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-