Document:

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                                                                   EXHIBIT 10.20

                                    PSC Inc.
                       2000 Employee Stock Purchase Plan

Section 1.  Purpose.

     The PSC Inc. 2000 Employee Stock Purchase Plan (the "Plan") is designed to
provide an opportunity for the employees of PSC Inc. and its subsidiaries
(hereinafter referred to, unless the context otherwise requires, as the
"Company") to purchase Common Shares (the "Stock") of the Company through
voluntary systematic payroll deductions.  It is the purpose and policy of the
Plan to provide employees with an opportunity to acquire a proprietary interest
in the economic progress of the Company and thereby to have an additional
incentive to promote its best interests.  It is the intention of the Company to
have the Plan qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code").  The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that Section of
the Code.

Section 2.  Certain Definitions.

     (a) "Compensation" means the base salary or wage paid to an Employee,
including commissions and overtime payments.  "Compensation" shall not include
bonuses, profit sharing contributions, Company contributions to Social Security,
contributions to the Company's 401(k) Profit Sharing Plan or any other
retirement plan or program, or the value of any other fringe benefits provided
at the expense of the Company.

     (b) "Employee" means any person, including an officer, who is employed by
(i) the Company or (ii) any subsidiary company, 50% or more of whose voting
shares are owned directly or indirectly by the Company.  A director of the
Company who is not also a full time officer is not deemed to be an employee.

     (c) "Fair Market Value" means the value of one share of Stock on the
relevant date, determined as follows:

          (i) If the shares are traded on an exchange (including The Nasdaq
Stock Market(R)), the reported "closing price" on the relevant date (e.g., the
Offering Commencement Date or Offering Termination Date) assuming it is a
trading day; otherwise on the next trading day.

          (ii) If the shares are traded over-the-counter with no reported
closing price, the mean between the lowest bid and the highest asked prices on
said system on the relevant date assuming it is a trading day; otherwise on the
next trading day; and

          (iii) If neither (i) nor (ii) applies, the fair market value as
determined by the Committee in good faith. Such determination shall be
conclusive and binding on all persons.
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Section 3.  Eligibility.

     (a) Initial Eligibility. Except as provided in Section 3(b) of the Plan,
each individual who is an Employee on an Offering Commencement Date shall be
eligible to participate in the Plan.

     (b) Restrictions on Participation. Notwithstanding any provisions of the
Plan to the contrary, no Employee shall be eligible to participate in the Plan
or be granted an option to purchase Stock in the Plan if:

          (i) Immediately after the grant, such Employee would own, or be
considered to own, 5% or more of the total combined voting power or value of all
classes of stock of the Company (for purposes of this paragraph, the rules of
Section 424(d) of the Code shall apply in determining stock ownership of any
Employee, and stock that the Employee may purchase under outstanding options
shall be treated as stock owned by the Employee); or

          (ii) Such option would permit such Employee's rights to purchase stock
under all employee stock purchase plans of the Company which meet the
requirements of Section 423(b) of the Code to accrue at a rate which exceeds
$25,000 in fair market value (as determined pursuant to Section 423(b)(8) of the
Code) for each calendar year in which such option is outstanding.

Section 4.  Offerings under the Plan.

     The Plan will be implemented by ten semi-annual offerings of the Company's
Stock (the "Offerings") beginning on January 1 and July 1 in each of the years
2001, 2002, 2003, 2004 and 2005 and terminating on June 30 and December 31 in
each of such years, respectively. As used in the Plan, "Offering Commencement
Date" means the January 1 or July 1, as the case may be, on which the particular
Offering begins and "Offering Termination Date" means the June 30 or December
31, as the case may be, on which the particular Offering terminates.

     Participation in any Offering under the Plan shall neither limit, nor
require, participation in any other Offering except that no Employee may have
more than one authorization for payroll deduction in effect simultaneously.
Except as provided in Section 3 of the Plan, all Employees participating in an
Offering shall have the same rights and privileges to purchase Stock in the
Plan.

Section 5.  Participation and Payroll Deductions.

     (a) Payment for Stock. Shares of Stock purchased under the Plan will be
paid for by payroll deductions during the period beginning on the Offering
Commencement Date and ending on the Offering Termination Date ("Purchase
Period").
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                                       3

     (b) Participation.

          (i)  An Employee who meets the eligibility requirements of Section
3(a) of the Plan and whose participation is not restricted under Section 3(b) of
the Plan shall become a participant ("Participant") in the Plan by completing an
authorization for a payroll deduction on the form provided by the Company
("Employee Authorization Card") and filing it with the Human Resources
Department of the Company during the enrollment period ("Enrollment Period")
prior to an Offering Commencement Date.  Upon becoming a Participant, the
Employee shall be bound by the terms of this Plan, including any amendments
hereto.

          (ii)  The Enrollment Period for each of the Offerings is the thirty
(30) days prior to each Offering Commencement Date or such other period of time
as may be prescribed by the Committee.

          (iii)   An Employee Authorization Card shall become effective on the
Offering Commencement Date of the first applicable Offering and shall remain in
effect for all subsequent Offerings so long as the Employee remains eligible
under the Plan and has not withdrawn from the Plan as set forth in Section 8.

     (c) Payroll Deductions.

          (i)  At the time an Employee files an Employee Authorization Card, the
Employee shall elect to have deductions made from his or her pay on each payday
during the time the Employee is a Participant in an Offering at the rate of 2,
3, 4, 5, 6, 7, 8, 9 or 10% of the Compensation which the Employee is entitled to
receive on such payday ("Payroll Deduction Rate").

          (ii)  Payroll deductions for a Participant shall begin as of the first
pay period after an Employee Authorization Card has become effective.

          (iii)   All payroll deductions made for a Participant shall be
credited to the Participant's account under the Plan.  Amounts credited to such
accounts may be used by the Company for any corporate purpose.  A Participant
may not make any separate cash payment into such account.

     (d) Changes in Payroll Deduction Rate; Discontinuance of Payroll
Deductions.

          (i)  A Participant may discontinue his or her participation in the
Plan as provided in Section 8(a) of the Plan, but no other change can be made
during an Offering, including, but not limited to, changes in the Payroll
Deduction Rate for such Offering.  A Participant may change the Payroll
Deduction Rate for subsequent Offerings by giving written notice of such change
to the Company during the Enrollment Period immediately preceding the Offering
Commencement Date for the Offering for which such change is effective.
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                                       4

          (ii)  At any time during an Offering, a Participant may discontinue
his or her participation in the Plan by notifying the Company that the
Participant wishes to discontinue his or her payroll deductions.  This notice
shall be in writing and on such forms as provided by the Company and shall
become effective as of a date not more than thirty (30) days following its
receipt by the Company.

     (e) No Interest.

          No interest shall be paid or credited to the Participant with respect
to payroll deductions or any amounts held in the Participant's account.

Section 6.  Granting of Options.

     (a) Number of Option Shares. With respect to each Offering, each eligible
Employee who has elected to participate as provided in Section 5(b) above shall
be deemed to have been granted on the Offering Commencement Date an option to
purchase the number of full shares of Stock which may be purchased with the
payroll deductions accumulated in an account maintained on behalf of each
Participant during each Purchase Period at the option price specified in Section
6(b) below, subject to the limitations contained in Section 3(b) above.

