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                                 UNIDIGITAL INC.
                              and its Subsidiaries





          $20,000,000 14% Senior Subordinated Notes due August 31, 2006
                     of Unidigital Inc. and its Subsidiaries

             Warrants for 690,134 shares (subject to adjustment) of
                Common Stock, $.01 par value, of Unidigital Inc.







                                 --------------

                          SECURITIES PURCHASE AGREEMENT

                                 --------------


                               September 14, 1999



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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

1.   Authorization of Securities; etc..........................................1

2.   Sale and Purchase of Securities...........................................2

3.   Closing...................................................................2

4.   Conditions to Closing.....................................................3

     4.1.   Representations and Warranties Correct.............................3
     4.2.   Performance; No Default............................................3
     4.3.   Related Transactions...............................................3
     4.4.   Compliance Certificate.............................................3
     4.5.   Sale of Securities to Other Purchasers.............................4
     4.6.   Opinion of Counsel for the Companies...............................4
     4.7.   Opinion of Choate, Hall & Stewart..................................4
     4.8.   Certain Additional Documents to be Delivered at or Prior to the
            Closing............................................................4
     4.9.   Payment of Transactions Costs......................................4
     4.10.  Legal Investment; Certificate......................................4
     4.11.  Sale and Purchase Not Forbidden by Law.............................4
     4.12.  Proceedings and Documents..........................................4
     4.13.  Joint and Several Obligations, etc.................................5

5.   Representations and Warranties............................................5

     5.1.   Organization, Standing, etc. of the Holding Company................5
     5.2.   Names; Jurisdictions of Incorporation; Subsidiaries................5
     5.3.   Qualification......................................................5
     5.4.   Business, etc......................................................6
     5.5.   Shares; Shareholders...............................................6
     5.6.   Financial Statements...............................................7
     5.7.   Changes; Solvency, etc.............................................8
     5.8.   Tax Returns and Payments...........................................8
     5.9.   Debt, Liens, Investments and Transactions with Affiliates;
            Derivative Transactions; Material Agreements.......................9
     5.10.  Title to Properties; Liens; Leases.................................9
     5.11.  Litigation, etc...................................................10
     5.12.  Valid and Binding Obligations; Compliance with Other
            Instruments, Borrowing Restrictions, etc..........................10
     5.13.  ERISA and Other Employee Benefit Matters..........................11
     5.14.  Consents, etc.....................................................13
     5.15.  Proprietary Rights; Licenses......................................13

                                      (i)
<PAGE>

     5.16.  Offer of Securities; Investment Bankers...........................14
     5.17.  Government Regulation.............................................14
     5.18.  Labor Relations; Suppliers, Distributors and Customers............14
     5.19.  Year 2000 Compliance..............................................14
     5.20.  Disclosure........................................................14

6.   Use of Proceeds..........................................................15

7.   Financial Statements and Information.....................................15

8.   Inspection; Confidentiality..............................................20

9.   Prepayment of Notes......................................................21

     9.1.   Required Prepayment Without Premium of Notes......................21
     9.2.   Optional Prepayment Without Premium of Notes From Proceeds of
            Public Offering...................................................21
     9.3.   Optional Prepayment With Premium of Notes.........................21
     9.4.   Prepayment Without Premium of the Notes at the Option of
            Holders of the Notes upon a Change of Control.....................22
     9.5.   Allocation of Partial Prepayments of Notes........................22
     9.6.   Notice of Optional Prepayments of Notes...........................22
     9.7.   Maturity; Accrued Interest; Surrender, etc. of Notes..............23
     9.8.   Purchase of Notes.................................................23
     9.9.   Payment on Non-Business Days......................................23
     9.10.  Application of Notes in Satisfaction of Exercise Price of
            Warrants..........................................................23

10.  Subordination of Notes...................................................23

11.  Registration and Co-Sale Rights, Drag-Along Obligations, etc.............23

12.  Put and Call Rights......................................................24

     12.1.  Put Rights with Respect to Warrants and Warrant Shares............24
     12.2.  Call Rights with Respect to the Warrants..........................25
     12.3.  Closing...........................................................26
     12.4.  No Waivers, etc...................................................27

