Document:

Amendment Nine and Consent and Waiver
                                       To
                                Credit Agreement

     This Amendment Nine and Consent and Waiver (this  "Amendment")  is dated as
of March 31,  2000 and is made in respect of the  Credit  Agreement  dated as of
July 12, 1996 as amended and in effect immediately prior to the date hereof (the
"Credit  Agreement")  by and among PSC  Scanning,  Inc., a Delaware  corporation
formerly  known as  SpectraScan,  Inc.,  which is the successor by merger to PSC
Acquisition,   Inc.,  (the  "Borrower"),   PSC  Inc.   ("PSC"),   the  financial
institutions  party  to the  Credit  Agreement  (the  "Lender  Parties"),  Fleet
National Bank (formerly known as Fleet Bank) as the "Initial  Issuing Bank", and
Fleet National Bank, as administrative agent (the "Administrative  Agent") under
the Credit Agreement.

                            Statement of the Premises
                            -------------------------

     The Borrower,  PSC, the Lender  Parties,  the Initial  Issuing Bank and the
Administrative  Agent have  previously  entered  into the Credit  Agreement  and
various  amendments  thereto from time to time.  The Borrower has requested that
the Lender Parties consent to a certain sale and lease-back  transaction,  waive
compliance  with certain  covenants  in the Credit  Agreement as affected by the
accounting  treatment  accorded to a recent court  decision,  and amend  certain
other covenants in the Credit Agreement to reflect the current  circumstances of
the Borrower.

                           Statement of Consideration
                           --------------------------

     Accordingly,  in consideration of the premises,  and under the authority of
     Section 5-1103 of the New York General  Obligations Law, the parties hereto
     agree as follows.

                                    Agreement
                                    ---------

1. Defined Terms. The terms "this Agreement", "hereunder" and similar references
in the  Credit  Agreement  shall be deemed to refer to the Credit  Agreement  as
amended hereby.  Capitalized  terms used and not otherwise  defined herein shall
have the meanings ascribed to such terms in the Credit Agreement.

2. Amendment.  Effective  as of March 31, 2000,  the Credit  Agreement is hereby
amended as follows:

     2.1  Section  1.01 of the  Credit  Agreement  is amended  by  deleting  the
          definitions of Adjusted  EBITDA,  Adjusted Total Debt Ratio and Percon
          Charge.

     2.2  Section  1.01  of the  Credit  Agreement  is  amended  by  adding  the
          definitions of "2000 Acquisition and Restructuring Charge", "2000 Sale
          Leaseback Prepayment",  "2000 Sale Leaseback  Transaction",  "Disputed
          Royalty Case", "Disputed Royalty Decision",  "Final Decision",  "Fixed
          Charge  Coverage  Ratio",   "Interest  Coverage  Ratio",   "Normalized
          Quarterly   Provisional   Charges  for  Disputed   Royalty",   "Proven
          Performance  Date",   "Quarterly   Provisional  Charges  for  Disputed
          Royalty",  "Senior Debt Ratio",  "Total Reserve for Disputed  Royalty"
          and "Undisputed Royalties", as follows:

                                      -18-
<PAGE>

          "2000 Acquisition and Restructuring Charge" means the one-time expense
          determined in accordance with GAAP charged to the Consolidated  Income
          Statement  in  the  first  fiscal  quarter  of  2000  relating  to the
          acquisition of Percon  Incorporated  and  restructuring by PSC and its
          Subsidiaries in an amount not exceeding $2,300,000.

          "2000 Sale Leaseback Prepayment" means the prepayment of any Borrowing
          pursuant to Section  2.06(b)(ii) of the Credit  Agreement by reason of
          the 2000 Sale Leaseback Transaction.

          "2000 Sale Leaseback  Transaction" means a sale leaseback  transaction
          whereby certain of the facilities of the Borrower  located in Webster,
          New York  shall  be sold  and  leased  back to the  Borrower  under an
          operating  lease (not a  Capitalized  Lease) on terms  approved by all
          Lenders.

          "Disputed  Royalty  Case" means the civil action in the United  States
          District Court,  Western District of New York,  numbered  96-CV-6152T,
          entitled PSC Inc. v. Symbol Technologies, Inc.

          "Disputed  Royalty  Decision"  means  the  Decision  and  Order  dated
          February 8, 2000  issued by Hon.  Michael A.  Telesca in the  Disputed
          Royalty Case and any related order or judgment.

          "Final  Decision"  means a final  judgment or order  entered into with
          respect to the  Disputed  Royalty  Decision  for which:  (i) PSC shall
          agree to be bound;  or (ii) no stay of enforcement  shall be in effect
          for a period  of ten (10)  consecutive  days by  reason  of a  pending
          appeal otherwise.

          "Fixed Charge  Coverage  Ratio" means a ratio,  measured at the end of
          each fiscal quarter of PSC, of

          (i)  Consolidated  EBITDA for the most recently  completed four fiscal
               quarters of PSC,  less  Consolidated  Capital  Expenditures  made
               during such period, less the aggregate amount of federal,  state,
               local and foreign  income taxes paid by PSC and its  Subsidiaries
               during  such  period,  plus,  for all  calculations  on  Dates of
               Determination  which  precede the Final  Decision,  the Quarterly
               Provisional  Charges for Disputed  Royalty  expensed  during each
               quarter in such four quarter period (but for all  calculations on
               Dates of  Determination  subsequent  to the  Final  Decision,  no
               Quarterly  Provisional  Charges  for  Disputed  Royalty  shall be
               added); to

          (ii) the sum of (a) cash interest  payable by PSC and its Subsidiaries
               on all Debt  during such  period  plus (b) cash  rentals  payable
               under  Capitalized   Leases  during  such  period  plus  (c)  the
               aggregate  amount  of  scheduled  principal  repayments  made  or
               required  to be made in  respect  of  Funded  Debt by PSC and its
               Subsidiaries during such period,  excluding mandatory prepayments
               of  principal  made  pursuant  to (1)  the  1999  Sale  Leaseback
               Prepayment,  (2) the  2000  Sale  Leaseback  Prepayment,  and (3)
               Section  2.06(b)(i),  plus (d) after the Proven Performance Date,
               the  aggregate  amount  of all  cash  dividends  paid  by PSC and
               Borrower on capital  stock  during  such period and the  purchase
               price  paid by PSC and its  Subsidiaries  during  such  period to
               purchase capital stock of PSC as permitted by Section 5.02(g).

                                      -19-
<PAGE>

          "Interest  Coverage  Ratio" means a ratio  measured at the end of each
          fiscal quarter of PSC of:

          (i)  Consolidated  EBITDA for the most recently  completed four fiscal
               quarters  of  PSC,  plus,  for  all   calculations  on  Dates  of
               Determination  which  precede the Final  Decision,  the Quarterly
               Provisional  Charges for Disputed  Royalty  expensed  during each
               quarter in such four quarter period (but for all  calculations on
               Dates of  Determination  subsequent  to the  Final  Decision,  no
               Quarterly  Provisional  Charges  for  Disputed  Royalty  shall be
               added); to

          (ii) Interest Expense of PSC and its Subsidiaries for such period.

          "Normalized Quarterly Provisional Charges for Disputed Royalty" means,
          for each fiscal quarter, severally: (i) through December 31, 1999, the
          amount listed on Schedule IV to reflect the  accounting  normalization
          attributable  to each  fiscal  quarter  of the  Quarterly  Provisional
          Charges for Disputed  Royalty;  and (ii) after  December 31, 1999,  an
          amount  equal  to  the  Quarterly  Provisional  Charges  for  Disputed
          Royalty.

          "Proven Performance Date" means the first fiscal quarter end date:

          (i)  which is subsequent to the Final Decision; and

          (ii) as of which Borrower shall have been in full  compliance with all
               terms of the Credit  Agreement for a minimum of four  consecutive
               fiscal quarters, which compliance shall be supported by financial
               statements delivered pursuant to Section 5.03(c) or (d).

          "Quarterly  Provisional  Charges for Disputed Royalty" means, for each
          fiscal quarter,  severally,  the amount  determined in accordance with
          GAAP of the  non-cash  expense  appearing on the  Consolidated  Income
          Statements  from time to time as a charge to earnings  reflecting  the
          amount  which may be payable in  respect  of such  quarter's  earnings
          pursuant to the Disputed Royalty Decision (exclusive of any Undisputed
          Royalties).

          "Senior Debt Ratio" means a ratio,  measured at the end of each fiscal
          quarter of PSC, of

          (i)  Senior Debt of PSC and its  Subsidiaries  outstanding on the Date
               of Determination; to

                                      -20-
<PAGE>

          (ii) Consolidated  EBITDA for the most recently  completed four fiscal
               quarters  of PSC,  plus the  Quarterly  Provisional  Charges  for
               Disputed  Royalty  in  respect  of  such  period,  less,  for all
               calculations on Dates of Determination,  the Normalized Quarterly
               Provisional  Charges for Disputed  Royalty  expensed  during each
               quarter in such four quarter period;

               provided,  however,  that for the purposes  solely of calculating
               the aggregate  principal amount of Senior Debt  outstanding,  the
               Working Capital  Advances shall be deemed to be outstanding in an
               aggregate  principal amount equal to the average principal amount
               outstanding on the last two fiscal  quarter end dates,  including
               the Date of Determination.