     (b) Option Price. The option price under each option shall be the lower of:

               (i)  85% of the Fair Market Value of the Stock on the Offering
Commencement Date; or

               (ii)  85% of the Fair Market Value of the Stock on the Offering
Termination Date.

Section 7.  Exercise of Options.

     (a) Automatic Exercise. Unless a Participant gives written notice to the
Company as provided in Section 8(a) below, the Participant's option for the
purchase of Stock with payroll deductions made during any Offering will be
deemed to have been exercised automatically on the Offering Termination Date
applicable to such Offering.

     (b) Fractional Shares. Fractional shares will not be issued under the Plan
and any accumulated payroll deductions which would have been used to purchase
fractional shares will be credited to the Participant's account for the next
succeeding Offering, or, at the Participant's election, returned to the
Participant as soon as practicable following the Offering Termination Date,
without interest.

     (c) Transferability of Option. No option granted to a Participant pursuant
to the Plan shall be transferable other than by will or by the laws of descent
and distribution, and no such option shall be exercisable during the
Participant's lifetime other than by the Participant.
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                                       5

     (d) Delivery of Shares. The Company shall deliver to the Participant
certificates for shares of Stock acquired on the exercise of options during an
Offering as soon as practicable following the Offering Termination Date of such
Offering or, at the Participant's request, the Company shall deposit such shares
directly with a broker designated by the Participant. The Company may utilize
electronic or automated methods of share transfer. The Company may require that
shares be retained for a designated period of time and/or may establish other
procedures to permit tracking of disqualifying dispositions of such shares or to
restrict transfer of such shares.

Section 8.  Withdrawals.

     (a) Withdrawal of Account. A Participant may elect to withdraw payroll
deductions credited to the Participant's account under the Plan at any time
before the Offering Termination Date of any Offering by giving written notice to
the Company. All of the Participant's payroll deductions credited to the
Participant's account will be paid to the Participant promptly after receipt of
the notice of withdrawal, and no further payroll deductions will be made from
the Participant's pay during such Offering.

     (b) Effect on Subsequent Participation. A Participant's withdrawal from any
Offering will not have any effect upon the Participant's eligibility to
participate in any succeeding Offering or in any similar plan which may
hereafter be adopted by the Company.

     (c) Termination of Employment. Upon termination of the Participant's
employment for any reason, including retirement (but excluding death while in
the employ of the Company), the payroll deductions credited to the Participant's
account will be returned to the Participant or, in the case of the Participant's
death subsequent to the termination of the Participant's employment, to the
person or persons entitled thereunder under Section 11(a).

     (d) Termination of Employment Due to Death. Upon termination of the
Participant's employment because of the Participant's death, the Participant's
beneficiary (as defined in Section 11) shall have the right to elect, by written
notice given to the Company prior to the earlier of the Offering Termination
Date or the expiration of a period of sixty (60) days commencing with the date
of the death of the Participant, either:

          (i)  to withdraw all of the payroll deductions credited to the
Participant's account under the Plan, or

          (ii) to exercise the Participant's option for the purchase of Stock on
the Offering Termination Date next following the date of the Participant's death
for the purchase of the number of full shares of Stock which the accumulated
payroll deductions in the Participant's account at the date of the Participant's
death will purchase at the applicable option price, and any excess in such
account will be returned to said beneficiary, without interest.
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                                       6

          In the event that no such written notice of election shall be duly
received by the Company, the beneficiary shall automatically be deemed to have
elected, pursuant to paragraph (ii), to exercise the Participant's option.
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                                       7

Section 9.  Stock.

     (a) Maximum Number of Shares. The maximum number of shares which shall be
issued under the Plan, subject to adjustment upon changes in capitalization of
the Company as provided in Section 11(d), shall be 600,000 shares. If the total
number of shares for which options are exercised on any Offering Termination
Date in accordance with Section 6 exceeds the number of shares then available
under the Plan, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in as nearly a uniform manner as shall
be practicable and as it shall determine to be equitable, and the balance of
payroll deductions credited to the account of each Participant under the Plan
shall be returned to the Participant as promptly as possible.

     (b) Participant's Interest in Option Stock. The Participant will have no
interest in Stock covered by the Participant's option until such option has been
exercised.

     (c) Registration of Stock. Stock to be delivered to a Participant under the
Plan will be registered in the name of the Participant, or, if the Participant
so directs by written notice to the Company prior to the Offering Termination
Date applicable thereto, in the names of the Participant and one such other
person as may be designated by the Participant, as joint tenants with rights of
survivorship or as tenants by the entireties, to the extent permitted by
applicable law.

     (d) Restrictions on Exercise. The Committee may, in its discretion, require
as conditions to the exercise of any option that the shares of Stock reserved
for issuance upon the exercise of the option shall have been duly listed, upon
official notice of issuance, upon a stock exchange, and that either:

          (i)  a Registration Statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or

          (ii)  the Participant shall have represented at the time of purchase,
in form and substance satisfactory to the Company, that it is the Participant's
intention to purchase the shares for investment and not for resale or
distribution.

Section 10.  Administration.

     (a) Committee. The Compensation Committee (the "Committee") of the Board of
Directors shall administer the Plan. The Committee shall consist of no fewer
than three members of the Board of Directors. No member of the Committee shall
be eligible to purchase Stock under the Plan.

     (b) Authority of Committee. Subject to the express provisions of the Plan,
the Committee shall have plenary authority in its discretion to interpret and
construe any and all provisions of the Plan, to adopt rules and regulations for
administering the Plan, and to make all
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                                       8

other determinations deemed necessary or advisable for administering the Plan.
The Committee may delegate to one or more individuals the day-to-day
administration of the Plan. Decisions of the Committee shall be conclusive and
binding upon all persons in interest.

     (c) Rules Governing the Administration of the Committee. The Board of
Directors may from time to time appoint members of the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee. The Committee may select one of its members as
its Chairman and shall hold its meetings at such times and places as it shall
deem advisable and may hold telephonic meetings. A majority of its members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan, in the manner and to the extent it
shall deem desirable. Any decision or determination reduced to writing and
signed by a majority of the members of the Committee shall be as fully effective
as if it had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary and shall make such rules and regulations for
the conduct of its business as it shall deem advisable.

     (d) Indemnification of Committee. In addition to such other rights of
indemnification as they may have as directors or as members of the Committee,
under the Company's Certificate of Incorporation, Bylaws, or pursuant to law or
contract, the members of the Committee shall be indemnified by the Company
against reasonable expenses, including attorneys' fees actually and necessarily
incurred in connection with any action or appeal therein, to which they or any
of them may be party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding except in
relation to matters as to which it shall be adjudged in such action, suit,
proceeding that such Committee member is liable for misconduct in the
performance of his duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding a Committee member shall in
writing offer the Company the opportunity, at its own expense, to handle and
defend the same.

Section 11.  Miscellaneous.