13.  Board Visitation Rights..................................................27

14.  Covenants of the Holding Company.........................................27

     14.1.  Books of Record and Account; Reserves.............................28
     14.2.  Payment of Taxes; Existence; Maintenance of Properties;
            Compliance with Laws; Lines of Business; Proprietary Rights.......28
     14.3.  Insurance.........................................................28

                                      (ii)
<PAGE>

     14.5.  Limitation on Debt................................................29
     14.6.  Limitation on Restricted Payments and Restricted Investments......30
     14.7.  Fixed Coverage Ratio..............................................31
     14.8.  Limitation on Tax Consolidation...................................32
     14.9.  Limitation on Liens...............................................32
     14.10. Limitation on Transactions with Affiliates........................32
     14.11. Joinder of Additional Subsidiaries................................32
     14.12. Limitation on Issuance and Sale of Shares of Subsidiaries;
            No Preferred Shares...............................................33
     14.13. Limitation on Subsidiary's Consolidation or Merger................33
     14.14  Limitation on the Holding Company's Consolidation and Merger......33
     14.15. Limitation on Disposition of Property.............................34
     14.16. Modification of Certain Documents, Agreements and Instruments;
            Fiscal Year End...................................................35
     14.17. Further Assurances................................................35

15.  Definitions..............................................................36

     15.1.  Definitions of Capitalized Terms..................................36
     15.2.  Other Definitions.................................................51
     15.3.  Accounting Terms and Principles; Laws.............................52

16.  Remedies.................................................................52

     16.1.  Events of Default Defined; Acceleration of Maturity...............52
     16.2.  Suits for Enforcement, etc........................................57
     16.3.  Remedies Cumulative...............................................57
     16.4.  Remedies Not Waived...............................................57
     16.5.  Application of Payments...........................................58

17.  Registration, Transfer and Exchange of Securities........................58

18.  Replacement of Securities................................................58

19.  Amendment and Waiver.....................................................58

20.  Method of Payment of Securities..........................................59

21.  Expenses; Indemnity......................................................60

22.  Charges; Foreign Currency; Taxes.........................................60

23.  Communications...........................................................61

24.  Survival of Agreements, Representations and Warranties, etc..............62

                                      (iii)
<PAGE>

25.  Successors and Assigns; Rights of Other Holders..........................63

26.  Purchase for Investment; Source of Funds.................................63

27.  Governing Law; Jurisdiction; Waiver of Jury Trial........................65

28.  Rules 144 and 144A.......................................................65

29.  Miscellaneous............................................................65


Schedule I          Purchaser Information

Exhibit 1(a)        Form of Note
Exhibit 1(b)        Form of Warrant
Exhibit 4.3(c)      Form of Registration Rights Agreement
Exhibit 4.6         Opinion of Buchanan Ingersoll Professional Corporation
Exhibit 4.7         Opinion of Choate, Hall & Stewart
Exhibit 4.8         Additional Documents to be Delivered at or Prior to the
                    Closing
Exhibit 5.2         Names; Jurisdictions of Incorporation; Subsidiaries
Exhibit 5.5(a)      Shares; Shareholders
Exhibit 5.5(b)      Other Securities; Commitments; Preemptive and Registration
                    Rights
Exhibit 5.7         Restricted Payments and Restricted Investments
Exhibit 5.8         Tax Returns and Payments
Exhibit 5.9         Debt, Liens, Investments, Transactions with Affiliates,
                    Derivative Transactions and Material Agreements
Exhibit 5.10        Title to Properties; Liens; Leases
Exhibit 5.11        Litigation, etc.
Exhibit 5.14        Consents
Exhibit 6           Use of Proceeds
Exhibit 7(c)(v)     Information as to New Subsidiaries

                                      (iv)
<PAGE>

                                 UNIDIGITAL INC.
                              229 West 28th Street
                            New York, New York 10001


                                                              September 14, 1999


To the Purchasers named
on Schedule I attached hereto
   ----------

Ladies and Gentlemen:

     UNIDIGITAL   INC.,  a  Delaware   corporation   (the  "Holding   Company"),
LINOGRAPHICS CORPORATION, a New York corporation ("Linographics"), ELEMENTS (UK)
LIMITED, a United Kingdom  corporation  ("Elements (UK)"),  UNIDIGITAL  ELEMENTS
(SF),  INC., a Delaware  corporation  ("Elements  (SF)"),  UNISON (NY),  INC., a
Delaware corporation ("Unison (NY)"),  UNISON (MA), INC., a Delaware corporation
("Unison  (MA)"),   MEGA  ART  CORP.,  a  New  York  corporation  ("Mega  Art"),
SUPERGRAPHICS  HOLDING  COMPANY,  INC., a Delaware  corporation  ("SuperGraphics
Holding"),     SUPERGRAPHICS     CORPORATION,     a    California    corporation
("SuperGraphics"),   REGENT  GROUP  LIMITED,   a  United   Kingdom   corporation
("Regent"),  and INTERFACE GRAPHICS LIMITED,  a corporation  organized under the
laws of Scotland  ("Interface"),  each a Wholly-Owned  Subsidiary of the Holding
Company (the Holding Company, Linographics, Elements (UK), Elements (SF), Unison
(NY), Unison (MA), Mega Art,  SuperGraphics Holding,  SuperGraphics,  Regent and
Interface  are  collectively  referred  to as  the  "Companies"  and  each  as a
"Company"), jointly and severally agree with you as follows. Certain capitalized
terms used herein are defined in section 15.

1.   Authorization of Securities; etc.
     ---------------------------------

          (a) The Companies  have  authorized the issue and sale of their Senior
     14% Subordinated Notes due August 31, 2006 (herein, together with any notes
     issued in exchange therefor or replacement thereof,  called the "Notes") in
     the  aggregate  principal  amount  of  $20,000,000.  The  Notes  are  to be
     substantially in the form of Exhibit 1(a) attached hereto; and
                                  ------------

          (b) The  Holding  Company  has  authorized  the  issue and sale of its
     warrants (herein, together with any warrants issued in exchange therefor or
     replacement thereof,  called the "Warrants")  evidencing rights to purchase
     in the aggregate  690,134  shares  (subject to adjustment) of Common Stock.
     The Warrants shall be exercisable during the Exercise Period (as defined in
     the

                                      -1-
<PAGE>


Warrants) for $5.425 per share (subject to  adjustment),  shall expire on August
31, 2006 and shall be substantially in the form of Exhibit 1(b) attached hereto.
                                                   ------------

          (c) Interest is payable on the Notes  semi-annually  in arrears on the
     last day of each February and August,  commencing February 29, 2000, and at
     maturity.  In no event  shall the  amount  paid or agreed to be paid by the
     Companies  as interest  and  premium on any Note exceed the highest  lawful
     rate permissible under any law applicable  thereto.  As further provided in
     the Notes,  in lieu of paying cash,  the  Companies  may elect from time to
     time to defer  payment of a portion of the interest  accrued  thereon until
     maturity (whether by acceleration,  declaration or otherwise) and to pay it
     together with interest accrued thereon at that time.

          (d) The  Securities are to be issued under this Agreement and separate
     Securities Purchase Agreements (the "Other Securities Purchase Agreements")
     identical  herewith (except as to the name and address of each of the other
     purchasers)  being entered into  concurrently by the Companies with each of
     the other purchasers (the "Other  Purchasers") named in Schedule I attached
                                                             ----------
     hereto. The issue of Securities to you and the issues of Securities to each
     of the Other  Purchasers  are  separate  transactions  and you shall not be
     liable or responsible for the acts or defaults of the Other Purchasers.

2.   Sale and  Purchase  of  Securities.  Subject  to the terms  and  conditions
     ----------------------------------
hereof,  the Companies will issue and sell to you and you will purchase from the
Companies,  at the Closing  specified in section 3, the Securities  specified on
that  portion  of  Schedule  I  attached  hereto as is  applicable  to you.  The
                   -----------
aggregate purchase price of the Notes and the Warrants shall be $20,000,000,  of
which  $19,000,000  shall be  allocated  to the  Notes and  $1,000,000  shall be
allocated to the Warrants.  The Companies and you agree that the values ascribed
to the Securities  (which values shall be used by the Companies and you, as well
as any subsequent holder of any of the Securities,  for all purposes,  including
the  preparation  of tax returns)  shall be determined  in  accordance  with the
foregoing.

