December 3, 1996 Mr. John F. O'Brien PSC Inc. 959 Terry Street Eugene, Oregon 97402 Dear John: This letter is to confirm and outline the consulting agreement between PSC and yourself. The arrangements discussed are as follows: The consulting agreement...

December 3, 1996

Xx. Xxxx X. X'Xxxxx
PSC Inc.
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxx  00000

Dear Xxxx:

This letter is to confirm and outline the consulting  agreement  between PSC and
yourself. The arrangements discussed are as follows:

      The consulting  agreement will be for a maximum of 20 hours per month. Any
      hours in excess will be discussed in advance.  The  consulting fee will be
      $5,000 per month. Any additional  consulting fees will be negotiated.  The
      term of the agreement will be for six months.  Any additional need will be
      discussed  at the  end of the  term.  The  consulting  agreement  will  be
      predominately for business issues with members of the management team.

I believe this sums up our  conversation.  If this is satisfactory,  please sign
and date below.

I'm pleased you're willing to continue on a consulting basis. I think this is in
the best interest of everyone involved.

Warmest regards,
/s/ L. Xxxxxxx Xxxx
L. Xxxxxxx Xxxx
Chief Executive Officer
and Chairman

I agree to the above terms.

_/s/ Xxxx X. X'Xxxxx__________________
Xxxx X. X'Xxxxx                     Date