     (a) Designation of Beneficiary. A Participant may file a written
designation of a beneficiary who is to receive any shares and cash to the
Participant's credit under the Plan in the event of such Participant's death
prior to delivery to the Participant of such shares and cash. Such designation
of beneficiary may be changed by the Participant at any time by written notice
to the Company. Upon the death of a Participant and upon receipt by the Company
of proof of the identity and existence at the Participant's death of a
beneficiary validly designated by the Participant under the Plan, the Company
shall deliver such shares and cash to such beneficiary. In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Participant's death, the
Company shall deliver such shares and cash to the executor or administrator of
the estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company) the Company,
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                                       9

in its discretion, may deliver such shares and cash to the spouse or to any one
or more dependents or relatives of the Participant or if no spouse, dependent,
or relative is known to the Company then to such other person as the Company may
designate. No designated beneficiary shall prior to the death of the Participant
by whom the beneficiary has been designated, acquire any interest in the shares
or cash credited to the Participant under the Plan.

     (b) Transferability. Neither payroll deductions credited to a Participant's
account nor any rights with regard to the exercise of an option or to receive
Stock under the Plan may be assigned, transferred, pledged, or otherwise
encumbered or disposed of in any way by the Participant other than by will or
the laws of descent and distribution. Any such attempted assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds in accordance with Section 8(a).

     (c) Use of Funds. All payroll deductions received or held by the Company
under this Plan may be used by the Company for any corporate purpose and the
Company shall not be obligated to segregate such payroll deductions.

     (d) Recapitalization. If, while any options are outstanding, the
outstanding shares of Stock of the Company have increased, decreased, changed
into, or been exchanged for a different number or kind of shares or securities
of the Company through reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Committee in the
number and/or kind of shares which are subject to purchase under outstanding
options and on the option exercise price or prices applicable to such
outstanding options. In addition, in any such event, the number and/or kind of
shares which may be offered in the Offerings described in Section 4 hereof shall
also be proportionately adjusted.

     (e) Merger, Liquidation, Other Corporate Transactions.

          (i) In the event of the proposed liquidation or dissolution of the
Company, the Offering then in progress will terminate immediately prior to the
consummation of such proposed liquidation or dissolution, unless otherwise
provided by the Board in its sole discretion, and all outstanding options shall
automatically terminate and the amounts of all payroll deductions will be
refunded without interest to the Participants.

          (ii) In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger or consolidation of the Company with or
into another corporation, then in the sole discretion of the Board, (1) each
option shall be assumed or an equivalent option shall be substituted by the
successor corporation or parent or subsidiary of such successor corporation, or
(2) a date established by the Board on or before the date of consummation of
such merger, consolidation or sale shall be treated as an Exercise Date, and all
outstanding options shall be deemed exercisable on such date, or (3) all
outstanding options shall terminate and the accumulated payroll deductions shall
be returned to the Participants, without interest.
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                                       10

     (f) Amendment and Termination. The Board of Directors shall have complete
power and authority to terminate or amend the Plan; provided, however, that the
Board of Directors shall not, without the approval of the shareholders of the
Company (i) increase the maximum number of shares which may be issued under the
Plan, (ii) amend the requirements as to the class of employees eligible to
purchase Stock under the Plan or permit the members of the Committee to purchase
Stock under the Plan. No termination, modification or amendment of the Plan may,
without the consent of an Employee then having an option under the Plan to
purchase Stock, adversely affect the rights of such Employee under such option.

     (g) No Rights as a Shareholder. No right as a shareholder shall exist with
respect to any shares of Stock covered by options until the shares subject to
the option have been purchased and delivered as provided in Section 7(d). No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such shares have been purchased and delivered.

     (h) No Employment Rights. The Plan does not, directly or indirectly, create
any right for the benefit of any Employee or class of employees to purchase any
shares under the Plan, or create in any Employee or class of employees any right
with respect to continuation of employment by the Company, and it shall not be
deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an Employee's employment at any time.

     (i) Effective Date. The Plan shall become effective as of January 1, 2001,
subject to approval by the shareholders of the Company within twelve (12) months
after its adoption by the Board of Directors. If the Plan is not approved, the
Plan shall not become effective.

     (j) Termination Date. This Plan shall terminate, and no further shares of
Stock shall be sold or issued hereunder, on December 31, 2005, or such earlier
date as may be determined by the Board of Directors or Committee. The
termination of this Plan, however, shall not affect any restrictions previously
imposed on the shares issued pursuant to this Plan or rights of the Company
granted pursuant to this Plan.

     (k) Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of each
Employee participating in the Plan, including, without limitation, such
Employee's estate and the executors, administrator or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such Employee.

     (l) Governing Law. The law of the State of New York will govern all matters
relating to this Plan except to the extent it is superseded by the laws of the
United States.

Date Plan adopted by Board of Directors:  October 23, 2000
Date Plan approved by Shareholders:<PAGE>

                                                                   EXHIBIT 10.37

                 AMENDED AND RESTATED TENTH AMENDMENT AND WAIVER

     AMENDED AND RESTATED TENTH AMENDMENT AND WAIVER dated as of December 29,
2000 (this "Amended and Restated Tenth Amendment") with respect to the Credit
Agreement dated as of July 12, 1996, as amended by the First Amendment to Credit
Agreement dated as of September 27, 1996, Amendment Two and Waiver to Credit
Agreement dated as of July 4, 1997, Amendment Three to Credit Agreement (With
Consent) dated as of August 13, 1997, Amendment Four to Credit Agreement dated
as of April 8, 1998, Amendment Five and Consent and Waiver to Credit Agreement
dated as of March 1, 1999, Amendment Six dated as of May 1, 1999, Amendment
Seven and Consent and Waiver to Credit Agreement dated as of October 13, 1999,
Amendment Eight and Consent and Waiver to Credit Agreement dated as of January
19, 2000, and Amendment Nine and Consent and Waiver to Credit Agreement dated as
of March 31, 2000 (the "Credit Agreement"), among PSC Scanning, Inc., formerly
known as SpectraScan, Inc. which was the successor by merger to PSC Acquisition,
Inc. (the "Borrower"), PSC Inc. ("PSC"), the lenders party thereto (the
"Lenders") and Fleet National Bank, as administrative agent (the "Administrative
Agent").

                              W I T N E S S E T H :

     WHEREAS, pursuant to the Credit Agreement, the Lenders have made Advances
and other extensions of credit to the Borrower which remain outstanding;

     WHEREAS, certain Events of Default have occurred and are continuing;

     WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders, and the Administrative Agent and the Lenders are willing to, waive
certain Events of Default and defer during the Waiver Period (as defined below)
the payment of the Deferred Amounts (as defined below), but only on the terms
and conditions set forth herein;

     WHEREAS, the Borrower, PSC, the Lenders and the Administrative Agent are
parties to the Tenth Amendment and Waiver dated as of December 29, 2000 (the
"Tenth Amendment") and the Tenth Amendment became effective on December 29,
2000; and

     WHEREAS, the Borrower and PSC have requested that the Administrative Agent
and the Lenders, and the Administrative Agent and the Lenders are willing to,
amend and restate the Tenth Amendment in its entirety as set forth in this
Amended and Restated Tenth Amendment.