          "Total  Reserve  for  Disputed   Royalty"   means,   at  any  Date  of
          Determination, the amount determined in accordance with GAAP appearing
          on the  Consolidated  Balance  Sheet as of such Date of  Determination
          reflecting  the amount  which may be payable  pursuant to the Disputed
          Royalty Decision.

          "Undisputed  Royalties" means all liabilities determined in accordance
          with GAAP payable by PSC or its  Subsidiaries to Symbol  Technologies,
          Inc. or its affiliates  pursuant to and under the contracts  which are
          the subject of the Disputed Royalty Case and which were not in dispute
          in the  Disputed  Royalty  Case (i.e.,  the flat rate or 3% of the Net
          Sales Price of all Bar Code  Readers  sold under the  "Spectra-Physics
          license" as such term is used in the Disputed Royalty Decision).

     2.3  Section  1.01 of the  Credit  Agreement  is amended  by  changing  the
          definitions  of  "Applicable  Margin",  "Commitment  Fee  Percentage",
          "Consolidated",  "Debt",  "EBITDA",  "Excess  Cash  Flow",  "Permitted
          Liens",  "Total Debt Ratio", and "Working Capital  Commitment" to read
          in their entirety, as follows:

                                      -21-
<PAGE>

          "Applicable  Margin"  means at any time and from time to time (a) from
          March 31, 2000 and prior to August 1, 2000,  0.875% per year for Prime
          Rate Advances and 2.500% per year for Eurodollar  Rate  Advances,  and
          (b) from and after August 1, 2000, a percentage per year determined by
          reference to the Total Debt Ratio as set forth below:
<TABLE>
<CAPTION>

                                               Term Loan Facility
                                                   and Working                 Term Loan Facility and
                                                Capital Facility              Working Capital Facility
              Total Debt Ratio                 Prime Rate Advances            Eurodollar Rate Advances
            <S>                                        <C>                              <C>

              Level I:
              --------
            a ratio equal to or greater than           1.125%                           2.750%
            4.0:1
              Level II:
              ---------
            a ratio equal to or greater than           0.875%                           2.500%
            3.5:1 but less than 4.0:1
              Level III:
              ----------
            a ratio equal to or greater than           0.625%                           2.250%
            3.0:1 but less than 3.5:1
              Level IV:
              ---------
            a ratio equal to or greater than
            2.5:1 but less than 3.0:1                  0.375%                           2.00%
              Level V:
              --------
            a ratio equal to or greater than
            2.0:1 but less than 2.5:1                  0.125%                           1.750%
              Level VI:
              ---------
            a ratio equal to or greater than           0.000%                           1.500%
            1.5:1 but less than 2.0:1
              Level VII:
              ----------
            a ratio of less than 1.5:1                 0.000%                           1.250%

</TABLE>

                                      -22-
<PAGE>

          The Applicable  Margin for each Prime Rate Advance shall be determined
          by  reference  to the  ratio  in  effect  from  time to  time  and the
          Applicable Margin for each Eurodollar Rate Advance shall be determined
          by  reference  to the  ratio in effect  from  time to time;  provided,
          however,  that  (A)  no  change  in the  Applicable  Margin  shall  be
          effective  until  three  Business  Days  after  the date on which  the
          Administrative Agent receives financial statements pursuant to Section
          5.03(c) or (d) and a certificate of the chief financial officer of PSC
          demonstrating  such  ratio  and (B) if PSC has  not  submitted  to the
          Administrative  Agent the information  described in clause (A) of this
          proviso as and when required under Section 5.03(c) or (d), as the case
          may be, the Applicable  Margin shall be at Level I for so long as such
          information has not been received by the Administrative Agent.

          "Commitment  Fee  Percentage"  means at any time and from time to time
          (a) from March 31,  2000 and prior to August 1, 2000,  0.500% per year
          and (b)  from  and  after  August  1,  2000,  a  percentage  per  year
          determined by reference to the Total Debt Ratio as set forth below:

                         Total Debt Ratio              Commitment Fee Percentage

              Level I:
              --------
            a ratio equal to or greater than 4.0:1                0.500%
              Level II:
              ---------
            a ratio equal to or greater than 3.5:1 but            0.500%
            less than 4.0:1
              Level III:
              ----------
            a ratio equal to or greater than 3.0:1 but            0.500%
            less than 3.5:1
              Level IV:
              ---------
            a ratio equal to or greater than 2.5:1 but
            less than 3.0:1                                       0.375%
              Level V:
              --------
            a ratio equal to or greater than 2.0:1 but
            less than 2.5:1                                       0.375%
              Level VI:
              ---------
            a ratio equal to or greater than 1.5:1 but
            less than 2.0:1                                       0.300%
              Level VII:
              ----------
            a ratio of less than 1.5:1                            0.250%

          ;  provided,  however,  that  (A)  no  change  in the  Commitment  Fee
          Percentage shall be effective until three Business Days after the date
          on  which  the  Administrative  Agent  receives  financial  statements
          pursuant  to  Section  5.03(c) or (d) and a  certificate  of the chief
          financial officer of PSC  demonstrating  such ratio and (B) if PSC has
          not submitted to the Administrative Agent the information described in
          clause (A) of this proviso as and when required under Section  5.03(c)
          or (d), as the case may be, the Commitment Fee Percentage  shall be at
          Level I for so long as such  information  has not been received by the
          Administrative Agent.

                                      -23-
<PAGE>

          "Consolidated"  means,  when used in conjunction with any defined term
          or any  accounting  term,  such  defined  term or  accounting  term as
          applied  to PSC  and  its  Subsidiaries  on a  consolidated  basis  in
          accordance with GAAP.

          "Debt" of any Person means, without duplication,  (a) all indebtedness
          of such Person for borrowed money,  (b) all Obligations of such Person
          for the deferred  purchase  price of property or services  (other than
          trade  payables  not  overdue  by more  than 60 days  incurred  in the
          ordinary course of such Person's  business and trade payables that are
          being  contested in good faith),  (c) all  Obligations  of such Person
          evidenced by notes,  bonds,  debentures or other similar  instruments,
          (d) all  Obligations  of such  Person  created  or  arising  under any
          conditional  sale or other title  retention  agreement with respect to
          property  acquired by such Person (even though the rights and remedies
          of the seller or lender  under such  agreement in the event of default
          are  limited  to  repossession  or sale of such  property),  excluding
          operating  leases,  (e) all Obligations of such Person as lessee under
          Capitalized  Leases (without  double counting such  Obligations in the
          computation of "Debt"), (f) all Obligations,  contingent or otherwise,
          of  such  Person  under  acceptance,   letter  of  credit  or  similar
          facilities,  (g) all  Obligations of such Person to purchase,  redeem,
          retire,  defease  or  otherwise  make any  payment  in  respect of any
          capital stock of or other  ownership or profit interest in such Person
          or any other Person or any warrants, rights or options to acquire such
          capital stock,  valued, in the case of Redeemable  Preferred Stock, at
          the greater of its  voluntary or  involuntary  liquidation  preference
          plus accrued and unpaid dividends,  (h) all Obligations of such Person
          in respect of Hedge Agreements,  (i) all Debt of others referred to in
          clauses (a) through (h) above or clause (j) below guaranteed  directly
          or  indirectly in any manner by such Person,  or in effect  guaranteed
          directly or indirectly by such Person  through an agreement (i) to pay
          or purchase such Debt or to advance or supply funds for the payment or
          purchase of such Debt,  (ii) to purchase,  sell or lease (as lessee or
          lessor) property,  or to purchase or sell services,  primarily for the
          purpose  of  enabling  the  debtor to make  payment of such Debt or to
          assure the holder of such Debt against loss,  (iii) to supply funds to
          or in any other manner invest in the debtor  (including  any agreement
          to pay for property or services  irrespective of whether such property
          is received or such services are rendered) or (iv) otherwise to assure
          a creditor  against loss,  and (j) all Debt referred to in clauses (a)
          through  (i)  above of  another  Person  secured  by (or for which the
          holder of such Debt has an existing right, contingent or otherwise, to
          be secured by) any Lien on property  (including,  without  limitation,
          accounts and contract  rights) owned by such Person,  even though such
          Person has not assumed or become  liable for the payment of such Debt;
          provided  however that (A) for the purposes of Section  5.02(b) of the
          Agreement,  Debt  shall not be deemed to  include  amounts  payable to
          George A. Plesko  pursuant to and in accordance  with the GEO/GAP Term
          Sheet,  and (B) for all purposes,  Debt shall not be deemed to include
          amounts which may be payable pursuant to the Disputed Royalty Decision
          until it becomes a Final  Decision  (and then such amount shall not be
          double counted as Debt).