3.   Closing.  The closing of the sale and purchase of the Securities  hereunder
     -------
(the  "Closing")  shall  take  place at the  office of  Messrs.  Choate,  Hall &
Stewart,  Exchange  Place,  53 State Street,  Boston,  Massachusetts  02109,  on
September  14, 1999 or such other date (not later than  September  30,  1999) to
which you and the Companies may agree (the  "Closing  Date").  The Closing shall
occur not later than 11:00 A.M. Boston time (your reinvestment  deadline) on the
Closing Date. At the Closing,  the Companies  will deliver to you the Securities
to be purchased  by you at the Closing  against  payment of the  purchase  price
thereof to (or for the benefit of) the Companies in immediately  available funds
in accordance  with the following  instructions:  Chase  Manhattan  Bank,  f/b/o
Unidigital Inc., ABA No. 021 000 021, Account No. 910 4049 128.  Delivery of the
Securities  to be purchased  by you at the Closing  shall be made in the form of
one or more Notes and Warrants,  in such  denominations  and  registered in such
names as are

                                      -2-
<PAGE>

specified on Schedule I attached hereto, and in each case dated and, in the case
             ----------
of the Notes,  bearing  interest,  from the Closing  Date. If at the Closing the
Companies shall fail to tender the Securities to be delivered to you as provided
herein, or if at the Closing any of the conditions  specified in section 4 shall
not have been fulfilled to your  satisfaction,  you shall, at your election,  be
relieved  of all  further  obligations  under this  Agreement,  without  thereby
waiving  any  other  rights  you may  have by  reason  of such  failure  or such
non-fulfillment.

4.   Conditions  to  Closing.  Your  obligation  to  purchase  and  pay  for the
     -----------------------
Securities  to be purchased by you at the Closing is subject to the  fulfillment
to your reasonable  satisfaction,  prior to or at the Closing,  of the following
conditions:

     4.1.  Representations  and  Warranties  Correct.  The  representations  and
           -----------------------------------------
warranties  made by the Companies  herein and in the other  Operative  Documents
shall have been  correct when made and shall be correct at and as of the time of
the  Closing  (after  giving  effect  to  the  transactions  consummated  at the
Closing).

     4.2.  Performance;  No Default.  The  Companies  shall have  performed  all
           ------------------------
agreements  and complied with all conditions  contained  herein and in the other
Operative  Documents  required to be performed or complied with by them prior to
or at the Closing and at the time of the Closing, no Default or Event of Default
shall  exist  and no  condition  shall  exist  which has  resulted  in, or could
reasonably be expected to result in, a Material Adverse Change.

     4.3.  Related Transactions.
           --------------------

          (a) The Fleet  Documents shall be in full force and effect and in form
     and substance  satisfactory to you. After giving effect to the Closing, the
     Companies shall have at least $3,000,000 of undrawn  availability under the
     revolving credit facility established under the Fleet Agreement.

          (b) The  Organizational  Documents of the Holding Company  (including,
     without  limitation,  the  terms of the  Preferred  Stock)  and each of its
     Subsidiaries shall be in form and substance satisfactory to you.

          (c) You and the Holding Company shall have entered into a Registration
     Rights  Agreement  substantially  in the form of  Exhibit  4.3(c)  attached
                                                       ---------------
     hereto (the "Registration Rights Agreement").

     4.4.  Compliance  Certificate.  At the Closing,  you shall have received an
           -----------------------
Officer's  Certificate,  dated the Closing Date,  certifying that the conditions
specified in sections 4.1 and 4.2 have been fulfilled.

                                      -3-
<PAGE>

     4.5.  Sale of Securities to Other Purchasers. At the Closing, the Companies
           --------------------------------------
shall issue to the Other  Purchasers  the Securities to be issued at the Closing
to the Other Purchasers pursuant to the Other Securities Purchase Agreements and
shall receive payment in full of the purchase price thereof.

     4.6.  Opinion of Counsel for the Companies.  At the Closing, you shall have
           ------------------------------------
received  an  opinion,   dated  the  Closing  Date,   from  Buchanan   Ingersoll
Professional Corporation,  counsel for the Companies,  substantially in the form
of Exhibit 4.6 attached hereto.
   -----------

     4.7.  Opinion of Choate,  Hall & Stewart.  At the  Closing,  you shall have
           ----------------------------------
received  an opinion,  dated the  Closing  Date,  from  Choate,  Hall & Stewart,
substantially in the form of Exhibit 4.7 attached hereto.