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
<PAGE>

                                   ARTICLE I

                                   DEFINITIONS

     Section 1.1 Defined Terms. Unless otherwise defined herein, capitalized
terms used herein have the meanings assigned in the Credit Agreement and the
other Loan Documents, and the following terms shall have the following meanings:

          "Deferred Amounts": (a) $2,500,000 principal payment due on December
     31, 2000 with respect to the Term Loan Advances (provided, that $833,333.33
     of such amount shall be payable on December 31, 2000 as set forth in
     Section 5.1(b)) and (b) the spread between (i) the contractual rate of
     interest due on the Advances pursuant to Section 2.07(a) of the Credit
     Agreement and (ii) the default rate of interest due on the Advances
     accruing upon the occurrence and during the continuance of a Default
     pursuant to Section 2.07(b) of the Credit Agreement.

          "Expiration Date": March 31, 2001.

          "Effective Date": the first date on which the conditions precedent
     specified in Article VI of this Amended and Restated Tenth Amendment shall
     have been satisfied or the satisfaction thereof shall have been waived in
     accordance with the terms hereof.

          "F/X Commitment": as defined in Section 5.1(d).

          "F/X Lender" means Key Bank or such other Lender that agrees to be the
     F/X Lender.

          "Waiver Period": the period beginning on the Effective Date and ending
     on the earlier of (a) the Termination Date or (b) the Expiration Date.

          "Specified Events of Default": Events of Default arising or which may
     arise in respect of (i) Section 6.01(c) as a result of the Borrower's
     failure to satisfy covenants contained in Sections 5.04(a), (b), (c), (d),
     and (e) of the Credit Agreement and (ii) 6.01(e) of the Credit Agreement in
     connection with the Borrower's failure to make certain payments to
     Spectra-Physics, Inc. pursuant to the terms of the Subordinated Installment
     Promissory Note dated July 12, 1996.

          "Termination Date": the date on which there is an event of termination
     as provided in Article III of this Amended and Restated Tenth Amendment.
<PAGE>

                                   ARTICLE II

                             LIMITATION ON REMEDIES

     Section 2.1. Waiver. Subject to the terms and conditions hereof, the
Administrative Agent and the Lenders hereby agree to waive during the Waiver
Period the Specified Events of Default.

     Section 2.2. Deferral. The Administrative Agent and the Lenders hereby
agree to defer payment by the Borrower of the Deferred Amounts during the Waiver
Period; provided, that the Deferred Amounts shall be paid in full in cash
immediately upon the earlier of the Termination Date or the Expiration Date; it
being understood that during the Waiver Period the Borrower shall continue to
pay the contractual rate of interest due on the Advances pursuant to Section
2.07(a) of the Credit Agreement.

                                   ARTICLE III

                          WAIVER EVENTS OF TERMINATION

               Upon the occurrence of any of the following events:

          (a) the Borrower or any other Loan Party shall default in the
     observance or performance of any agreement or covenant contained in this
     Amended and Restated Tenth Amendment;

          (b) the occurrence of a Default or Event of Default (other than the
     Specified Events of Default); or

          (c) the exercise of any rights or remedies by the holders of
     Subordinated Debt, including without limitation, the acceleration of any
     amounts due or to become due under the Subordinated Debt Documents;

then, and in any such event, the provisions of Article II of this Amended and
Restated Tenth Amendment shall immediately and automatically terminate and
thereafter such Article shall have no force or effect.

                                   ARTICLE IV

                         AMENDMENTS TO CREDIT AGREEMENT

     Section 4.1. Amendments to Section 1.1 (Definitions). (a) Section 1.1 of
the Credit Agreement is hereby amended by (i) deleting the definitions of
Eligible Assignee and Fixed Charge Coverage Ratio, and (ii) inserting the
following definitions in their proper alphabetical order:

          "Eligible Assignee" means (a) with respect to any Facility (other than
     the Letter of Credit Facility), (i) a Lender; (ii) an Affiliate of a
     Lender; (iii) a commercial bank organized under the laws of the United
     States, or any State thereof, and having total assets in excess of
     $500,000,000; (iv) a savings and loan association or savings bank organized
     under the laws of the United States, or any State thereof, and having total
     assets in excess of $500,000,000; (v) a commercial bank organized under the
     laws of any other country that is a member of the OECD or has concluded
     special lending arrangements with the International Monetary Fund
     associated with its General Arrangements to Borrow or of the Cayman
     Islands, or a political
<PAGE>

     subdivision of such country, and having total assets in excess of
     $500,000,000, so long as such bank is acting through a branch or agency
     located in the United States; (vi) the central bank of any country that is
     a member of the OECD; (vii) a finance company, insurance company or other
     financial institution or fund (whether a corporation, partnership trust or
     other entity) that is engaged in making, purchasing or otherwise investing
     in commercial loans in the ordinary course of its business and having total
     assets in excess of $500,000,000; and (viii) any other Person approved by
     the Administrative Agent or any Person authorized by the Administrative
     Agent to grant such approval, such approval not to be unreasonably withheld
     or delayed, and (b) with respect to the Letter of Credit Facility, a Person
     that is an Eligible Assignee under subclause (iii) or (v) of clause (a) of
     this definition and is approved by the Administrative Agent or any Person
     authorized by the Administrative Agent to grant such approval, such
     approval not to be unreasonably withheld or delayed; provided, however,
     that neither any Loan Party nor any Affiliate of a Loan Party shall qualify
     as an Eligible Assignee under this definition.

          "Eligible Inventory" means inventory, calculated on a "first-in,
     first-out" basis, less work-in process, cartons, labels, obsolescence
     reserves and any other reserves deemed necessary by the Administrative
     Agent in its sole discretion.

          "Eligible Receivable Aging Report" means the detailed report
     identifying as of the last Business Day of each week the Borrower's
     Domestic and Foreign Accounts Receivable, in form and substance
     satisfactory to the Administrative Agent, and which shall be duly certified
     by the Borrower's Chief Executive Officer, Chief Financial Officer or
     Controller.

          "Eligible Receivables" means Receivables (a) with respect to domestic
     shipments (i) on or before February 28, 2001, within 90 days of the due
     date and (ii) on or after March 1, 2001, within the earlier of (A) 90 days
     of the invoice date or (B) 60 days of the due date, and (b) with respect to
     international shipments within 150 days of the due date, in each case, and
     as otherwise acceptable to the Administrative Agent in its sole discretion.

          "Eligible Inventory Report" means the detailed report identifying as
     of the last Business Day of each month the Borrower's Eligible Inventory,
     in form and substance satisfactory to the Administrative Agent, and which
     shall be duly certified by the Borrower's Chief Executive Officer, Chief
     Financial Officer or Controller.

          "Amended and Restated Tenth Amendment" means the Amended and Restated
     Tenth Amendment and Waiver dated as of December 29, 2000 with respect to
     the Credit Agreement.

     Section 4.2 Amendments to Section 2.01 (The Advances). (a) Section 2.01(c)
of the Credit Agreement is hereby amended by inserting the following sentence
immediately prior to the period at the end of said section:
<PAGE>

     "Notwithstanding anything to the contrary set forth herein, each Working
     Capital Advance shall be made as a Prime Rate Advance.".

     (b) Section 2.01(d) of the Credit Agreement is hereby amended by deleting
the reference to "$5,000,000" and inserting in lieu thereof a reference to
"$2,000,000".