                                      -24-
<PAGE>

          EBITDA" means, for any period,  the sum,  determined on a Consolidated
          basis, of (a) net income (or net loss) plus: (i) the 2000  Acquisition
          and  Restructuring  Charge  (which is taken  only in the first  fiscal
          quarter in 2000),  less (ii) that portion of the 2000  Acquisition and
          Restructuring  Charge actually paid within such period, less (iii) any
          gain arising from a reversal of the 2000 Acquisition and Restructuring
          Charge,  and, less (iv) on the fiscal quarter end date of December 31,
          2000, the balance of the 2000  Acquisition  and  Restructuring  Charge
          which the Borrower has not paid in cash;  (b)  interest  expense;  (c)
          income tax expense;  (d)  depreciation  expense;  and (e) amortization
          expense  in  each  case of PSC and  its  Subsidiaries,  determined  in
          accordance  with GAAP for such  period;  less,  however,  the Excluded
          Leaseback Gain, if any,  accruing during such period and plus the loss
          on sale of  assets,  if  any,  incurred  by the  2000  Sale  Leaseback
          Transaction;  provided  further that if the period for which EBITDA is
          being computed includes any or all of the fiscal quarters ending on or
          about March 31, 1999,  June 30, 1999,  September 30, 1999 and December
          31, 1999, EBITDA shall be calculated by using the Pro Forma EBITDA for
          each such fiscal quarter in such period.

          "Excess  Cash Flow"  means for any period the sum of (i) EBITDA of PSC
          and its Subsidiaries for such period plus (ii) the aggregate amount of
          all  non-cash  charges  deducted  in  arriving at EBITDA plus (iii) if
          there was a net increase in  Consolidated  Current  Liabilities of PSC
          and its  Subsidiaries  during  such  period,  the  amount  of such net
          increase plus (iv) if there was a net decrease in Consolidated Current
          Assets   (excluding  cash  and  Cash   Equivalents)  of  PSC  and  its
          Subsidiaries  during such period the amount of such net decrease  less
          (v) the aggregate  amount of scheduled  principal  repayments  made or
          required  to be  made  in  respect  of  Funded  Debt  by PSC  and  its
          Subsidiaries during such period,  excluding  mandatory  prepayments of
          principal made pursuant to (1) the 1999 Sale Leaseback Prepayment, (2)
          the 2000 Sale Leaseback Prepayment,  and (3) Section 2.06(b)(i),  less
          (vi) Capital  Expenditures of PSC and its Subsidiaries  less (vii) the
          aggregate amount of all federal, state, local and foreign income taxes
          paid by PSC and its  Subsidiaries  during  such period less (viii) the
          aggregate  amount of  interest  paid on any Funded Debt of PSC and its
          Subsidiaries during such periods less (ix) the aggregate amount of all
          non-cash credits included in arriving at such EBITDA less (x) if there
          was a net decrease in Consolidated  Current Liabilities of PSC and its
          Subsidiaries  during such period, the amount of such net decrease less
          (xi) if  there  was a net  increase  in  Consolidated  Current  Assets
          (excluding  cash and  Cash  Equivalents)  of PSC and its  Subsidiaries
          during  such  period the amount of such  increase;  provided  further,
          however,  that all  computations  of  Consolidated  Current Assets and
          Consolidated  Current  Liabilities for the fiscal year ending December
          31,  1999  shall be made using the  Pro-Forma  Balance  Sheet  annexed
          hereto as Schedule V.

          "Permitted  Liens"  means  such  of  the  following  as  to  which  no
          enforcement,  collection,  execution,  levy or foreclosure  proceeding
          shall  have  been  commenced:  (a) Liens for  taxes,  assessments  and
          governmental  charges  or levies  not yet due and  payable;  (b) Liens
          imposed  by  law,  such  as  materialmen's,   mechanics',   carriers',
          workmen's and repairmen's Liens and other similar Liens arising in the
          ordinary course of business securing  obligations that are not overdue
          for a period of more than 30 days;  (c)  pledges or deposits to secure
          obligations under workers' compensation laws or similar legislation or
          to secure public or statutory obligations; (d) Permitted Encumbrances,
          and (e) Liens created pursuant to the 1999 Sale Leaseback  Transaction
          and the 2000 Sale Leaseback Transaction.

                                      -25-
<PAGE>

          "Total Debt Ratio" means, on any Date of  Determination,  the ratio of
          (A) the aggregate amount of Total Reserve for Disputed Royalty and all
          Debt of PSC and its  Subsidiaries on the last day of the most recently
          completed  fiscal quarter of PSC (without double counting in the event
          that Debt shall  include  the  amount  payable in respect of the Final
          Decision) to (B) Consolidated  EBITDA for the most recently  completed
          four fiscal  quarters of PSC, plus the Quarterly  Provisional  Charges
          for Disputed Royalty expensed during each quarter in such four quarter
          period, less the Normalized Quarterly Provisional Charges for Disputed
          Royalty in respect of such four  quarter  period;  provided,  however,
          that for purposes solely of calculating  the aggregate  amount of Debt
          outstanding,  the  Working  Capital  Advances  shall be  deemed  to be
          outstanding  in an  aggregate  principal  amount  equal to the average
          principal amount outstanding on the last two fiscal quarter end dates,
          including the Date of Determination.

     2.4  The last  sentence  of  Subsection  (c) of Section  2.01 of the Credit
          Agreement is amended to read in its entirety, as follows:

          Within the limits of each  Working  Capital  Lender's  Unused  Working
          Capital  Commitment  in effect  from time to time,  the  Borrower  may
          borrow under this Section 2.01(c),  prepay pursuant to Section 2.06(a)
          and reborrow under this Section 2.01(c),  up to an aggregate principal
          amount  outstanding  not exceeding at any time the sum of  $50,000,000
          less the Total  Reserve for  Disputed  Royalty so long as the Disputed
          Royalty Decision remains  substantially  effective and until the Final
          Decision.

     2.5  The first  sentence of  Subparagraph  (i) of Subsection (b) of Section
          2.06 of the  Credit  Agreement  is  amended  by adding  the  following
          proviso  at the  end  thereof:  ";  provided,  however,  that  no such
          prepayment shall be made for the Fiscal Year ending December 31, 1999.

     2.6  Subsection  (c) of Section 5.02 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (c)  Lease Obligations.  Create,  incur, assume or suffer to exist, or
               permit any of their  respective  Subsidiaries  to create,  incur,
               assume or suffer to exist,  any obligations as lessee (i) for the
               rental or hire of real or personal  property in  connection  with
               any sale leaseback  transaction excluding the 1999 Sale Leaseback
               Transaction and the 2000 Sale Leaseback Transaction,  or (ii) for
               the rental or hire of real or personal property of any kind under
               leases or agreements to lease,  including  Capitalized Leases and
               operating leases pursuant to the 1999 Sale Leaseback  Transaction
               and the 2000 Sale Leaseback  Transaction  having an original term
               of one year or more that would  cause the  direct and  contingent
               liabilities of PSC and its Subsidiaries, on a Consolidated basis,
               in respect of all such  obligations  (as described in this clause
               (ii)) to exceed an aggregate amount of $5,000,000  payable in any
               period of 12 consecutive months.

                                      -26-
<PAGE>

     2.7  Subsection  (g) of Section 5.02 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (g)  Dividends, Etc. Declare or pay any dividends,  purchase,  redeem,
               retire, defease or otherwise acquire for value any of its capital
               stock or any warrants,  rights or options to acquire such capital
               stock,  now or hereafter  outstanding,  return any capital to its
               stockholders  as such, make any  distribution of assets,  capital
               stock, warrants,  rights,  options,  obligations or securities to
               its  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 its  Subsidiaries  to do any of the  foregoing  or
               permit  any of its  Subsidiaries  to  purchase,  redeem,  retire,
               defease or otherwise  acquire for value any capital  stock of 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
               that after the Proven  Performance Date the following actions may
               be taken if, after giving effect to each such action, PSC and the
               Borrower shall be in full compliance  with all terms,  conditions
               and  covenants  of this  Agreement:  (i) PSC may  declare and pay
               dividends and distributions  payable only in common stock of PSC,
               (ii) a Foreign  Subsidiary  may  declare  and pay  dividends  and
               distributions  to PSC,  provided  that the Secured  Parties shall
               have a perfected first priority security interest in the property
               comprising  such  dividends  or  distribution  and  (iii) PSC may
               acquire  shares of its  common  stock for an  aggregate  purchase
               price  during  the  period  from  the  date  hereof  through  the
               Termination Date not to exceed $12,000,000, provided that, at the
               time of such  acquisition  and  immediately  after giving  effect
               thereto,  (x)  the  excess  of  Consolidated  total  assets  over
               Consolidated total liabilities shall not be less than $44,000,000
               and (y) no Default shall have occurred and be continuing.

     2.8  Subsection  (a) of Section 5.04 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (a)  Fixed Charge Coverage  Ratio.  Maintain at the end of each fiscal
               quarter of PSC a Fixed Charge Coverage Ratio of not less than (i)
               1.15 to 1.00 for each  fiscal  quarter  ending in 2000,  and (ii)
               1.25 to 1.00 thereafter.

