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                                                                   EXHIBIT 10.51

                                           April 13, 2001


PSC Inc.
PSC Scanning, Inc.
675 Basket Road
Webster, New York 14580-9787
Attention: Edward Borey, President and
           Chief Executive Officer
           Elizabeth J. McDonald, Vice President and
           Corporate Counsel

       Re:   PSC Scanning, Inc.


Ladies and Gentlemen:

      Reference is hereby made to the Securities Purchase Agreements dated July
12, 1996 (as amended, modified and supplemented, the "Securities Purchase
Agreements") by and among PSC Inc. (the "Holding Company"), PSC Scanning, Inc.
(the "Operating Company") and the institutional investors named therein.
Capitalized terms used but not defined herein shall be given the meanings
accorded to such terms in the Securities Purchase Agreements.

      Attached hereto as Annex 1 is a term sheet (the "Term Sheet") setting
forth our agreement on the terms of an amendment to or amendment and restatement
of the Securities Purchase Agreements. The parties hereto agree to promptly
prepare all documentation required in connection with such amendment or
amendment and restatement. Such documentation will not contain any economic
terms with respect to principal, interest, fees or financial covenants more
restrictive terms than those set forth in the Term Sheet. The holders of the
Notes hereby waive the Events of Default waived by them pursuant to the Consent
and Waiver Under Securities Purchase Agreements dated as of March 31, 2001
pending completion of final documentation. This letter agreement shall be
superseded and replaced upon completion of documentation in connection with the
amendment or amendment and restatement of the Securities Purchase Agreements
referred to above.

      By each party's signature below, each such party acknowledges that it is
duly authorized to approve the Term Sheet and agrees that the terms of the
Securities Purchase Agreements shall be deemed to be modified effective as of
the date hereof as set forth in the Term Sheet.
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      Please return executed counterparts of this letter agreement to Charles L.
Glerum and W. Brewster Lee at Choate, Hall & Stewart (fax no. 617-248-4000).


                                           Very truly yours,

                                           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:   Delaware Lincoln Investment
                                                 Advisers, a series of Delaware
                                                 Management Business Trust,
                                                 Attorney-in-Fact


                                                 By: ___________________
                                                                 (Title)


                                           LINCOLN NATIONAL INCOME FUND,
                                           INC.


                                           By: _________________________
                                                                 (Title)
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                                           SECURITY-CONNECTICUT LIFE
                                           INSURANCE COMPANY


                                           By: _________________________
                                                                 (Title)


                                           THE EQUITABLE LIFE ASSURANCE
                                           SOCIETY OF THE UNITED STATES


                                           By: _________________________
                                                                 (Title)
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ACKNOWLEDGED AND AGREED


PSC INC.


By: __________________________


PSC SCANNING, INC.


By: __________________________


PSC AUTOMATION, INC.


By: __________________________


INSTAREAD CORPORATION


By: __________________________


PERCON INCORPORATED


By: __________________________
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                                                                         Annex 1


                         Summary of Terms and Conditions

1.    Except as noted herein, all terms of the Securities Purchase Agreements
      and the other Operative Documents will remain in effect.

2.    At the time of the execution of the amendment and/or restatement of the
      Securities Purchase Agreements, the Bank Credit Agreement will be amended
      or amended and restated (as so changed, the "New Bank Agreement") in
      accordance with the term sheet for the same attached hereto (the "Bank
      Term Sheet"), and the New Bank Agreement (and all other related
      agreements, documents and instruments) will not contain any economic terms
      with respect to principal, interest, fees or financial covenants more
      restrictive than those set forth in the Bank Term Sheet.

3.    In lieu of complying with the financial covenants set forth in section
      14.7 of the Securities Purchase Agreements, the Companies will comply with
      the financial covenants set forth in the New Bank Agreement.

4.    The Exercise Price for the Warrants (currently exercisable for 975,000
      shares of the Holding Company's Common Stock) will be reduced to the
      average per share market price prevailing on the 15 trading days
      immediately prior to the execution of the amendment and/or restatement.

5.    The Companies will pay on a pro rata basis to the holders of the Notes an
      amount (which is fully earned as of the date hereof) equal to the product
      of (a) the average prevailing per share market price of the Holding
      Company's Common Stock on the 15 trading days immediately prior to April
      2, 2002 (or, at the option of the holders of the Notes, April 2, 2003)
      less $1.00 times (b) 500,000, provided that the maximum amount of such
      payment shall be $1,500,000. Such payment shall be made in three equal
      sequential installments 30, 90 and 150 days after April 2, 2002 or April
      2, 2003, as applicable. The holders of the Notes acknowledge that the
      foregoing amount is "Subordinated Indebtedness" as defined in the
      Securities Purchase Agreements and is subject to the limitations set forth
      in section 10 of the Securities Purchase Agreements.

6.    All interest accrued on the Notes from September 30, 2000 will be paid on
      April 2, 2002.

7.    The $75,000 Special Waiver Fee (which is fully earned as of the date
      hereof) required under "Amended and Restated Amendment No. 7 and Consent
      and Waiver under Securities Purchase Agreements" will be paid on April 2,
      2002.

8.    The Companies will pay at the time of the execution of the amendment
      and/or restatement of the Securities Purchase Agreements $150,000 as an
      advance against out-of-pocket expenses of the Noteholders, including legal
      fees, incurred after March 31,
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      2001 and before March 31, 2002 (and any unspent amount from the previous
      $100,000 advance would be credited against this second advance
      requirement).

      Capitalized terms used but not defined herein shall be given the meanings
accorded to such terms in the Securities Purchase Agreements.