Section 4.3. Amendment to Section 2.06 (Prepayments). Section 2.06(b) of the
Credit Agreement is hereby amended by inserting immediately before the period at
the end of said Section the following: "provided, further, that Net Cash
Proceeds received pursuant to clause (ii) above shall be applied first to the
Working Capital Facility as set forth in clause (vi) below and shall permanently
reduce the aggregate Working Capital Commitments on a pro rata basis, and
second, the balance, if any, ratably to the Term Loan Facility and to the
installments thereof in inverse order of maturity".

     Section 4.4. Amendment to Section 2.07 (Interest). Section 2.07 of the
Credit Agreement is hereby amended by inserting a new paragraph (d) as follows:

     "(d) Waiver Period Interest. Notwithstanding the foregoing, the Borrower
     shall pay interest on the unpaid principal amount of each Advance (i)
     during the period beginning on the Effect- ive Date (as defined in the
     Amended and Restated Tenth Amend- ment) through and including December 31,
     2000, at the Prime Rate plus 1.50% and (ii) during the period beginning on
     Janu- ary 1, 2001 through and including March 31, 2001, at the Prime Rate
     plus 2.00%. The Borrower shall pay interest on a monthly basis in arrears."

     Section 4.5. Amendments to Section 5.03 (Reporting Require- ments). (a)
Section 5.03(b) of the Credit Agreement is hereby amended by delet- ing Section
5.03(b) in its entirety and inserting in lieu thereof the following:

     "As soon as available and in any event within thirty (30) days after the
     end of each month, the Borrower shall submit for itself, PSC and all of
     their Subsidiaries, a Consolidated statement of income and a Consolidated
     statement of cash flows, for (i) each month, beginning on the first day of
     each month and ending on the last day of such month, and (ii) the period
     commencing on the first day of the then-current Fiscal Year and ending with
     the last day of the most recent month, in each case, duly certified by the
     Borrower's Chief Executive Officer, Chief Financial Officer or Controller";

     (b) Section 5.03 of the Credit Agreement is hereby amended by inserting in
said Section a new paragraph (w) as follows:

     "(w) The Borrower shall submit to the Administrative Agent within fifteen
     (15) days after the end of each month, an Inventory Report for the
     immediately preceding month.";

     (c) Section 5.03 of the Credit Agreement is hereby amended by inserting in
said Section a new paragraph (x) as follows:
<PAGE>

     "(x) The Borrower shall submit to the Administrative Agent on Tuesday of
     each week, an Accounts Receivable Aging Report for the immediately
     preceding week; provided, that amounts with respect to PSC Japan K.K., PSC
     Asia Pacific Pty, Limited and PSC SRL shall be reported on a monthly
     basis."

     Section 4.6. Amendment to Article V. Article V of the Credit Agreement is
hereby amended by inserting a new Section 5.05 as follows:

     "Section 5.05. Collateral Covenants. So long as any Advance shall remain
     unpaid, any Letter of Credit shall be outstanding or any Lender Party shall
     have any Commitment hereunder, PSC will:

          (a) Minimum Eligible Accounts Receivable. Maintain (i) at all times,
     Eligible Receivables having a value equal to at least $28,000,000 and (ii)
     as at the end of each month, Eligible Receivables having a value equal to
     at least $30,000,000; provided, however, if on any date of determination
     Eligible Receivables are less than the amounts set forth above, (x) the
     Borrower shall, within one Business Day of the Administrative Agent's
     receipt of an Eligible Receivable Aging Report, permanently reduce the
     Working Capital Commitments by an amount equal to such shortfall and (y)
     the amounts set forth above shall be deemed to be reduced by an equal
     amount.

     (b) Minimum Eligible Inventory. Maintain at all times, Eligible Inventory
     having a value equal to at least $11,000,000; provided, however, if on any
     date of determination Eligible Inventory is less than the amount set forth
     above, (x) the Borrower shall, within one Business Day of the
     Administrative Agent's receipt of an Eligible Inventory Report, permanently
     reduce the Working Capital Commitments by an amount equal to such shortfall
     and (y) the amount set forth above shall be deemed to be reduced by an
     equal amount.".

     Section 4.7. Amendment to Schedule 1 (Commitments and Applicable Lending
Offices). Schedule 1 to the Credit Agreement is hereby amended by deleting said
Schedule in its entirety and inserting in lieu thereof the Schedule 1 attached
hereto as Exhibit A. Schedule 1, as amended hereby, shall show Working Capital
Commitments in the aggregate amount of $45,000,000 and Term Loan Commitments in
the aggregate amount of $67,500,000.
<PAGE>

                                    ARTICLE V
                      OVERRIDE AGREEMENTS OF THE BORROWERS

     Section 5.1 Override Agreements. (a) Continued Availability.
Notwithstanding anything to the contrary in the Credit Agreement, during the
Waiver Period the Borrower shall be permitted (i) to borrow, prepay, in whole or
in part, and reborrow, in accordance with the terms and conditions hereof (A)
Working Capital Advances and (B) Swing Line Advances, which, in each case, shall
be Prime Rate Advances, (ii) to enter into Hedge Agreements pursuant to Section
5.1(d) of this Amendment, and (iii) to open Letters of Credit; provided,
however, notwithstanding anything to the contrary in the Credit Agreement,
during the Waiver Period the Borrower shall not be permitted to borrow in excess
of $40,000,000 (which amount shall include the aggregate amount of the F/X
Commitment) without the prior consent of the Administrative Agent and the
Lenders.

     (b) Principal Payment. Notwithstanding anything to the contrary set forth
in the Credit Agreement, the Borrower shall pay the principal amount of
$833,333.33 on December 31, 2000 with respect to the Term Loan Advances. The
Administrative Agent and the Lenders acknowledge that this amount has been paid
prior to the execution of this Amended and Restated Tenth Amendment.

     (c) Financial Covenants. (i) Minimum Consolidated EBITDA. During the Waiver
Period, the Borrower shall not permit consolidated EBITDA for the periods set
forth below, measured on a cumulative basis, to be less than the amounts set
forth opposite such period:

            Period                                  Amount
            ------                                  ------
  October 1 - October 31, 2000                   $   100,000
  October 1 - November 30, 2000                  $   500,000
  January 1 - January 31, 2001                   $(1,500,000)
  January 1 - February 28, 2001                  $(1,000,000)

For purposes of this Amended and Restated Tenth Amendment, during the fourth
quarter of the year 2000, inventory write-offs and asset write-downs aggregating
Ten Million Dollars ($10,000,000) or less will be disregarded in calculating
consolidated EBITDA.

     (ii) Capital Expenditures. During the Waiver Period, the Borrower shall not
make or commit to make Capital Expenditures for the periods set forth below,
measured on a cumulative basis, in excess of the amounts set forth opposite such
period:

   Period                                                    Amount
   ------                                                    ------
  October 1 - October 31, 2000                            $   250,000
  October 1 - November 30, 2000                           $   500,000
  October 1 - December 31, 2000                           $ 1,000,000
<PAGE>

     Following delivery of the Business Plan (as defined below), the
     Administrative Agent shall reasonably determine the appropriate Capital
     Expenditure levels for January, February and March 2001 and shall deliver a
     written schedule of such amounts to the Borrower. The Borrower shall not
     permit Capital Expenditures for such periods, measured on a cumulative
     basis, to be more than the amounts set forth on such schedule.