     2.9  Subsection  (b) of Section 5.04 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (b)  Total Debt Ratio.  Maintain at the end of each fiscal  quarter of
               PSC a Total Debt Ratio of not more than the following  ratios set
               forth below for the corresponding Dates of Determination:

          Dates of Determination               Ratio

          3/31/00                              3.75 to 1.00
          6/30/00                              4.25 to 1.00
          9/30/00                              4.00 to 1.00
          12/31/00                             3.75 to 1.00
          3/31/01 and thereafter               3.25 to 1.00

                                      -27-
<PAGE>

     2.10 Subsection  (c) of Section 5.04 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (c)  Senior Debt Ratio.  Maintain at the end of each fiscal quarter of
               PSC a Senior Debt Ratio of not more than the following ratios set
               forth below for the corresponding Dates of Determination:

          Dates of Determination               Ratio

          3/31/00                              2.75 to 1.00
          6/30/00                              3.10 to 1.00
          9/30/00                              2.90 to 1.00
          12/31/00                             2.50 to 1.00
          3/31/01 and thereafter               2.00 to 1.00

     2.11 Subsection  (d) of Section 5.04 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (d)  Interest  Coverage  Ratio.  Maintain as of the end of each fiscal
               quarter of PSC an  Interest  Coverage  Ratio of ratio of not less
               than the following  ratios set forth below for the  corresponding
               Dates of Determination:

          Dates of Determination               Ratio

          3/31/00                              3.50 to 1.00
          6/30/00                              3.50 to 1.00
          9/30/00                              3.25 to 1.00
          12/31/00                             3.25 to 1.00
          3/31/01 and thereafter               3.50 to 1.00

     2.12 Subsection  (e) of Section 5.04 of the Credit  Agreement is amended to
          read in its entirety, as follows:

          (e)  Net Worth.  Maintain at all times an excess of Consolidated total
               assets over Consolidated total liabilities,  in each case, of the
               Borrower  and its  Subsidiaries  of not less than the sum of: (A)
               $47,000,000,  plus (B) 75% of  Consolidated  net  income for each
               fiscal  quarter  of PSC and  its  Subsidiaries,  on a  cumulative
               basis,  with no  deduction  for  losses of any  quarter,  for the
               period after  December 31, 1999 to and including each quarter end
               date.

     2.13 Schedule III and Schedule IV to the Agreement shall be in the forms of
          Schedule III and Schedule IV attached hereto.

3. Future  Consent  And  Waiver  To 2000 Sale  Leaseback.  If all of the  Lender
Parties  shall (in the future,  when the term sheet for the 2000 Sale  Leaseback
shall have been  presented  to the Lender  Parties  for  approval)  consent  (in
writing)  to the 2000  Sale  Leaseback,  then:  (i) no  additional  fee shall be
charged by the Lenders  solely for such  consent,  (ii) the  Lenders  shall have
waived  the  right  to  deem  the  2000  Sale  Leaseback  to be a  violation  of
Subsections  (a),  (b),  (c) and (d) of  Section  5.02 or a Default  or Event of
Default  under  the  Credit  Agreement  by  reason  of  noncompliance  with such
Sections,  and (iii) the Agent  shall  release any Lien  created  under the Loan
Documents on the assets subject to the 2000 Sale Leaseback;  provided and on the
condition  that all of the Net Cash Proceeds to be received by the Borrower from
the 2000 Sale  Leaseback  shall be paid  directly  to the Agent and applied as a
prepayment of the Term Loan  Facility  pursuant to Section  2.06(b)(ii).  In the
event and to the extent that such  prepayment  would result in a prepayment of a
Eurodollar  Rate Advance on a date other than the last day of the  corresponding
Interest  Period,  the Agent shall hold such prepayment in an account until such
last day and shall  effect the  prepayment  on such last day. No approval by the
Lender Parties of the 2000 Sale Leaseback shall be implied by this Amendment.

                                      -28-
<PAGE>

4. Other Waivers. The undersigned Lender Parties hereby waive noncompliance with
Subsection  (d) of Section 5.03 as of March 30, 2000 (the 90th day after the end
the Fiscal Year  ending on December  31,  1999);  provided  (i) that PSC and the
Borrower shall fully comply with Subsection (d) of Section 5.03 on or before the
tenth day following the day on which this Amendment shall have become  effective
in accordance with Section 5 below,  and (ii) that the information  contained in
the financial  statements to be delivered  pursuant to Subsection (d) of Section
5.03 for the  fiscal  year end of  December  31,  1999  shall  not vary from the
financial  information  delivered to the Lenders under the PSC's letter of March
15, 2000. The undersigned  Lender Parties also hereby waive  noncompliance  with
Subsection (a) of Section 5.04 of the Credit Agreement as of December 31, 1999.

5. Conditions  Precedent  to  Effectiveness.  This  Amendment  shall  not become
effective unless and until: (a) the holders of the Subordinated  Debt shall have
made such consents and amendments in respect of all Subordinated  Debt Documents
as shall be necessary  (collectively,  the "Current  SubDebt  Amendment") to (i)
preserve,  after  giving  effect to this  Amendment,  the  relative  differences
between the financial levels required pursuant to the financial covenants in the
Credit Agreement and the corresponding  financial  covenants in the Subordinated
Debt  Documents  which  were in effect  prior to  Amendment  Eight to the Credit
Agreement  dated as of January 19, 2000 (and in  furtherance of the agreement by
PSC, the Borrower and the holders of the Subordinated  Notes pursuant to Section
3 of the letter  agreement  dated  January 18, 2000 among PSC,  the Borrower and
such  holders);  (ii) cause the  financial  covenants in the  Subordinated  Debt
Documents to be calculated in a manner  identical to the financial  covenants in
the Credit  Agreement  (as  amended by this  Amendment);  (iii)  consent to this
Amendment;  and (iv) confirm that the  Obligations of the Loan Parties under the
Loan Documents constitute "Superior Indebtedness" as defined in the Subordinated
Debt  Documents;  (b) the  Required  Lenders  shall have granted  their  written
consent to the Current SubDebt Amendment; (c) the Borrowers shall have furnished
to the Administrative  Agent all such  confirmations,  supporting  documents and
opinions of counsel as the  Administrative  Agent may specify;  (d) the Borrower
shall  have paid to the Agent for the  account  of each of the  Lender  Parties,
pro-rata  according to the amount of the total Commitments of each Lender Party,
a fee equal to the sum of one-half of one percent (0.50%) of the amount of total
Commitments  of all  Lender  Parties;  and  (e) all  post  closing  items  to be
completed by the Borrower in respect of Amendment Eight to the Credit  Agreement
dated as of January 19, 2000 shall have been completed.

                                      -29-
<PAGE>

6. Effect on the Credit  Agreement.  Except as specifically  amended above,  the
Credit  Agreement  shall remain in full force and effect and is hereby  ratified
and confirmed.  The Borrower and PSC each  acknowledge and agree that the Credit
Agreement (as amended by this  Amendment)  and each other Loan Document to which
each is a party is in full force and effect, that its Obligations thereunder and
under this Amendment are its legal,  valid and binding  obligations  enforceable
against  it in  accordance  with the terms  thereof  and  hereof,  and it has no
defense,  whether legal or equitable,  setoff or counterclaim to the payment and
performance of such Obligations.

7. Expenses.   The  Borrower  shall pay  promptly  when  billed  all  reasonable
out-of-pocket  expenses of each of the Lender Parties and the Agent  (including,
but not limited to,  reasonable  fees,  charges and  disbursements of counsel to
each  of the  Lender  Parties  and  the  Agent)  incident  to  the  preparation,
negotiation, execution, administration and enforcement of the this Amendment and
all documents and transactions required in connection with this Amendment.

8. Execution in Counterparts and  Effectiveness.  This Amendment may be executed
in any number of  counterparts  and by the different  parties hereto on separate
counterparts,  each of which shall be deemed to be an original, and all of which
taken  together  shall  constitute  one and the same  Amendment,  regardless  of
whether  or not  the  execution  by  all  parties  shall  appear  on any  single
counterpart.  Delivery of an executed  counterpart  of a signature  page to this
Amendment by  telecopier  shall be effective as delivery of a manually  executed
counterpart of this Amendment.  This Amendment will become effective (subject to
the terms of Section 5 above) when the Administrative  Agent shall have received
counterparts of this Amendment which,  when taken together,  bear the signatures
of the Borrower, PSC, the Administrative Agent and all of the Lenders.

9. Applicable  Law.   Pursuant  to  Section  5-1401  of  the  New  York  General
Obligations  Law, the laws of the State of New York shall  govern the  validity,
construction, enforcement and interpretation of this Amendment in whole.

10.Headings.  The headings of  this Amendment  are for the purposes of reference
only and shall not limit or otherwise affect the meanings hereof.

                                      -30-
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused a counterpart of this
Amendment  to be executed  and  delivered  by their  respective  representatives
thereunto duly authorized, as of the date first above written.

PSC Inc.                                     PSC Scanning, Inc.