     4.8.  Certain  Additional  Documents  to be  Delivered  at or  Prior to the
           ---------------------------------------------------------------------
Closing.  You shall have  received  the items  specified on Exhibit 4.8 attached
-------                                                     -----------
hereto, each of which shall be satisfactory in form and substance to you.

     4.9.  Payment  of  Transactions  Costs.  The  Companies  shall have paid in
           --------------------------------
immediately available funds all fees, expenses and disbursements incurred by you
at or prior to the  time of the  Closing  in  connection  with the  transactions
contemplated by the Operative  Documents,  including,  without  limitation,  the
reasonable fees, expenses and disbursements of your special counsel.

     4.10. Legal  Investment;  Certificate.  At the  time of the  Closing,  your
           -------------------------------
purchase of the Securities to be issued  pursuant hereto at the Closing shall be
permitted  under the laws and  regulations of any  jurisdiction to which you are
subject  (without  resort to any  provision of any such law  permitting  limited
investments  by you without  restriction  as to the character of the  particular
investment),  and you shall,  if  requested by you,  have  received an Officer's
Certificate,  dated the Closing  Date,  certifying as to such matters as you may
request to enable you to determine whether your purchase is so permitted.

     4.11. Sale and Purchase Not Forbidden by Law. The offer,  issue,  sale  and
           --------------------------------------
delivery by the  Companies of the  Securities to be issued  pursuant  hereto and
your  purchase of such  Securities at the Closing shall not be prohibited by and
shall not subject you to any tax, penalty,  liability or other encumbrance under
or pursuant to any law, statute, rule or regulation (other than those of general
applicability under applicable securities laws).

     4.12. Proceedings  and Documents.  All  proceedings in  connection with the
           --------------------------
transactions  contemplated  by  the  Operative  Documents  and  all  agreements,
documents  and  instruments  incident to such  transactions  shall be reasonably
satisfactory in form and substance to you and your special counsel,  and you and
your  special  counsel  shall have

                                      -4-
<PAGE>

received all such counterpart originals or copies of such agreements,  documents
and instruments as you or they may reasonably request.

     4.13. Joint and Several  Obligations,  etc. All  representations  contained
           -------------------------------------
herein shall be deemed to be separately made by each of the Companies,  and each
of the covenants, agreements and obligations set forth herein shall be deemed to
be the joint and several  covenants,  agreements and  obligations of each of the
Companies.  Any  notice,  request,  consent,  report  or  other  information  or
agreement  delivered by any of the Companies  shall be deemed to be ratified by,
consented  to and also  delivered  by each of the other  Companies.  Each of the
Companies  recognizes  and  agrees  that  each  covenant  and  agreement  of the
"Companies" under this Agreement and the other Operative  Documents shall create
a joint and several  obligation of each of them,  which may be enforced  against
any of them,  jointly,  or against each of them separately,  provided,  however,
                                                             --------   -------
that in no event shall the liability of any Company under this Agreement and the
other Operative Documents exceed the maximum amount that, after giving effect to
the  incurring  of the  obligations  hereunder  and under such  other  Operative
Documents and to any rights to  contribution  of such Company from Affiliates of
such  Company,  would not render the rights of the holders of the  Securities to
payment  hereunder and under such other Operative  Documents  void,  voidable or
avoidable under any applicable fraudulent transfer law.

5.   Representations and Warranties. The Holding Company represents and warrants
     ------------------------------
that (after giving effect to the transactions consummated at the Closing):

     5.1.  Organization,  Standing,  etc.  of the Holding  Company.  Each of the
           -------------------------------------------------------
Holding Company and its  Subsidiaries is a corporation  duly organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation  and has all  requisite  power  and  authority  to own,  lease and
operate  its  properties,  to carry on its  business as now  conducted,  and now
proposed to be conducted, to execute,  deliver and perform each of the Operative
Documents  to  which  it is  (or  is to  be)  a  party  and  to  consummate  the
transactions  contemplated  by  the  Operative  Documents.  No  approval  of the
shareholders  of the  Holding  Company or any of its  Subsidiaries  or any class
thereof is  required  in  connection  therewith  which has not  previously  been
obtained.