     (d) F/X Hedging Facility. (i) Notwithstanding anything to the contrary set
forth in the Credit Agreement, the Borrower may maintain during the Waiver
Period Hedge Agreements with the F/X Lender covering a notional amount of
$6,000,000 (the "F/X Commitment"). During the Waiver Period, the Working Capital
Commitment shall be reduced by the amount of the F/X Commitment, which reduction
shall be allocated pro rata among the Working Capital Lenders.

          (ii) The F/X Lender shall furnish to the Administrative Agent on the
     first Business Day of each week a written report summarizing the Borrower's
     swap transactions with the F/X Lender. The payment by the F/X Lender of any
     amount owing by the F/X Lender under any such Hedge Agreements shall
     constitute for all purposes of this Agreement the making by the F/X Lender
     of an Advance, which shall be a Prime Rate Advance, in such amount. If the
     Borrower fails to pay the F/X Lender on account of any Hedge Agreement,
     upon written demand by the F/X Lender, with a copy of such demand to the
     Administrative Agent, each Working Capital Lender shall purchase from the
     F/X Lender, and the F/X Lender shall sell and assign to each such Working
     Capital Lender, such Lender's Pro Rata Share of such outstanding Advance as
     of the date of such purchase, by making available for the account of its
     Applicable Lending Office to the Administrative Agent for the account of
     the F/X Lender, by deposit to the Administrative Agent's Account, in same
     day funds, an amount equal to the portion of the outstanding principal
     amount of such Advance to be purchased by such Lender. Promptly after
     receipt thereof, the Administrative Agent shall transfer such funds to the
     F/X Lender. The Borrower hereby agrees to each such sale and assignment.

     (e) Borrowings. Notwithstanding anything to the contrary set forth in the
Credit Agreement, during the Waiver Period, each Notice of Borrowing shall be
made directly to the attention of Daniel D. Butler (Fleet National Bank, 111
Westminster Street Providence, Rhode Island 02903; Fax: 401-278-6004) and shall
be accompanied by a certificate signed by the Borrower's Chief Executive
Officer, Chief Financial Officer or Controller stating that, as of the date of
the Borrowing, the Borrower is in compliance with the terms of the Credit
Agreement and this Amended and Restated Tenth Amendment.

     (f) Cash Management Services. (i) Promptly following the Effective Date,
the Borrower shall enter into an agreement with the Administrative Agent
providing for the establishment and continual maintenance of a lockbox account
(the "Lock-Box") and a blocked account (the "Blocked Account") for the
collection of all the Borrower's Receivables and other Collateral. In
conjunction therewith, the Borrower shall promptly direct all account debtors
and other obligors to direct all payments owing to the Borrower to the Lock-Box.
All monies on deposit in the Lock-Box shall be promptly transferred to the
Blocked Account. All checks and other payment instruments that constitute
proceeds of Receivables or other Collateral received directly by the Borrower
shall be held in trust and promptly upon receipt, delivered to the Blocked
Account. Amounts in the Blocked Account shall, on a daily basis, be applied to
repayment of the Working Capital Facility and may not be directly withdrawn.

<PAGE>

          (ii) All amounts deposited in or any investments with respect to the
     Lock-Box and the Blocked Account shall at all times be subject to the
     exclusive dominion and control of the Administrative Agent.

          (iii) For purposes of calculating interest on the Working Capital
     Advances, all amounts received in the Blocked Account will be deemed to
     have been applied to the Working Capital Facility on the 2nd Business Day
     after the date of receipt. For purposes of calculating the availability
     under the Working Capital Commitments, all amounts received in the Blocked
     Account (A) before 1:00 p.m. (EST) will be deemed to have been applied to
     the Working Capital Facility on the Business Day after the date of receipt
     and (B) after 1:00 p.m. (EST) will be deemed to have been applied to the
     Working Capital Facility on the 2nd Business Day after the date of receipt.
     In the event there are not sufficient, available funds in the Borrower's
     operating account when debited and/or charged under this paragraph, under
     the Blocked Account or otherwise, the Borrower agrees to immediately pay
     such amounts to the Administrative Agent in immediately available funds.

     (g) Financial Advisor; Investment Banker. The Borrower shall, during the
Waiver Period, continue the retention of (i) Raymond James & Company, or another
investment banker reasonably acceptable to the Administrative Agent and the
Lenders (the "Investment Banker") and (ii) FTI/Policano & Manzo, or another
financial advisor reasonably acceptable to the Administrative Agent and the
Lenders (the "Financial Advisor").

     (h) Business Plan; Cash Flow Forecast; Progress Reports. (i) The Borrower
shall deliver a detailed "bottom-up" business plan for fiscal year 2001 (the
"Business Plan.") to the Administrative Agent and the Lenders on or before
January 15, 2001. The Business Plan shall include, on a monthly basis, for the
twelve month period beginning January 1, 2001, (a) Consolidated forecasts
detailing cash flow and Collateral levels, (b) Consolidated pro forma profit and
loss statements, and (c) Consolidated balance sheets. The Business Plan shall
identify (x) all sources of revenue and expenses, including without limitation,
intended executive compensation, (y) the nature of all proposed Capital
Expenditures, and (z) all human resource actions, including without limitation,
impacts on staffing levels and itemized severance costs. The Business Plan shall
contemplate both a realization of the sale of the real property located at 675
Basket Road, Webster, New York 14580 and a sale of the Borrower's automation
division, as well as a scenario where neither sale occurs prior to January 31,
2001. The Business Plan shall be in form and substance satisfactory to the
Administrative Agent.

          (ii) The Borrower shall deliver a thirteen week rolling cash flow
     forecast (the "Cash Flow Forecast") to the Administrative Agent and the
     Lenders on or before Wednesday of each week. The Cash Flow Forecasts shall
     detail all sources and uses of cash on a weekly basis and shall report any
     variances from the prior week. The Cash Flow Forecasts shall be in form and
     substance satisfactory to the Administrative Agent.
<PAGE>

          (iii) The Borrower shall, on or before the last Friday of each month,
     deliver to the Administrative Agent and the Lenders monthly written
     progress reports with the first report to be delivered on or before January
     5, 2001. The progress reports shall provide updates regarding the
     Borrower's marketing efforts in connection with certain of its divisions
     and real property, including with respect to the valuation of such
     divisions and real property, and shall be in form and substance
     satisfactory to the Administrative Agent.

          (iv) Upon request, the Lenders shall be provided reasonable access to
     the Financial Advisor and the Investment Banker and copies of all
     information provided to either.

     (i) Retention of Advisors by Administrative Agent. In the event the
Administrative Agent or its counsel determines to retain a financial advisor
and/or an investment banker, the Borrower hereby agrees to pay or reimburse the
Administrative Agent for all reasonable fees and out-of-pocket expenses incurred
in connection therewith.

     (j) Perfection. In the event the Lenders determine to perfect their
interests in the Borrower's foreign subsidiaries the Borrower shall assist the
Administrative Agent in perfecting the Lenders' interests in each such company
and shall reimburse the Administrative Agent for all costs and out-of-pocket
expenses incurred in connection therewith.