By:                                          By:
Title:   Vice President, Chief Financial     Title:   Vice President
         Officer & Treasurer

Fleet National Bank, As Initial              Fleet National Bank, As
Issuing Bank                                 Administrative Agent

By:                                          By:
Title:                                       Title:

Fleet National Bank                          The Chase Manhattan Bank

By:                                          By:
Title:                                       Title:

Manufacturers & Traders                      Key Bank National
Trust Company                                Association

By:                                          By:
Title:                                       Title:

Citizens Bank of Massachusetts               HSBC Bank USA

By:                                          By:
Title:                                       Title:

                                      -31-
<PAGE>

                                  Schedule III
                                  ------------

                                 ProForma EBITDA
                       PSC Inc./Percon, Inc. Consolidated
                                     (000's)

                      Q1 1999         Q2 1999          Q3 1999        Q4 1999
                      -------         -------          -------        -------
Net Income/(Loss)      2,704           4,245            4,754           (546)
Interest Expense       2,101           1,878            1,770          1,709
Income Tax Expense     1,499           2,742            2,554           (160)
Depreciation Expense   1,719           1,731            1,877          1,881
Amortization Expense   1,887           1,858            1,868          1,682
                      -------         -------          -------        -------
EBITDA                 9,910          12,454           12,823          4,566

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

                                   Schedule IV
                                   -----------

          Normalized Quarterly Provisional Charges for Disputed Royalty

             Q1 1999         Q2 1999          Q3 1999        Q4 1999
             -------         -------          -------        -------
              1,378           1,121            1,514          1,753

                                      -32-
<PAGE>

                                   Schedule V
                                   ----------

                        PSC Inc. and Percon Incorporated
                       Consolidated ProForma Balance Sheet
                             As of December 31, 1999
                                     (000's)

Current Assets:

  Cash and Cash Equivalents                                           $   9,746
  Accounts Receivable, Net                                               44,400
  Inventories, Net                                                       26,999
  Prepaid Expenses and Other                                              3,795
                                                                      ---------
    Total Current Assets                                                 84,940

Property, Plant and Equipment                                            55,244
Accumulated Depreciation                                                (26,468)
                                                                      ---------
                                                                         28,776

Deferred Tax Assets                                                      20,952

Intangible and Other Assets                                             124,126
Accumulated Amortization                                                (27,476)
                                                                      ---------
                                                                         96,650
                                                                      ---------
    Total Assets                                                      $ 231,318
                                                                      =========

LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities:
  Current Portion of Long-Term Debt                                   $  16,384
  Accounts Payable                                                       22,826
  Accrued Expenses                                                       10,200
  Accrued Payroll and Commissions                                         6,428
                                                                      ---------
   Total Current Liabilities                                             55,838

Long-Term Debt, less current maturities                                 116,112
Accrued Provision for Disputed Royalties                                  6,400
Other Long-Term Liabilities                                               1,635

Shareholders' Equity:
  Preferred Stock                                                             1
  Common Shares/ Additional PIC                                          71,964
  Retained Earnings                                                     (18,065)
  Accumulated Other Comprehensive Income                                 (1,210)
  Less: Treasury Shares                                                  (1,357)
                                                                      ---------
    Total Shareholders' Equity                                           51,333
                                                                      ---------
    Total Liabilities and Shareholders' Equity                        $ 231,318
                                                                      =========

                                      -33-PSC INC.
                               PSC SCANNING, INC.
                                 675 Basket Road
                             Webster, New York 14580

                                                            As of March 31, 2000

JOHN HANCOCK LIFE INSURANCE COMPANY (formerly
John Hancock Mutual Life Insurance Company)
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
200 Clarendon Street
Boston, Massachusetts 02117

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
LINCOLN NATIONAL INCOME FUND, INC.
c/o Lincoln Investment Management, Inc.
200 East Berry Street
Renaissance Square
Ft. Wayne, Indiana  46802

SECURITY-CONNECTICUT LIFE INSURANCE COMPANY
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South
Suite 800
Minneapolis, Minnesota  55401

THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
c/o Alliance Capital Management L.P.
1345 Avenue of the Americas, 37th Floor
New York, New York  10105

     Re: Amendment  No. 6 and  Consent  and  Waiver  Under  Securities  Purchase
         Agreements

Ladies and Gentlemen:

     PSC INC., a New York corporation (the "Holding Company"), and PSC SCANNING,
INC.,  a  Delaware  corporation   (formerly  named  SpectraScan,   Inc.)  and  a
Wholly-Owned  Subsidiary of the Holding Company (the  "Operating  Company") (the
Holding Company and the Operating Company are sometimes collectively referred to
herein as the "Companies" and each as a "Company"),  jointly and severally agree
with you as follows:

                                      -34-
<PAGE>

     1.  Definitions; Background.

         (a)   Reference  is hereby made to those  certain  Securities  Purchase
     Agreements  dated July 12, 1996, as amended,  modified and  supplemented by
     (i)  Amendment No. 1 to Securities  Purchase  Agreements  dated October 10,
     1996, (ii) Amendment No. 2 and Waivers Under Securities Purchase Agreements
     dated as of July 4, 1997,  (iii)  Amendment  No. 3 to  Securities  Purchase
     Agreements  and Warrants  dated  August 18,  1997,  (iv) Consent and Waiver
     Under Securities  Purchase Agreements and Warrants dated December 29, 1997,
     (v)  Amendment  No.  4,  Consent  and  Waiver  Under  Securities   Purchase
     Agreements  dated March 1, 1999,  (vi)  Amendment  No. 5 and Consent  Under
     Securities  Purchase  Agreements  dated December 20, 1999 and (vii) Consent
     Under  Securities  Purchase  Agreements dated January 19, 2000 (as the same
     may be amended, modified or supplemented from time to time, the "Securities
     Purchase Agreements"), among the Holding Company, the Operating Company and
     each of you.  Capitalized  terms used herein  without  definition  have the
     meanings ascribed to them in the Securities Purchase Agreements.

         (b)   The Companies have requested that,among other things, the holders
     of the Securities issued pursuant to the Securities Purchase Agreements (i)
     amend  the  financial   covenants  contained  in  the  Securities  Purchase
     Agreements and (ii) consent to the proposed sale  leaseback  transaction of
     certain  facilities of the Operating  Company located in Webster,  New York
     and, upon and subject to the terms and conditions  hereof,  such holders by
     their execution hereof agree to the same.

     2.  Amendments to the Securities Purchase Agreements.

         (a)   Section  10.1  of the  Securities  Purchase  Agreements  (Certain
     Definitions)  is hereby  amended  to revise  the  definition  of  "Superior
     Indebtedness"  appearing  therein by (i) deleting the figure  "$84,000,000"
     appearing  therein and inserting the figure  "$78,750,000" in place thereof
     and (ii) deleting the figure "$21,000,000"  appearing therein and inserting
     the figure "$52,500,000" in place thereof.

         (b)   Section 14.6(a) of the Securities Purchase Agreements (Limitation
     on Restricted Payments; Payments on Seller Notes) is hereby amended to read
     in its entirety as follows:

               "(a) Neither Company will, and neither Company will permit any of
         their  respective  Subsidiaries  to,  directly or  indirectly,  make or
         commit  to  make any  Restricted  Payment;  provided  that the  Holding
         Company  may acquire  shares of Common Stock for an aggregate  purchase
         price  not  to  exceed  $12,000,000  if,  both at the time of each such
         purchase and immediately after giving effect

                                      -35-
<PAGE>

         thereto, (i)  Consolidated Net Worth shall be not less than $44,000,000
         and (ii)  no  Default or Event of Default  shall have  occurred  and be
         continuing."

         (c)   Section 14.7  of  the  Securities  Purchase  Agreements  (Certain
     Financial Covenants)  is hereby amended to read in its entirety as follows:

         "14.7.  Certain Financial Covenants. The Companies will, and will cause
     their respective Subsidiaries to:

               (a) Fixed  Charge  Coverage  Ratio.  Maintain  at the end of each
          fiscal quarter of the Holding Company  specified below in this section
          14.7(a) a Fixed Charge  Coverage  Ratio of not less than the ratio set
          forth below for such period:

               Four Fiscal Quarters Ending                       Ratio
               ---------------------------                       -----

                        3/31/00                               1.05 to 1.00
                        6/30/00                               1.05 to 1.00
                        9/30/00                               1.05 to 1.00
                        12/31/00                              1.05 to 1.00
                        3/31/01 and the last day of
                        each fiscal quarter thereafter        1.15 to 1.00

               (b) Adjusted Consolidated Indebtedness Ratio. Maintain at the end
          of each fiscal quarter of the Holding Company  specified below in this
          section 14.7(b) an Adjusted  Consolidated  Indebtedness Ratio for such
          date of not more than the ratio set forth below for such period:

               Four Fiscal Quarters Ending                       Ratio
               ---------------------------                       -----

                        3/31/00                               4.25 to 1.00
                        6/30/00                               4.75 to 1.00
                        9/30/00                               4.50 to 1.00
                        12/31/00                              4.25 to 1.00
                        3/31/01 and the last day of
                        each fiscal quarter thereafter        3.75 to 1.00

               (c) Senior Debt to Adjusted EBITDA Ratio.  Maintain at the end of
          each fiscal  quarter of the Holding  Company  specified  below in this
          section 14.7(c) a ratio of (i) Consolidated Senior Debt outstanding on
          the last day of such  fiscal  quarter  (provided  that the  portion of
          Consolidated Senior Debt constituting Working Capital Advances

                                      -36-
<PAGE>

          (as defined in the Bank  Credit  Agreement)  shall be deemed,  for the
          purpose  of this  calculation,  to be an amount  equal to the  average
          principal  amount thereof  outstanding on such day and on the last day
          of  the  then  most   recently-completed   fiscal   quarter)  to  (ii)
          Consolidated  Adjusted  EBITDA for the most  recently  completed  four
          fiscal  quarters  of the  Holding  Company,  plus  (x)  the  Quarterly
          Provisional  Charges for Disputed  Royalty expensed during each fiscal
          quarter in such four fiscal  quarter  period,  less (y) the Normalized
          Quarterly  Provisional Charges for Disputed Royalty in respect of such
          four fiscal quarter period, of not more than the ratio set forth below
          for such period:

               Four Fiscal Quarters Ending                       Ratio
               ---------------------------                       -----

                        3/31/00                               3.25 to 1.00
                        6/30/00                               3.60 to 1.00
                        9/30/00                               3.40 to 1.00
                        12/31/00                              3.00 to 1.00
                        3/31/01 and the last day of
                        each fiscal quarter thereafter        2.50 to 1.00

               (d) Net Worth.  Maintain  at all times an excess of  Consolidated
          Total Assets over Consolidated  Total Liabilities of not less than the
          sum of (i)  $47,000,000,  plus (ii) 50% of positive  Consolidated  Net
          Income (without adjustment for any loss) for the period after December
          31, 1999 to and  including  each date of  determination  computed on a
          cumulative basis for said entire period."