     5.2.  Names;  Jurisdictions  of  Incorporation;  Subsidiaries.  Exhibit 5.2
           -------------------------------------------------------   -----------
attached  hereto  correctly  specifies as to the Holding Company and each of its
Subsidiaries: (a) its legal name, (b) the jurisdiction of its incorporation, and
               -                   -
(c) each jurisdiction (other than its jurisdiction of incorporation) in which it
 -
is qualified to do business.  The Holding  Company does not have any  Subsidiary
that is not listed on Exhibit 5.2.  Exhibit 5.2 also  correctly  indicates  each
                      ------------  -----------
Subsidiary of the Holding Company that is a Significant Subsidiary.

     5.3.  Qualification.  Each of the Holding  Company and its  Subsidiaries is
           -------------
duly  qualified  or  licensed  to do  business  and is in good  standing in each
jurisdiction  in which

                                      -5-
<PAGE>

the character of the properties  owned or leased or the nature of the activities
conducted  makes such  qualification  or licensing  necessary,  except for those
jurisdictions  in which the failure to be so  qualified  or licensed or to be in
good  standing  has not  resulted  in, and would not  reasonably  be expected to
result in, a Material Adverse Change.

     5.4.  Business, etc.  The Holding Company and its Subsidiaries  are engaged
           --------------
in the media services  business  providing  large and grand format digital image
solutions and digital "premedia" services (the "Business"), as further described
in the Disclosure Document.

     5.5.  Shares; Shareholders.
           --------------------

          (a) Exhibit 5.5(a) attached hereto  correctly  specifies as to each of
              --------------
     the Holding Company and its Subsidiaries  (immediately  after giving effect
     to the  transactions  consummated  at the  Closing)  (i) the  number of its
                                                           -
     authorized,  issued and  outstanding  Shares (of each class and series) and
     (ii) to the knowledge of the Holding Company, the name of each record owner
      --
     of more than 5% of such Shares,  together with the number (and  percentage,
     calculated on a  fully-diluted  basis) of Shares (of each class and series)
     held by each  such  record  owner.  All of the  outstanding  Shares  of the
     Holding  Company  and its  Subsidiaries  are,  and all Shares  issued  upon
     exercise of the Warrants in  accordance  with the terms  thereof,  will be,
     duly  authorized,  validly  issued,  fully paid and  nonassessable  and not
     subject to preemptive  rights on the part of any other  Person,  and all of
     such Shares have been (or will have been)  offered,  issued and sold by the
     Holding  Company and its  Subsidiaries  in compliance  with all  applicable
     laws.  Except as set forth on  Exhibit  5.5(a),  the  Shares of each of the
                                    ---------------
     Subsidiaries  are  owned   beneficially  and  free  of  any  Lien,   proxy,
     shareholders agreement, voting agreement, voting trust or similar agreement
     or  restriction,  by the Persons  (and in the amounts) set forth on Exhibit
                                                                         -------
     5.5(a) attached hereto.
     -----

          (b) Except as set forth on Exhibit 5.5(b) attached  hereto,  except as
                                     --------------
     provided in section 12, and except for the  Registration  Rights  Agreement
     and the Warrants: (i) there are no outstanding rights, options, warrants or
                        -
     agreements  for the  purchase  from,  or sale or  issuance  by, the Holding
     Company  or any of its  Subsidiaries  of  any of its  Shares  or any  other
     securities convertible into or exercisable or exchangeable for such Shares;
     (ii) there are no agreements  on the part of the Holding  Company or any of
      --
     its  Subsidiaries to issue,  sell or distribute any of its Shares or any of
     its properties and assets; (iii) neither the Holding Company nor any of its
                                 ---
     Subsidiaries  has any  obligation  (contingent  or  otherwise) to purchase,
     redeem or otherwise acquire any of its Shares or any interest therein or to
     pay any dividend or make any distribution in respect  thereof;  and (iv) no
                                                                          --
     Person is entitled to (A) any  preemptive  or similar right with respect to
                            -
     the  issuance  of  any  Shares  of  the  Holding  Company  or  any  of  its
     Subsidiaries  or (B)
                       -

                                      -6-
<PAGE>

     any rights with  respect to the  registration  of any Shares of the Holding
     Company or any of its Subsidiaries under the Securities Act.

          (c) The  aggregate  number of shares of  Common  Stock  issuable  upon
     exercise of the Warrants immediately after the Closing is 690,134 which, if
     then issued, would constitute at least 7.5% of the Common Stock (calculated
     on a fully-diluted basis).