     (k) Field Examinations. The Borrower agrees that the Administrative Agent,
its counsel or any other professional representing the Administrative Agent, may
conduct independent field examinations of the Borrower's books and records, as
often as the Administrative Agent, in its sole discretion, deems necessary. The
Borrower agrees to fully cooperate with such independent field examinations and
agrees to reimburse the Administrative Agent on demand for the costs associated
with any such independent field examinations.

     (l) Appraisals. The Borrower shall cooperate with the Administrative
Agent's undertaking of updated appraisals of real estate and
machinery/equipment. The Borrower agrees to reimburse the Administrative Agent
on demand for the costs associated with such appraisals.

     (m) Dividends. Notwithstanding anything to the contrary contained in the
Credit Agreement, neither the Borrower nor PSC shall declare or pay any
dividends, purchase, redeem, retire, defease or otherwise acquire for value any
of their capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to their
stockholders as such, make any distribution of assets, capital stock, warrants,
rights, options, obligations or securities to their stockholders as such or
issue or sell any capital stock, or any warrants, rights or options to acquire
such capital stock, or permit any of their Subsidiaries to do any of the
foregoing or permit any of their Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of PSC or the Borrower
or any warrants, rights or options to acquire such capital stock or to issue or
sell any capital stock, or any warrants, rights or options to acquire such
capital stock except with the prior written consent of the Administrative Agent.
<PAGE>

     (n) Dissolution of Certain Subsidiaries; Limitation on Transfer of Assets.
The Borrower and PSC hereby agree that GAP Technologies, Inc. ("GAP") and GEO
Labs, Inc. ("GEO") shall be dissolved on or before February 7, 2001. No assets,
rights or other interests in property of the Borrower, PSC or any of their
subsidiaries shall be transferred to GAP or GEO. No assets, rights or other
interests in property of the Borrower, PSC or any of their domestic subsidiaries
shall be transferred to any of their foreign subsidiaries.

     (o) Costs and Expenses. In furtherance of the provisions of Section 8.04 of
the Credit Agreement, the Borrower and PSC hereby agree that the Administrative
Agent shall be entitled, upon one Business Day's notice to the Borrower, to
debit any operating account of either the Borrower or PSC to collect costs and
expenses to which the Administrative Agent is entitled pursuant to Section 8.04
of the Credit Agreement.

     (p) Acknowledgement. The Administrative Agent and the Lenders acknowledge
that the payment required under Section 4(a) of the Subdebt Waiver (as defined
below) shall not constitute Subordinated Indebtedness (as defined in the
Securities Purchase Agreement) and shall not be subject to disgorgement pursuant
to Section 10 of the Securities Purchase Agreement.

     (q) Consents. The Administrative Agent and the Lenders hereby consent to
the sale of (i) PSC's Webster, New York facility, (ii) PSC's Imaging Product and
Verification Product businesses and (iii) PSC's Automation business
(collectively, the "Non-Core Asset Sales"); provided, that, as to each of the
Non-Core Asset Sales, (A) 50% of the Net Cash Proceeds of each such sale shall
be applied to prepay amounts outstanding under the Term Loan Facility and (B)
50% of the Net Cash Proceeds of each such sale shall be deposited in an
interest-bearing cash collateral account (the "Cash Collateral Account") to be
opened by the Borrower and maintained with the Administrative Agent for the
purpose of depositing the Borrower's 50% share of the Net Cash Proceeds of the
Non-Core Asset Sales and permitting the use of such proceeds by the Borrower in
accordance with the provisions of this subsection; provided, further, that the
Administrative Agent and the Lenders hereby consent to the unfettered and
unlimited access by the Borrower to all funds on deposit in the Cash Collateral
Account notwithstanding anything to the contrary set forth in the Credit
Agreement or any of the Loan Documents, or the occurrence and continuation of
any Defaults or Events of Default under the Credit Agreement or any of the Loan
Documents. The provisions of this Section 5.1(q) shall survive the Expiration
Date or the Termination Date of this Agreement.

     Section 5.2 Override Agreements Deemed Agreements under the Credit
Agreement. For purposes of the Credit Agreement, the agreements of the Borrower
contained in this Article V shall be deemed to be, and shall be, agreements
under the Credit Agreement.

                                   ARTICLE VI
                              CONDITIONS PRECEDENT

     This Amended and Restated Tenth Amendment shall not become effective unless
and until each of the conditions precedent set forth below have been satisfied
or the satisfaction thereof shall have been waived in accordance with the terms
hereof:

     (a) Receipt by the Administrative Agent of counterparts of this Amended and
Restated Tenth Amendment, duly executed and delivered by the Borrower and the
Guarantors;
<PAGE>

     (b) Receipt by the Administrative Agent of a fully executed amendment and
waiver (the "Subdebt Waiver") to the Securities Purchase Agreement dated as of
July 12, 1996, as amended, in form and substance satisfactory to the
Administrative Agent, which shall, among other things, (i) acknowledge that any
obligations of the Borrower incurred in connection with the F/X Facility shall
be deemed Superior Indebtedness (as defined in the Securities Purchase
Agreement) and (ii) irrevocably and unconditionally consent to the Non-Core
Asset Sales.

     (c) Receipt by the Administrative Agent of all documents requested by the
Administrative Agent in respect of Collateral.

     (d) Receipt by the Administrative Agent of payment in full in cash of its
invoiced and unpaid fees and out-of-pocket expenses incurred in connection with
the preparation and execution of this Amended and Restated Tenth Amendment,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.

     (e) Receipt by the Administrative Agent of an Eligible Receivables Aging
Report and Eligible Inventory Report.

     (f) Receipt by the Administrative Agent of those portions of the fees
referred to in Sections 8.2(b) and (c) that are due and owing on the Effective
Date.

                                   ARTICLE VII
                                 INTERPRETATION

     Section 7.1 Continuing Effect of the Credit Agreement. The Borrower, the
Guarantors, the Administrative Agent and the Lenders hereby acknowledge and
agree that the Credit Agreement shall continue to be and shall remain in full
force and effect in accordance with its terms, as amended by this Amended and
Restated Tenth Amendment. Any terms or conditions contained in the Amended and
Restated Tenth Amendment shall control over any inconsistent term(s) or
condition(s) in the Credit Agreement or the other Loan Documents.

     Section 7.2 No Limitation on Remedies after Waiver Period. The Borrower and
the Guarantors hereby acknowledge and agree that, at the end of the Waiver
Period, the provisions of Article II of this Amended and Restated Tenth
Amendment shall become of no force and effect and the Administrative Agent and
the Lenders shall be free, in accordance with the Credit Agreement and the other
Loan Documents, to declare the Advances and all other amounts outstanding under
the Credit Agreement to be due and payable and to exercise and enforce, or to
take steps to exercise and enforce, all other rights, powers, privileges and
remedies available to them under the Credit Agreement, any other Loan Document
or applicable law on account of the Specified Events of Default (or any other
Default or Event of Default) as if this Amended and Restated Tenth Amendment had
not been entered into by the parties hereto.

     Section 7.3 No Waiver; Other Defaults or Events of Default. (a) Nothing
contained in this Amended and Restated Tenth Amendment shall be construed or
interpreted or is intended as a waiver of any rights, powers, privileges or
remedies that the Administrative Agent or the Lenders have or may have under the
Credit Agreement or any other Loan Document on account of the Specified Events
of Default, except as expressly provided herein.