          (d) Section 14.8 of the Securities Purchase Agreements  (Limitation on
     Investments)  is hereby amended (i) by deleting the word "and" appearing at
     the end of clause (f) therein,  (ii) by deleting  the "."  appearing at the
     end of clause (g) therein and  inserting "; and" in place thereof and (iii)
     by inserting  the  following  new clause (h)  immediately  after clause (g)
     therein:

               "(h) the Percon Acquisition."

          (e) Section 14.9 of the Securities Purchase Agreements  (Limitation on
     Liens) is hereby  amended (i) by deleting  the word "and"  appearing at the
     end of clause (e) therein, (ii) by deleting the "." appearing at the end of
     clause  (f)  therein  and  inserting  ";" in  place  thereof  and  (iii) by
     inserting the following  new clauses (g) and (h)  immediately  after clause
     (f) therein:

                                      -37-
<PAGE>

               "(g) Liens assumed in the Percon  Acquisition,  provided that the
          aggregate  outstanding  amount  secured by such Liens shall not exceed
          $200,000 at any time; and

               (h) Liens created pursuant to the 1999 Sale Leaseback Transaction
          and the 2000 Sale Leaseback Transaction."

          (f)  Section   14.11(a)   of  the   Securities   Purchase   Agreements
     (Limitations  on  Rental  Obligations)  is  hereby  amended  to read in its
     entirety as follows:

               "(a) create,  incur, assume or suffer to exist any obligations as
          lessee  (i) for the  rental or hire of real or  personal  property  in
          connection  with any sale and  leaseback  transaction  or (ii) for the
          rental or hire of other real or  personal  property  of any kind under
          leases or  agreements  to lease  including  Capital  Leases  having an
          original  term of one year or more that would  cause the  Consolidated
          Rental  Obligations  in  respect  of all such  obligations  to  exceed
          $5,000,000 payable in any period of 12 consecutive months; or"

          (g) Section 15.1 of the Securities Purchase Agreements (Definitions of
     Capitalized Terms) is hereby amended:

               (i)  to  insert  the   following   definitions   in   appropriate
          alphabetical order:

                    ""Amendment  No. 6" shall mean that certain  Amendment No. 6
               and Consent and Waiver Under Securities Purchase Agreements dated
               as of March 31, 2000."

                    ""Disputed  Royalty Case" shall mean the civil action in the
               United  States  District  Court,  Western  District  of New York,
               numbered 96-CV-6152T,  entitled "PSC Inc. v. Symbol Technologies,
               Inc.""

                    ""Disputed  Royalty  Decision"  shall mean the  Decision and
               Order dated February 8, 2000 issued by Hon. Michael A. Telesca in
               the Disputed Royalty Case and any related order or judgment."

                    ""Excluded  Leaseback  Gain"  shall mean all gain  (gross --
               before tax) resulting from the 1999 Sale Leaseback Transaction or
               a termination of the lease  thereunder if (and only if) such gain
               is more than  $50,000  during any period  comprised  of four full
               consecutive  fiscal  quarters  taken  together as one  accounting
               period."

                                      -38-
<PAGE>

                    ""Final  Decision"  shall  mean a final  judgment  or  order
               entered into with respect to the  Disputed  Royalty  Decision for
               which (a) the Companies shall agree to be bound or (b) no stay of
               enforcement  shall be in effect  for a period  of 10  consecutive
               days by reason of a pending appeal or otherwise."

                    ""Fixed Charge  Coverage Ratio" shall mean, at any date, the
               ratio  of (a) (i)  Consolidated  Adjusted  EBITDA  for  the  most
               recently  completed four fiscal  quarters of the Holding  Company
               less (ii) the sum of (A) Consolidated  Capital  Expenditures made
               during  such  period  plus (B) the  aggregate  amount of federal,
               state, local and foreign income taxes paid by the Holding Company
               and  its  Subsidiaries  during  such  period  plus  (C)  for  any
               calculation  as of  any  date  before  the  Final  Decision,  the
               Quarterly  Provisional  Charges  for  Disputed  Royalty  expensed
               during such period to (b) the sum of (i) cash interest payable by
               the  Holding   Company  and  its   Subsidiaries  on  Consolidated
               Indebtedness  during such period,  plus (ii) cash rentals payable
               under Capital Leases during such period, plus (iii) the aggregate
               amount of  scheduled  principal  payments  made or required to be
               made in respect of Funded  Debt and  Current  Debt by the Holding
               Company and its Subsidiaries during such period excluding (A) the
               1999  Sale  Leaseback  Prepayment,  (B) the 2000  Sale  Leaseback
               Prepayment,  (C) mandatory  "excess cash flow"  prepayments under
               Section  2.06(b)(i) of the Bank Credit Agreement and (D) payments
               or  prepayments of Funded Debt and/or Current Debt under the Bank
               Credit Agreement with the Stock Sale Proceeds other than (and not
               excluding)  payments  scheduled to be due and payable during such
               period, if any (without the application of Section 2.06(b)(ii) of
               the  Bank   Credit   Agreement),   plus  (iv)  after  the  Proven
               Performance  Date,  the  aggregate  purchase  price  paid  by the
               Holding  Company  and its  Subsidiaries  during  such  period  to
               purchase Common Stock of the Holding Company."

                    ""1999 Sale Leaseback  Prepayment" shall mean the prepayment
               of  Funded  Debt  and/or  Current  Debt  under  the  Bank  Credit
               Agreement  pursuant to Section  2.06(b)(ii)  thereof by reason of
               the 1999  Sale  Leaseback  Transaction."

                                      -39-
<PAGE>

                    ""1999 Sale Leaseback  Transaction"  shall mean the sale and
               leaseback  transaction  of certain  facilities  of the  Operating
               Company  located in Eugene,  Oregon  pursuant to the Carey Letter
               Agreement  (as  defined  (and   consented  to)  in  that  certain
               Amendment  No. 4,  Consent and Waiver Under  Securities  Purchase
               Agreements dated March 1, 1999)."

                    ""Normalized  Quarterly  Provisional  Charges  for  Disputed
               Royalty"  shall mean,  for each fiscal  quarter,  severally,  (a)
               through  December  31, 1999,  the amount  listed on Schedule A to
               Amendment   No.  6  to  reflect  the   accounting   normalization
               attributable to each fiscal quarter of the Quarterly  Provisional
               Charges for Disputed  Royalty and (b) after December 31, 1999, an
               amount equal to the  Quarterly  Provisional  Charges for Disputed
               Royalty."

                    ""Percon  Acquisition"  shall have the meaning  specified in
               that certain Consent Under Securities  Purchase  Agreements dated
               January 19, 2000."

                    ""Proven  Performance  Date"  shall mean the last day of the
               first  fiscal  quarter (a) which is after the Final  Decision and
               (b) as of which the Companies  shall have been in full compliance
               with all terms of the Operative  Documents for not less than four
               consecutive fiscal quarters,  which compliance shall be supported
               by financial  statements  delivered pursuant to and in compliance
               with section 7."

                    ""Quarterly  Provisional Charges for Disputed Royalty" shall
               mean for each fiscal quarter, severally, the amount determined in
               accordance  with GAAP of the  non-cash  expense  appearing on the
               Holding  Company's  consolidated  statement  of  income  for such
               quarter as a charge to earnings  reflecting  the amount which may
               be payable in respect of such quarter's  earnings pursuant to the
               Disputed   Royalty   Decision   (exclusive   of  any   Undisputed
               Royalties)."

                    ""Total  Reserves for Disputed  Royalty"  shall mean, at any
               date, the amount  determined in accordance with GAAP appearing on
               the Holding Company's  consolidated balance sheet as of such date
               reflecting  the  amount  which  may be  payable  pursuant  to the
               Disputed Royalty Decision."

                                      -40-
<PAGE>

                    ""2000 Acquisition and Restructuring  Charge" shall mean the
               one-time  expense  determined in accordance  with GAAP charged to
               the Holding Company's  consolidated income statement in the first
               fiscal  quarter of 2000  relating to the Percon  Acquisition  and
               restructuring   incurred   by  the   Holding   Company   and  its
               Subsidiaries in an amount not exceeding $2,300,000."

                    ""2000 Sale Leaseback  Prepayment" shall mean any prepayment
               of  Funded  Debt  and/or  Current  Debt  under  the  Bank  Credit
               Agreement  pursuant to Section  2.06(b)(ii)  thereof by reason of
               the 2000 Sale Leaseback Transaction."

                    ""2000 Sale Leaseback  Transaction"  shall mean the proposed
               sale and  leaseback  transaction  of  certain  facilities  of the
               Operating Company located in Webster, New York; provided that the
               Required  Holders of the Notes shall have  consented (in writing)
               to the same."