          (d) The Holding  Company has reserved  690,134  shares of Common Stock
     solely for issuance upon exercise of the Warrants.

          (e) Neither the  Organizational  Documents of the Holding  Company nor
     any other agreement, document or instrument binding on or applicable to the
     Holding  Company or its  shareholders  contains any  provision  requiring a
     higher voting requirement with respect to action taken (and/or to be taken)
     by the  shareholders  or directors  of the Holding  Company than that which
     would apply in the absence of such provision.

     5.6.  Financial Statements. You have been furnished with:
           --------------------

          (a) the financial  statements contained in Section VI and Appendices A
     and B of the  Disclosure  Document and in the Holding  Company's  Form 10-Q
     (for the fiscal  quarter ended May 31, 1999),  which  financial  statements
     have  been  prepared  in  accordance  with GAAP and  present  fairly in all
     material respects the financial  position and the results of operations and
     cash  flows of the  Person(s)  purported  to be  covered  thereby as at the
     respective  dates and for the  respective  periods  indicated in conformity
     with GAAP (subject, in the case of any unaudited financial  statements,  to
     normal  year-end  and  audit  adjustments  and  the  omission  of  footnote
     disclosure);

          (b) the  projections  contained  in Section  VI and  Appendix C of the
     Disclosure  Document,  which  projections  were prepared in good faith, are
     based upon assumptions that the Holding Company believes are reasonable and
     take into account all material information  regarding the matters set forth
     therein; and

          (c) the pro  forma  unaudited  balance  sheet of the  Holding  Company
     contained in Section VI and Appendix C of the  Disclosure  Document,  which
     balance sheet fairly presents the financial position of the Holding Company
     and its Subsidiaries as at the Closing Date,  adjusted on a pro forma basis
     to give effect to the consummation of the transactions  contemplated by the
     Operative  Documents,  and reflects all known  material  liabilities of the
     Holding Company,  contingent or other, as at the Closing Date,  required by
     GAAP to be reflected  therein,  other than liabilities  incurred since such
     date in the ordinary course of business.

                                      -7-
<PAGE>

     5.7.  Changes;  Solvency,  etc. Since  August 31, 1998: (a)  except as  set
           ------------------------                           -
forth on Exhibit 5.7  attached  hereto,  there has been no change in the assets,
         -----------
liabilities or financial  condition of the Holding Company and its  Subsidiaries
from that set forth in the balance  sheet as at such date referred to in section
5.6(a),  other than  changes in the ordinary  course of business  which have not
been,  either  in any  case  or in the  aggregate,  materially  adverse;  (b) no
                                                                           -
condition or event has occurred  which has resulted in, or could  reasonably  be
expected to result in, a Material Adverse Change; and (c) except as set forth on
                                                       -
Exhibit  5.7  attached  hereto,  neither  the  Holding  Company  nor  any of its
------------
Subsidiaries has, directly or indirectly,  declared,  ordered,  paid or made any
Restricted  Payment  or  Restricted  Investment.  The  Holding  Company  and its
Subsidiaries are Solvent.

     5.8.  Tax Returns and Payments.
           ------------------------

          (a) The  Holding  Company  and its  Subsidiaries  have  filed  all tax
     returns  required  by law to be filed and have paid all taxes,  assessments
     and other  governmental  charges levied upon their  respective  properties,
     assets,  income,  receipts,  franchises or sales,  other than those not yet
     delinquent and those, not substantial in aggregate  amount,  being or about
     to be contested as provided in section 14.2(a). The income tax liability of
     the  Holding  Company  and its  Subsidiaries  has never been  audited.  The
     Holding  Company  and its  Subsidiaries  have not  executed  any  waiver or
     waivers that would have the effect of extending the  applicable  statute of
     limitations in respect of income tax liabilities. The charges, accruals and
     reserves  in the  financial  statements  of the  Holding  Company  and  its
     Subsidiaries in respect of taxes for all fiscal periods are adequate in the
     opinion of the Holding Company,  and the Holding Company knows of no unpaid
     assessments  for  additional  taxes for any  fiscal  period or of any basis
     therefor.

