EXHIBIT 10.51
April 13, 2001
PSC Inc.
PSC Scanning, Inc.
000 Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx, President and
Chief Executive Officer
Xxxxxxxxx X. XxXxxxxx, 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superseded and replaced upon completion of documentation in connection with the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.
Please return executed counterparts of this letter agreement to Xxxxxxx X.
Xxxxxx and W. Xxxxxxxx Xxx at Xxxxxx, Xxxx & Xxxxxxx (fax no. 000-000-0000).
Very truly yours,
XXXX XXXXXXX LIFE INSURANCE COMPANY
(formerly Xxxx Xxxxxxx Mutual Life
Insurance Company)
By: _________________________
(Title)
XXXX XXXXXXX 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)
SECURITY-CONNECTICUT LIFE
INSURANCE COMPANY
By: _________________________
(Title)
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By: _________________________
(Title)
ACKNOWLEDGED AND AGREED
PSC INC.
By: __________________________
PSC SCANNING, INC.
By: __________________________
PSC AUTOMATION, INC.
By: __________________________
INSTAREAD CORPORATION
By: __________________________
PERCON INCORPORATED
By: __________________________
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,
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.
