Amendment Two and Waiver
to Credit Agreement
THIS AMENDMENT TWO AND WAIVER is dated as of July 4, 1997 and is made in respect
of the Credit Agreement dated as of July 12, 1996 and as amended and in effect
immediately prior to the date hereof (the "Credit Agreemtn") by and among PSC
SCANNING INC., a Delaware corporation formerly known as SpectraScan, Inc., which
is successor by merger to PSC Acquisition, Inc., (the "Borrower"), PSC Inc.
("PSC"), the financial institutions party to the Credit Agreement (the "Lender
Parties"), FLEET BANK as the "Initial Issuing Bank", and FLEET 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 previously entered into the Credit Agreement and the First
Amendment to Credit Agreement dated as of September 27, 1996. The Borrower has
requeted that the Lender Parties amend a certain definition and corresponding
schedule to the Credit Agreement and waiver noncompliance by the Borrower with
certain covenants in the Credit Agreement. The Lender Parties are willing to do
so upon certain contingencies.
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 April 1, 1997, upon the satisfaction of all
conditions set forth in Section 4 hereof, Schedule 4.01 (hh) is amended by
deleting therefrom the reference to the Employment Agreement between L. Michael
Hone dated September 14, 1995; and "Material Contract" as defined in Section
1.01 of the Credit Agreement shall be deemed not to include the Severance
Agreement dated April 30, 1997 between PSC and L. Michael Hone or any ancillary
agreement or instrument pertaining to the resignation of L. Michael Hone from
eployment with PSC and all of its subsidiaries and other affiliates
(collectively with PSC, the "Companies") and his positions and offices as
Chairman, Chief Executive Officer, President and as a member of the Board of
Directors of PSC as well as all other positions, offices and directorships with
any of the Companies.
3. Waiver. Upon the satisfaction of all conditions set forth in Section 4
hereof, the Lender Parties hereby waive any and all noncompliance by PSC with
Subsections (a), (b), (c) and (d) of Section 5.04 of the Credit Agreement
computed as at the fiscal quarter end-date of July 4, 1997 (and only in respect
of compliance required or computed as at such fiscal quarter end-date) and any
and all noncompliance by PSC with Subsection (e) of Section 5.04 of the Credit
Agreement through August 15, 1997, together with the right to deem any such
noncompliance within the description of the foregoing waiver as an "Event of
Default" pursuant to Section 6.01 of the Credit Agreement or a failure of a
condition precedent pursuant to Section 3.02 of the Credit Agreement.
4. Conditions Precent to Effectiveness. This Amendment Two and Waiver shall not
become effective unless and until: (a) the holders of the Subordinated Debt
shall have entered into an amendment or waiver in substantially the form of
Exhibit A annexed hereto; and (b) 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 Commitment of each Lender Party, a fee equal to one-sixteenth of one percent
of the total amount of the Commitment.
5. Effect on the Credit Agreement. Except as specifically amended and waived
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 counter claim to the
payment and performance of such Obligations.
6. 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 reimbursements of counsel to each of
the Lender Parties and the Agent) incident to the preparation, negotiation,
execution, administration and enforcement of this Amendment Two and Waiver and
all documents and transactions required in connection with this Amendment Two
and Waiver.
7. Execution in Counterparts and Effectiveness. This Amendment Two and Waiver
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 Two and Waiver, 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 Two and Waiver by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement. This Amendment Two and Waiver will become effective (subject to the
conditions precedent set forth in Section 4 above) when the Administrative Agent
shall have received counterparts of this Amendment Two and Waiver which, hwen
taken together, bear the signatures of the Borrower, PSC, the Administrative
Agent and the Required Lenders.
8. Applicable Law. Pursuant to Section 5-1401 of the New York General
Obligationis Law, the laws of the State of New York shall govern the validity,
construction, enforcement and interpretation of this Amendment Two and Waiver in
whole without regard to any rules of conflicts-of-laws that would require the
application of the laws of any jurisdiction other than the State of New York.
9. Headings. The headings of this Amendment Two and Waiver are for the purposes
of reference only and shall not limit or otherwise affect the meanings hereof.
IN WITNESS WHEREOF, the parties hereto have caused a counterpart of this
Amendment Two and Waiver to be executed and delivered by their respect
representatives thereunto duly authorized, as of the date first above written.
PSC Inc. PSC SCANNING, INC.
Vice President,Finance Vice President & Chief
and Treasurer Financial Officer
FLEET BANK, as Initial Issuing Bank FLEET BANK, as Admin. Agent
Acting Vice President Acting Vice President
FLEET BANK CORESTATES BANK, N.A.
Acting Vice President Senior Vice President
MANUFACTURERS & TRADERS KEY BANK NATIONAL
TRUST COMPANY ASSOCIATION
Regional Senior VP Vice President
PILGRIM AMERICA PRIME RATE
SUMITOMO TRUST
Vice President, NY Office Vice President