or
         the preservation of any rights under this Agreement.

15.3     The Guarantor shall, within three Business Days of demand, indemnify
         each Beneficiary against any cost, loss or liability that Beneficiary
         incurs in relation to all stamp duty,

<PAGE>

         registration and other similar taxes payable in respect of this
         Agreement and any other agreements entered into in connection with any
         of the matters referred to herein.

16.      GOVERNING LAW

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

         This Agreement has been entered into on the date stated at the
         beginning of this Agreement.

<PAGE>

        CO-ARRANGERS AND DOCUMENTATION AGENT

        DEUTSCHE BANC ALEX BROWN INC.

        as Co-Arranger

        By: /s/ DAVID MAYHEW
            ------------------------------------
        Title: VICE PRESIDENT

        By: /s/ RYAN ZANIN
            ------------------------------------
        Title: MANAGING DIRECTOR

        ABN AMRO BANK N.V.

        as Co-Arranger and Documentation Agent

        By: /s/ WILLIAM J. FITZGERALD
            ------------------------------------
        Title:

        By: /s/ WILLIAM J. TERESKY, JR.
            ------------------------------------
        Title: GROUP VICE PRESIDENT

        LENDERS

        ABN AMRO BANK N.V.

        By: /s/ WILLIAM J. FITZGERALD
            ------------------------------------
        Title:

        By: /s/ WILLIAM J. TERESKY, JR.
            ------------------------------------
        Title: GROUP VICE PRESIDENT

<PAGE>

        DEUTSCHE BANK A.G., LONDON BRANCH

        By: /s/ DAVID MAYHEW
            ------------------------------------
        Title: VICE PRESIDENT

        By: /s/ RYAN ZANIN
            ------------------------------------
        Title: MANAGING DIRECTOR

        THE AGENT

        DEUTSCHE BANK A.G., AMSTERDAM BRANCH

        By: /s/ DAVID MAYHEW
            ------------------------------------
        Title: VICE PRESIDENT

        By: /s/ RYAN ZANIN
            ------------------------------------
        Title: MANAGING DIRECTOR

<PAGE>

       POLAROID CORPORATION

       By: /s/ CARL L. LUEDERS
           ------------------------------------

       Title: ACTING CHIEF FINANCIAL OFFICER

       Date:

       POLAROID (U.K.) LIMITED

       By: /s/ CARL L. LUEDERS
           ------------------------------------

       Title: ACTING CHIEF FINANCIAL OFFICER

       Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00023-of-00352.parquet"}]]