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VIDEOCART TO REALIZE $20 MILLION GAIN FROM AGREEMENT ON IBM DEBT RESTRUCTURING

 CHICAGO, April 26 /PRNewswire/ -- VideOcart, Inc. (NASDAQ: VCRTC) announced today that it has reached an agreement to restructure an existing $42 million debt held by the IBM Corp. Under terms of the agreement, a $22 million debt would replace the existing debt, giving VideOcart a one-time balance sheet gain of $20 million. The terms of the new agreement include waiving all principal and interest payments until July 31, 1993.
 In addition, VideOcart retains its rights under a previous agreement with IBM that allows early extinguishment of the new $22 million debt at any time for a $17 million cash payment.
 VideOcart's Chairman and CEO, Ronald E. Spears, emphasized, "As significant as the debt reduction is the substantial relief from near- term payment obligations." Spears added, "We can now proceed with all our plans to attain our near-term business goals which will continue to reinforce the viability of our business model."
 James E. Hurley, VideOcart's chief financial officer, said "This new agreement provides VideOcart with both balance sheet enhancements and cash flow improvement. With this new agreement and the recent placement of $15.0 million of Series C Preferred shares (completed in February, 1993) our capital stock and surplus on a 1992 year-end pro-forma basis increases from a negative $8.1 million to a positive $26.8 million."
 Hurley pointed out that the transaction was less than 1 percent dilutive to existing shareholders. As part of the debt restructuring, VideOcart has agreed to cancel a warrant granted last year to IBM for the purchase of 540,000 of VideOcart shares and grants a new warrant for the purchase of 600,000 shares at the VideOcart stock closing price of $1.75 on April 21, 1993.
 Hurley summarized the restructuring agreement containing the following five components:
 -- The present $42 million debt to IBM, originally due by September 1996, has been reduced to a debt of $22 million due by Dec. 31, 1996.
 -- VideOcart still has the option to extinguish the debt with IBM for a one-time cash payment of $17 million at any time during the term of the agreement.
 -- All principal and interest payments under the new agreement are waived from April 1, 1993, through July 31, 1993. From Aug. 31, 1993, through Dec. 31, 1993, interest only payments will be due.
 -- Payments of $500,000 per month, will become due beginning Jan. 31, 1994, and will continue for 35 months. A balloon payment will be due on Dec. 31, 1996. IBM can elect to convert the balance of the debt into VideOcart common shares at $8 per share on that date.
 -- VideOcart is granting to IBM a warrant for 600,000 shares as a replacement for an earlier warrant of 540,000 shares.
 VideOcart is a micro-marketing company which installs and maintains a communication network consisting of programmable and targetable digital communications to video displays affixed to grocery shopping carts. This communications network, now installed in supermarkets across the country, allows consumer product goods manufacturers to reach consumers at the exact aisle location of the brand being advertised or promoted with a flexible video message.
 -0- 4/26/93
 /CONTACT: Mark Prior, investor relations of VideOcart,


312-987-5000; or Kathy Riemer of IBM, 312-245-7995/
 (VCRTC)


CO: VideOcart, Inc. ST: Illinois IN: CPR SU:

TS -- NY050 -- 0597 04/26/93 10:56 EDT
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:Apr 26, 1993
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