                    ""Undisputed   Royalties"   shall   mean   all   liabilities
               determined in accordance with GAAP of the Holding Company and its
               Subsidiaries  to  Symbol  Technologies,  Inc.  or its  affiliates
               pursuant to and under the contracts  which are the subject of the
               Disputed  Royalty  Case  and  which  were not in  dispute  in the
               Disputed Royalty Case (i.e., the flat rate or 3% of the Net Sales
               Price of all Bar Code  Readers  sold  under the  "Spectra-Physics
               license"   as  such  term  is  used  in  the   Disputed   Royalty
               Decision)."; and

               (ii)  to  amend  the   definitions   of  "Adjusted   Consolidated
          Indebtedness  Ratio";  "Adjusted  EBITDA",  "Current Debt" and "Funded
          Debt" to read in their entireties as follows:

                    ""Adjusted  Consolidated  Indebtedness Ratio" shall mean, at
               any date, the ratio of (a) the sum of (i) the aggregate amount of
               Total  Reserves  for  Disputed  Royalty  and  (ii)   Consolidated
               Indebtedness  on the  last  day of the  most  recently  completed
               fiscal quarter of the Holding Company (without double counting in
               the event that Consolidated Indebtedness shall include the amount
               payable  in  respect of the Final  Royalty  Decision)  to (b) (i)

                                      -41-
<PAGE>

               Consolidated Adjusted EBITDA for the most recently completed four
               fiscal quarters of the Holding  Company,  plus (ii) the Quarterly
               Provisional  Charges for Disputed  Royalty  expensed  during each
               fiscal quarter in such four fiscal quarter period, less (iii) the
               Normalized Quarterly  Provisional Charges for Disputed Royalty in
               respect of such four fiscal  quarter  period,  provided that, for
               purposes solely of calculating  Consolidated  Indebtedness on any
               day, the Working Capital  Advances (as defined in the Bank Credit
               Agreement)  shall be deemed  to be  outstanding  in an  aggregate
               principal  amount equal to the average  principal  amount thereof
               outstanding  on the then  two  most  recent  fiscal  quarter  end
               dates."

                    ""Adjusted EBITDA" of any Person shall mean, for any period,
               (a) the Net Income of such Person for such  period,  plus (i) the
               2000 Acquisition and Restructuring Charge (which is taken only in
               the first fiscal quarter in 2000),  less (ii) that portion of the
               2000  Acquisition and  Restructuring  Charge actually paid within
               such  period,  less (iii) any gain arising from a reversal of the
               2000  Acquisition and  Restructuring  Charge and less (iv) on the
               fiscal  quarter end date of December 31, 2000, the balance of the
               2000  Acquisition  and  Restructuring  Charge  which the  Holding
               Company  and/or  any of its  Subsidiaries  has not  paid in cash,
               after  restoring   thereto  amounts  deducted  for  (b)  Interest
               Charges,  (c) taxes in  respect of income  and  profits,  and (d)
               amortization  and  depreciation,   in  each  case  determined  in
               accordance with GAAP, less, however, the Excluded Leaseback Gain,
               if any, accruing during such period, and plus the loss on sale of
               assets,  if any,  incurred as a result of the 2000 Sale Leaseback
               Transaction;  provided  that if the  period  for  which  Adjusted
               EBITDA  is  being  computed  includes  any or  all of the  fiscal
               quarters  ending  on or about  March  31,  1999,  June 30,  1999,
               September 30, 1999 and December 31, 1999,  Adjusted  EBITDA shall
               be calculated by using the Pro Forma Adjusted EBITDA as set forth
               on Schedule B to Amendment No. 6 for each such fiscal  quarter in
               such period."

                    ""Current  Debt" of any  Person  shall  mean,  at any  date,
               without  duplication,  (a) all Indebtedness for borrowed money or
               in respect of Capital  Leases or the deferred  purchase  price of
               property (including, without limitation, Indebtedness of the kind

                                      -42-
<PAGE>

               referred to in clauses (b), (c), (d) and (e) of the definition of
               Indebtedness,  but excluding  operating  leases),  whether or not
               interest  bearing,  of such Person at such date which  would,  in
               accordance with GAAP, be classified as short-term Indebtedness at
               such date, but specifically  excluding the current  maturities of
               such Person's  Funded Debt,  (b) all Guarantees by such Person at
               such date of Current Debt of others and (c) the aggregate  amount
               which is due on or before  the  expiration  of one year from such
               date in respect of any Redeemable Shares of such Person; provided
               that for purposes of section 14.5 of this Agreement, Current Debt
               shall not include amounts payable to George A. Plesko pursuant to
               and in accordance with the GEO/GAP Term Sheet; provided, further,
               that for all  purposes  Current  Debt shall not  include  amounts
               which may be payable  pursuant to the Disputed  Royalty  Decision
               until it becomes a Final Decision (and then such amount shall not
               be double counted as Current Debt)."

                    ""Funded  Debt"  of any  Person  shall  mean,  at any  date,
               without  duplication,  (a) all Indebtedness for borrowed money or
               in respect of Capital  Leases or the deferred  purchase  price of
               property (including, without limitation, Indebtedness of the kind
               referred to in clauses (b), (c), (d) and (e) of the definition of
               Indebtedness,  but excluding  operating  leases),  whether or not
               interest-bearing,  of such Person which would, in accordance with
               GAAP, be classified as long-term  Indebtedness  at such date, but
               in any event including all such Indebtedness,  whether secured or
               unsecured,  of such Person which  matures (or which,  pursuant to
               the  terms of a  revolving  credit  agreement  or  otherwise,  is
               directly or  indirectly  renewable or extendible at the option of
               such  Person  for a period  ending)  more than one year after the
               date of the  creation  thereof,  notwithstanding  the  fact  that
               payments in respect thereof (whether installment, serial maturity
               or sinking fund payments or otherwise) are required to be made by
               such Person not more than one year after the date as of which the
               amount of Funded Debt is being determined,  other than any amount
               thereof  which is at the time  included  in Current  Debt of such
               Person,  (b) all Guarantees by such Person at such date of Funded
               Debt of others  and (c) the  aggregate  amount  which is due more
               than one year from such date in respect of any Redeemable  Shares

                                      -43-
<PAGE>

               of such  Person;  provided  that for  purposes of section 14.5 of
               this Agreement,  Funded Debt shall not include amounts payable to
               George A. Plesko  pursuant to and in accordance  with the GEO/GAP
               Term Sheet; provided,  further, that for all purposes Funded Debt
               shall not include  amounts  which may be payable  pursuant to the
               Disputed  Royalty Decision until it becomes a Final Decision (and
               then such amount shall not be double counted as Funded Debt)."

     3.   Amendment to the Notes to Increase Interest Rate. Each of the Notes is
hereby  amended  to  provide  that the rate of  interest  applicable  thereto is
increased  from  11.25%  per annum to 12% per  annum  (and the  default  rate of
interest is increased from 13.25% per annum to 14% per annum).  Upon the request
of any holder of Notes,  the Operating  Company shall deliver to such holder new
Notes in  exchange  for those  held by such  holder to  reflect  the  foregoing.
Exhibit 1(a)(i) to the Securities Purchase Agreements is hereby amended to be in
the form of Exhibit 3 attached hereto.

     4. Amendment to the Warrants to Reduce Exercise Price. Each of the Warrants
is hereby  amended to provide  that the Exercise  Price  thereof is reduced from
$8.00 (the amount to which it was previously  reduced (pursuant to Amendment No.
3 to  Securities  Purchase  Agreements  and  Warrants)) to $5.25 per share (such
Exercise Price being subject to further adjustment as provided in the Warrants).
The  Holding  Company  hereby  certifies  that since July 12,  1996 no event has
occurred which,  under the terms of the Warrants,  requires an adjustment to the
Exercise  Price or to the number or kind of  securities  issuable  upon exercise
thereof.  Upon the request of any holder of Warrants,  the Holding Company shall
deliver to such holder new Warrants in exchange for those held by such holder to
reflect the  foregoing.  Exhibit 1(b) to the Securities  Purchase  Agreements is
hereby amended to be in the form of Exhibit 4 attached hereto.

     5.   Consents and Waivers.

          (a) Each of you  hereby  acknowledges  that  section  14.16(c)  of the
     Securities  Purchase  Agreements  permits the  amendment of the Bank Credit
     Agreement as provided for in that  certain  Amendment  Nine and Consent and
     Waiver to Credit  Agreement  dated as of March 31, 2000,  among the Holding
     Company, the Operating Company,  the financial  institutions party thereto,
     Fleet  National Bank  (formerly  known as Fleet Bank),  as Initial  Issuing
     Bank, and Fleet National Bank, as  administrative  agent,  substantially in
     the form attached hereto as Exhibit 5(a).

          (b) Nothing herein shall  constitute a consent of any holder of any of
     the Notes to the consummation of the "2000 Sale Leaseback Transaction".

