February 10, 1999


Smith Corona Corporation
839 Route 13 South
Cortland, New York 13045


                Re:    Waiver and Amendment to Financing Agreement


Gentlemen:

     Reference is made to the financing arrangements between 
Congress Financial Corporation ("Lender") and Smith Corona 
Corporation ("Borrower") pursuant to the terms of the Loan and 
Security Agreement, dated as of February 28, 1997, between 
Borrower and Lender (the "Loan Agreement" and, together with any 
supplements thereto and all other agreements, documents and 
instruments between Borrower and Lender relating thereto, as the 
same have heretofore been amended, or as same have 
contemporaneously been or may be hereafter amended, modified, 
supplemented, extended, renewed, restated or replaced, 
collectively, the "Financing Agreements").  Capitalized terms 
used herein shall have the meanings ascribed thereto in the Loan 
Agreement and in the other Financing Agreements, unless otherwise 
defined herein.

     In consideration of the mutual agreements and covenants 
contained herein and other good and valuable consideration, the 
parties hereto agree as follows:

      1.    Adjusted Net Worth.  Lender hereby waives the default 
by Borrower under Section 9.13 of the Loan Agreement ("Adjusted 
Net Worth") until and including the date immediately prior to the 
date hereof.  Effective as of the date hereof, existing Section 
9.13 of the Loan Agreement shall be deleted and the following 
inserted in its stead:

      "9.13 Adjusted Net Worth.  Borrower shall, at all 
times, maintain Adjusted Net Worth of not less than (a) 
one ($1.00) dollar until June 29, 1999, and (b) 
$2,000,000 at June 30, 1999 and at all times 
thereafter."


     2.     Inventory Advance Rate.  Section 2.1(a)(ii) of the 
Loan Agreement shall be and is hereby amended by (a) deleting both 
references to "fifty (50%) percent" therein and inserting "forty-
five (45%) percent" in their stead, and (b) inserting the 
following provision immediately after clause (B) thereof and 
before the words "provided, however":

          "or (C) eighty (80%) percent of the amount equal to the 
product of the cost of Eligible Inventory multiplied by 
the percentage of the net orderly liquidation value to 
the cost of the various types of such Eligible 
Inventory as set forth in the most recent appraisal 
received by Lender pursuant to Section 7.3(d) of this 
Agreement,".

      3.    Letter of Credit.  Section 2.2(c)(i) of the Loan 
Agreement shall be and is hereby amended by deleting the 
reference to "fifty (50%) percent" therein and inserting "fifty-
five (55%) percent" in its stead.  Section 2.2(d) shall be and is 
hereby amended by deleting the figure of "$10,000,000" and 
inserting "$5,000,000" in its stead.

     4.     Appraisals.  Section 7.3(d) of the Loan Agreement 
shall be and is hereby amended by deleting the words "once in any 
calendar year" and inserting the words "twice in any calendar 
year" in their stead.  

     5.     SOHO Inventory.  Borrower's inventory consisting of 
cordless telephones, voice recorders, headsets, teleassistants 
and telecopy machines and similar small office/home office types 
of goods and components thereof ("SOHO Inventory") shall not be 
deemed to be Eligible Inventory, except in Lender's sole 
discretion, but nevertheless shall be part of the Collateral; 
provided, however, SOHO Inventory shall not be deemed to include 
Inventory consisting of headset and multi-handset phone systems 
and, except in Lenders' sole discretion, the aggregate 
outstanding Loans available to Borrower in respect of such 
Inventory shall not exceed $600,000.

     6.     Waiver and Amendment Fee.  In consideration of the 
foregoing and Lender's agreements hereunder, Borrower shall pay 
to Lender a waiver and amendment fee in the amount of $25,000, 
which shall be fully earned and due and payable on the date 
hereof, and which may be charged by Lender to Borrower's Loan 
account with Lender.

     7.     Representations, Warranties and Covenants.  In 
addition to the continuing representations, warranties and covenants 
heretofore or hereafter made by Borrower to Lender pursuant to 
the Financing Agreements, Borrower hereby represents, warrants 
and covenants with and to Lender as follows (which 
representations, warranties and covenants are continuing and 
shall survive the execution and delivery hereof and shall be 
incorporated into and made a part of the Financing Agreements):

          (a)     No Event of Default exists or has occurred and 
is continuing on the date hereof, after giving effect to the terms 
of this Waiver and Amendment.

          (b)     This Waiver and Amendment has been duly executed 
and delivered by Borrower and is in full force and effect as of 
the date hereof, and the agreements and obligations of Borrower 
contained herein constitute the legal, valid and binding 
obligations of Borrower enforceable against Borrower in 
accordance with their terms.

     8.     Effect of this Waiver and Amendment.  This Waiver and 
Amendment shall be effective upon execution by Lender and 
Borrower and contains the entire agreement of the parties with 
respect to the subject matter hereof and supersedes all 
correspondence, memoranda, communications, discussions and 
negotiations with respect thereto.  No existing defaults or 
Events of Default and no rights or remedies of Lender have been 
or are being waived hereby and no changes or modifications to the 
Financing Agreements have been or are being made or are intended 
hereby, except as expressly set forth herein, and in all other 
respects the Financing Agreements are hereby specifically 
ratified, restated and confirmed by all parties hereto as of the 
date hereof.  In the event that any term or provision of this 
Waiver and Amendment conflicts with any term or provision of the 
Financing Agreements, the term or provision of this Waiver and 
Amendment shall control.

     9.     Counterparts.  This Waiver and Amendment may be 
executed and delivered in counterparts.

                                          Very truly yours,

                                          CONGRESS FINANCIAL CORPORATION

                                          By: /s/ Keith Holler
                                          Title: Asst. Vice President

AGREED AND ACCEPTED:

SMITH CORONA CORPORATION

By: /s/ Martin D. Wilson 
Title: Sr. Vice President
       Chief Financial Officer