<PAGE>

     (b) Nothing contained in this Amended and Restated Tenth Amendment shall be
construed or interpreted or is intended as a waiver of or limitation on any
rights, powers, privileges or remedies that the Administrative Agent or the
Lenders have or may have under the Credit Agreement or any other Loan Document
on account of any Default or Event of Default other than the Specified Events of
Default.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     Section 8.1 Representations and Warranties. The Borrower and the Guarantors
hereby represent and warrant as of the date hereof that, after giving effect to
this Amended and Restated Tenth Amendment, (a) no Default or Event of Default
has occurred and is continuing, except the Specified Events of Default, and (b)
all representations and warranties of the Borrower and the Guarantors contained
in the Loan Documents (with such term being deemed to include this Amended and
Restated Tenth Amendment and the Credit Agreement) are true and correct in all
material respects with the same effect as if made on and as of such date, except
that Section 6.01 of the Credit Agreement shall be deemed to exclude any
Specified Events of Default.

     Section 8.2 Payment of Fees and Expenses. (a) The Borrower agrees to pay or
reimburse the Administrative Agent upon demand, for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation of
this Amended and Restated Tenth Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent.

     (b) The Borrower further agrees to pay to the Administrative Agent, for the
account of each Lender on a pro-rata basis, an extension fee in the amount
$500,000 (the "Extension Fee"). The Extension Fee shall be deemed to be earned
on the Effective Date and shall be payable as follows: (i) $350,000 on the
Effective Date and (ii) $150,000 on the earlier of the Termination Date or the
Expiration Date. It is understood that in the event that the Borrower shall
repay in full its obligations under the Credit Agreement and the other Loan
Documents prior to the earlier of the Termination Date or the Expiration Date,
the second installment of the Extension Fee shall be deemed waived. The
Administrative Agent and the Lenders acknowledge that the $350,000 installment
of the Extension Fee was paid prior to the execution of this Amended and
Restated Tenth Amendment.

     (c) The Borrower further agrees to pay to the Administrative Agent, for the
account of each Lender on a pro-rata basis, a restatement fee in the amount
$150,000 (the "Restatement Fee"). The Restatement Fee shall be deemed to be
earned on the Effective Date and shall be payable on the earlier of the
Termination Date or the Expiration Date.

     (d) The Borrower further agrees to pay to the Administrative Agent, for its
own account, an agency fee in the amount of $5,000 per month (the "Monthly
Agency Fee"). The Monthly Agency Fee shall be paid on the first Business Day of
each month, except that the Monthly Agency Fee for November and December 2000
shall be due on the Effective Date. The Administrative Agent acknowledges that
the Monthly Agency Fee with respect to November and December 2000 was paid prior
to the execution of this Amended and Restated Tenth Amendment.

<PAGE>

     Section 8.3 Counterparts. This Amended and Restated Tenth Amendment may be
executed by the parties hereto in any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.

     Section 8.4 GOVERNING LAW. THIS AMENDED AND RESTATED TENTH AMENDMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDED AND RESTATED TENTH
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     Section 8.5 Reservation of Rights. Notwithstanding anything contained in
this Amended and Restated Tenth Amendment to the contrary, the Borrower and each
Loan Party acknowledges that the Administrative Agent and the Lenders do not
waive, and expressly reserve, the right to exercise, at any time during the
Waiver Period, any and all of their rights and remedies under (a) the Credit
Agreement, any other Loan Document and applicable law in respect of the
Specified Events of Default against any Person other than the Borrower or any
Loan Party and (b) the Credit Agreement, any other Loan Document and applicable
law in respect of any Default or Event of Default other than the Specified
Events of Default.

     Section 8.6 Consent of Guarantors. Each Guarantor hereby (a) consents to
the transactions contemplated hereby and (b) acknowledges and agrees that the
guarantees (and all security therefor) contained in the Credit Agreement and the
other Loan Documents previously executed by it are, and shall remain, in full
force and effect after giving effect to this Amended and Restated Tenth
Amendment and all other prior modifications to the Credit Agreement.

     Section 8.7 Waiver. The Borrower and the Guarantors hereby release, waive,
and forever relinquish all claims, demands, obligations, liabilities and causes
of action of whatever kind or nature, whether known or unknown, which any of
them have, may have, or might assert at the time of execution of the Amended and
Restated Tenth Amendment or in the future against the Administrative Agent, the
Lenders and/or their parents, respective affiliates, participants, officers,
directors, employees, agents, attorneys, accountants, consultants, successors
and assigns, directly or indirectly, which occurred, existed, was taken,
permitted or begun prior to the execution of the Amended and Restated Tenth
Amendment, arising out of, based upon, or in any manner connected with (i) any
transaction, event, circumstance, action, failure to act or occurrence of any
sort or type, whether known or unknown, with respect to the Credit Agreement,
any other Loan Document and/or the administration thereof or the Obligations
created thereby; (ii) any discussions, commitments, negotiations, conversations
or communications with respect to the refinancing, restructuring or collection
of any Obligations related to the Credit Agreement, any other Loan Document
and/or the administration thereof or the Obligations created thereby, or (iii)
any matter related to the foregoing.

     Section 8.8 Confirmation of Indebtedness. The Borrower and the Guarantors
hereby confirm and acknowledge that, as of the Effective Date, (i) the Borrower
is truly and justly indebted to the Lenders, without defense, counterclaim or
offset of any kind, (ii) the Borrower is liable to the Lenders in respect of
Advances in the aggregate principal amount of $101,500,000, and (iii) each
Guarantor is contingently liable to the Lenders pursuant to such guarantee.
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Tenth Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.

                                                  PSC SCANNING, INC.

                                                  By:
                                                  Title:

<PAGE>

              FLEET NATIONAL BANK, as Agent, Issuing Bank and
              a Lender

              By:
              Title:

              CITIZENS BANK OF MASSACHUSETTS, as a Lender

              By:
              Title:

              HSBC BANK USA, as a Lender

              By:
              Title:

              KEY BANK, as a Lender

              By:
              Title:

              THE CHASE MANHATTAN BANK, as a Lender

              By:
              Title:

              M&T BANK, as a Lender

              By:
              Title:
<PAGE>

ACKNOWLEDGED AND AGREED

PSC INC.

By:

Title:

PSC AUTOMATION, INC.

By:

Title:

INSTAREAD CORPORATION

By:

Title:

PERCON INCORPORATED

By:

Title:

PSC BELGIUM, INC.

By:

Title:
<PAGE>

                                                                       EXHIBIT A

                                   SCHEDULE I

                                    Working
                                    Capital     Term Loan
Lender                            Commitments  Commitments
--------------------------------  -----------  -----------
Fleet National Bank                $7,920,000  $11,880,000
Citizens Bank of Massachusetts     $6,120,000  $ 9,180,000
HSBC Bank USA                      $6,120,000  $ 9,180,000
Key Bank                           $9,000,000  $13,500,000
The Chase Manhattan Bank           $7,920,000  $11,880,000
M&T Bank                           $7,920,000  $11,880,000

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