                                      -44-
<PAGE>

     6.   Conditions Precedent to  Effectiveness.  The provisions of this Letter
Agreement  shall be effective as of the date first  specified above at such time
as each of the following conditions shall have been fulfilled:

          (a) the Companies shall have paid in immediately available funds:

               (i) an amendment  fee to the holders of the Notes in an aggregate
          amount equal to $150,000,  which amount shall be allocated and paid to
          each such holder in proportion to the  aggregate  principal  amount of
          Notes held by such holder; and

               (ii) without  limiting the  generality  of section 8 hereof,  the
          fees and  expenses  of  special  counsel  to the  holders of the Notes
          incurred in connection herewith; and

          (b) the Companies  shall have  delivered an executed copy of Amendment
     Nine and Consent and Waiver to Credit Agreement.

     7.   No Default, Representations and Warranties, etc.

          (a) The  Companies  represent  and warrant  that,  except as otherwise
     modified by:

               (i) the documents referred to in section 5(a)(i) of Amendment No.
          3 to  Securities  Purchase  Agreements  and Warrants  dated August 18,
          1997;

               (ii)  the  projections  referred  to on  Exhibit  B  attached  to
          Amendment No. 2 and Waivers under Securities Purchase Agreements dated
          as of July 4, 1997;

               (iii) the  information  delivered to the  Purchasers  on June 11,
          1997,  which  is  attached  to  Amendment  No.  2  and  Waivers  Under
          Securities Purchase Agreements dated as of July 4, 1997 as Exhibit C;

               (iv) the documents referred to in Section 3(a)(iv) of Consent and
          Waiver  Under  Securities   Purchase  Agreements  and  Warrants  dated
          December 29, 1997;

               (v) the documents referred to in section 4(a)(v) of Amendment No.
          4, Consent and Waiver under Securities Purchase Agreements;

               (vi) the  documents  referred  to in section  3(a)(vi) of Consent
          Under Securities Purchase Agreements dated January 19, 2000; and

                                      -45-
<PAGE>

               (vii) the following  documents  filed by the Holding Company with
          the Commission  under the Exchange Act: (A) Form 8-K filed on December
          22,  1999,  (B) Form 8-K filed on  February 2, 2000 and (C) Form 8-K/A
          filed on April 3, 2000

     (true,  correct  and  complete  copies  of all of  which  items  have  been
     furnished to you),  the  representations  and  warranties  contained in the
     Securities Purchase Agreements and the other Operative Documents are in all
     material  respects  correct on and as of the date hereof as if made on such
     date (except to the extent  affected by the  consummation  of  transactions
     permitted by the Securities  Purchase  Agreements).  The Companies  further
     represent and warrant that,  after giving effect to the  provisions of this
     Letter Agreement, no Default or Event of Default exists.

          (b) The  Companies  each ratify and confirm  the  Securities  Purchase
     Agreements  and each of the other  Operative  Documents  to which each is a
     party and agree that each such  agreement,  document and  instrument  is in
     full  force and  effect,  that its  obligations  thereunder  and under this
     Letter Agreement are its legal, valid and binding  obligations  enforceable
     against it in accordance  with the terms thereof and hereof and that it has
     no defense,  whether  legal or  equitable,  setoff or  counterclaim  to the
     payment and performance of such obligations.

          (c) The  Companies  agree that (i) if any default shall be made in the
     performance or observance of any covenant, agreement or condition contained
     in this  Letter  Agreement  or in any  agreement,  document  or  instrument
     executed  in  connection  herewith  or  pursuant  hereto  or  (ii)  if  any
     representation  or warranty made by the  Companies  herein or therein shall
     prove to have been false or  incorrect  on the date as of which  made,  the
     same shall  constitute  an Event of Default under the  Securities  Purchase
     Agreements and the other  Operative  Documents and, in such event,  you and
     each other  holder of any of the Notes  shall have all rights and  remedies
     provided by law and/or  provided or referred to in the Securities  Purchase
     Agreements and the other Operative  Documents.  The Companies further agree
     that this Letter  Agreement  is an Operative  Document  and all  references
     thereto in the Securities Purchase Agreements and in any other of the other
     Operative Documents shall include this Letter Agreement.

          (d) On December 31, 1997, each of Lazerdata Holdings,  Inc., PSC S.A.,
     Inc. and PSC Scanning Systems, Inc. was merged into the Holding Company.

     8. Payment of  Transaction  Costs.  The Companies  shall pay all reasonable
fees  and  disbursements  incurred  by you in  connection  herewith,  including,
without  limitation,  the reasonable  fees,  expenses and  disbursements of your
special counsel.

                                      -46-
<PAGE>

     9. Governing Law. This Letter Agreement,  including the validity hereof and
the rights and  obligations  of the parties  hereunder,  shall be  construed  in
accordance  with and governed by the domestic  substantive  laws of the State of
New  York  without  giving  effect  to any  choice  of law or  conflicts  of law
provision or rule that would cause the  application of the domestic  substantive
laws of any other jurisdiction.

     10.  Miscellaneous.  The headings in this Letter Agreement are for purposes
of reference  only and shall not limit or otherwise  affect the meaning  hereof.
This Letter Agreement embodies the entire agreement and understanding  among the
parties hereto and supersedes all prior agreements and  understandings  relating
to the subject  matter  hereof.  In case any provision in this Letter  Agreement
shall  be  invalid,  illegal  or  unenforceable,   the  validity,  legality  and
enforceability  of the remaining  provisions shall not in any way be affected or
impaired  thereby.  This  Letter  Agreement  may be  executed  in any  number of
counterparts  and by the parties  hereto on separate  counterparts  but all such
counterparts shall together constitute but one and the same instrument.

            [The remainder of this page is intentionally left blank.]

                                      -47-
<PAGE>

     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement  on  the  accompanying   counterpart  hereof,  whereupon  this  Letter
Agreement shall become a binding  agreement under seal among the parties hereto.
Please then return one of such counterparts to the Companies.

                                     Very truly yours,

                                            PSC INC.

                                            By:
                                               ---------------------------------
                                                                         (Title)

                                            PSC SCANNING, INC.

                                            By:
                                               ---------------------------------
                                                                         (Title)

     Each of the  undersigned  (a)  acknowledges  and  assents  to the terms and
provisions of the foregoing  Letter Agreement and (b) ratifies and confirms each
of the  Operative  Documents  to which it is a party and  agrees  that each such
Operative Document is in full force and effect, that its obligations  thereunder
are  its  legal,  valid  and  binding  obligations  enforceable  against  it  in
accordance  with the terms thereof and that it has no defense,  whether legal or
equitable,  setoff or  counterclaim,  to the  payment  and  performance  of such
obligations.

                                            INSTAREAD CORPORATION

                                            By:
                                               ---------------------------------
                                                                         (Title)

                                            PSC AUTOMATION, INC. (formerly
                                            named Lazerdata Corporation)

                                            By:
                                               ---------------------------------
                                                                         (Title)

                                      -48-
<PAGE>

                                            GEO LABS, INC.

                                            By:
                                               ---------------------------------
                                                                         (Title)

                                            GAP TECHNOLOGIES, INC.

                                            By:
                                               ---------------------------------
                                                                         (Title)

                                            PERCON INCORPORATED

                                            By:
                                               ---------------------------------
                                                                         (Title)

            [The remainder of this page is intentionally left blank.]

                                      -49-
<PAGE>

The foregoing is hereby accepted and agreed to:

JOHN HANCOCK LIFE INSURANCE COMPANY
  (formerly John Hancock Mutual
  Life Insurance Company)

By:
   -----------------------------
                         (Title)

JOHN HANCOCK VARIABLE LIFE
  INSURANCE COMPANY

By:
   -----------------------------
                         (Title)

THE LINCOLN NATIONAL LIFE
   INSURANCE COMPANY

By:  Lincoln Investment Management, Inc.
     Its Attorney-in-Fact

     By:
        ------------------------
                         (Title)

LINCOLN NATIONAL INCOME FUND, INC.

By:
   -----------------------------
                         (Title)

SECURITY-CONNECTICUT LIFE
   INSURANCE COMPANY

By:
   -----------------------------
                         (Title)

                                      -50-
<PAGE>

THE EQUITABLE LIFE ASSURANCE
   SOCIETY OF THE UNITED STATES

By:
   -----------------------------
                         (Title)

                                      -51-
<PAGE>

                                                                      Schedule A

          Normalized Quarterly Provisional Charges for Disputed Royalty
          -------------------------------------------------------------
                                     (000's)

           Q1 1999          Q2 1999           Q3 1999          Q4 1999
          -------------------------------------------------------------

           $1,378           $1,121            $1,514           $1,753

                                      -52-
<PAGE>

                                                                      Schedule B

                                Pro Forma EBITDA
                                ----------------

                       PSC Inc./Percon, Inc. Consolidated
                                     (000's)

                        Q1 1999        Q2 1999          Q3 1999        Q4 1999
                        -------        -------          -------        -------

Net Income/(Loss)       $2,704         $ 4,245          $ 4,754        $ (546)
Interest Expense         2,101           1,878            1,770         1,709
Income Tax Expense       1,499           2,742            2,554          (160)
Depreciation Expense     1,719           1,731            1,877         1,881
Amortization Expense     1,887           1,858            1,868         1,682
                        -------        -------          -------        -------

EBITDA                  $9,910         $12,454          $12,823        $4,566
                        ======         =======          =======        =======

                                      -53-
<PAGE>

                                                                    Exhibit 5(a)
                                                                    ------------

           Amendment Nine and Consent and Waiver to Credit Agreement
           ---------------------------------------------------------

                                      -54-

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