Smith Corona Announces Stock Purchase Agreement With Pubco; Deal to Replace Prior Asset Purchase Agreement With Carolina Wholesale.

Business Editors

CORTLAND, N.Y.--(BUSINESS WIRE)--June 29, 2000

Smith Corona Corp. (OTC:SCCOE) today announced it has signed a stock purchase agreement with Pubco Corp. (Nasdaq:PUBO), a Cleveland-based manufacturer of thermal printers and thermal and impact printer supplies.

The agreement, which was an outcome of the overbid process approved as part of Smith Corona's Chapter 11 case, supplants a prior asset purchase agreement with Carolina Wholesale Office Machine Co., Inc., which would have allowed Carolina to purchase substantially all of the company's operating assets. The court today authorized Smith Corona to pursue the stock purchase agreement, which will be consummated through a plan of reorganization.

Under the stock purchase agreement with Pubco, Smith Corona would be reorganized under Chapter 11 and continue to exist as an ongoing entity. Upon completion of the Chapter 11 reorganization, Pubco would purchase 49 percent of the stock in the reorganized Smith Corona, with the remaining 51 percent of the new common stock to be issued to creditors and, if allowed, to stockholders.

Pubco's cost to purchase the new Smith Corona stock will be determined as a percentage of the value of inventories and receivables at the time of the closing of the agreement, which is anticipated to be by year-end. The agreement also calls for Smith Corona's current debtor-in-possession (DIP) financing line with Congress Financial Corp. to be either acquired or replaced by Pubco's Seaside Factors LLC subsidiary.

"The stock purchase agreement with Pubco provides more value to satisfy creditor claims than the Carolina Wholesale asset purchase deal," stated Martin D. Wilson, president and chief executive officer of Smith Corona.

"In addition, Smith Corona's business will continue to operate under the Smith Corona name with the opportunity to introduce products of the Pubco companies through the Smith Corona distribution channels."

Wilson further noted that, in the event that the company cannot obtain approval from its constituencies of the stock purchase plan, that Pubco has agreed to convert its stock purchase to an asset purchase.

The current Smith Corona product line includes seven models of electronic typewriters and supporting supplies and accessories. To augment the shrinking typewriter market, the company introduced a number of new office products including inkjet replacement cartridges and commercial headsets.

Certain matters discussed in this news release constitute forward looking statements which are estimates by the company's management of future performance and are subject to a variety of risks and uncertainties that could cause results to differ from management's current expectations.