          (b) Except as set forth on Exhibit 5.8 attached  hereto,  no liability
                                     -----------
     for any tax  (whether  income,  documentary,  sales,  stamp,  registration,
     issue, capital,  property,  excise or otherwise),  duty, levy, impost, fee,
     charge or withholding, directly or indirectly, imposed, assessed, levied or
     collected by or for the account of any governmental  authority of or in any
     jurisdiction,  including, without limitation,  England, will be incurred by
     the Holding Company or any of its  Subsidiaries or any holder of any of the
     Securities as a result of the execution or delivery of any of the Operative
     Documents,  and no such liability will be imposed on the Holding Company or
     any of  its  Subsidiaries  or any  holders  of any of the  Securities  with
     respect to or on  account  of any  payment  (or other  performance)  by the
     Holding  Company  or any of its  Subsidiaries  under  any of the  Operative
     Documents,  provided that payments due under the Operative  Documents shall
                 --------
     not be reduced as a result of any such  liability,  whether or not the same
     is  specified  on Exhibit  5.8  attached  hereto,  as further  provided  in
                       ------------
     sections 21 and 22 hereof.  Under applicable laws,  regulations and rulings
     currently in effect in the  jurisdictions  in which the Holding  Company or
     any of its Subsidiaries is incorporated or does business, there is no limit
     on the  conversion of any currency

                                      -8-
<PAGE>

     owned by the Holding Company or any of its Subsidiaries  into U.S. dollars,
     or the export or use of such U.S.  dollars and any other U.S. dollars owned
     by the Holding Company or any of its Subsidiaries,  at the times and in the
     amounts  necessary to permit the Holding  Company and its  Subsidiaries  to
     discharge their obligations under the Operative Documents.  If any exchange
     control or similar  limitations are  instituted,  the Holding Company will,
     and will cause each of its  Subsidiaries  to, take all requisite  action to
     obtain any  consent,  approval or other  governmental  action  necessary to
     permit timely discharge of such obligations in U.S. dollars.

     5.9.  Debt, Liens, Investments and Transactions with Affiliates; Derivative
           ---------------------------------------------------------------------
Transactions;   Material  Agreements.  Exhibit  5.9  attached  hereto  correctly
------------------------------------   ------------
describes as to the Holding Company and each of its Subsidiaries:

          (a)  all of its  Debt  to be  outstanding  immediately  following  the
     Closing (other than that evidenced by the Notes);

          (b) all  Liens to  which  any of its  properties  and  assets  will be
     subject  immediately  following  the  Closing  (other  than  those  of  the
     character described in section 14.9(b));

          (c) all  Investments  (and  all  agreements  and  commitments  to make
     Investments) to be owned or held (or in effect) by it immediately following
     the Closing (other than  Investments of the character  described in clauses
     (b) through (i), inclusive, of the definition of Permitted Investments);

          (d) all of its Affiliates and all  transactions  with Affiliates which
     were  consummated  during the 12-month  period ended on the Closing Date or
     which it is now  obligated or now intends to  consummate at any time in the
     future;

          (e) all  Derivative  Transactions  applicable  to it and/or any of its
     properties and assets; and

          (f) all other  agreements to or by which it is a party or is bound and
     under  which its  obligations  (or the fair value  thereof)  exceed or will
     exceed $2,000,000 during any period of 12 consecutive months.

     5.10. Title to  Properties;  Liens;  Leases.  The Holding  Company  and its
           -------------------------------------
Subsidiaries  have  good  and  marketable  title  to  all  of  their  respective
properties and assets, including,  without limitation, the properties and assets
reflected in the balance  sheet,  dated August 31, 1998,  referred to in section
5.6(a), except properties and assets disposed of since such date in the ordinary
course of business or otherwise  disclosed on Exhibit 5.10 attached hereto, free
                                              ------------
of all Liens (other than the Liens  permitted  under section 14.9).  The Holding
Company and its Subsidiaries enjoy peaceful and undisturbed possession

                                      -9-
<PAGE>

under all leases  under  which they  operate,  and all of such leases are valid,
subsisting and in full force and effect.

     5.11. Litigation,  etc.  There is  no action,  proceeding or  investigation
           -----------------
pending  or,  to  the  best  of the  Holding  Company's  knowledge,  threatened,
including,  without  limitation,  those  referred  to on Exhibit  5.11  attached
                                                         -------------
hereto, or any basis therefor known to the Holding Company,  which questions the
validity of any of the  Operative  Documents  or any action taken or to be taken
pursuant  thereto or which has resulted in, or could  reasonably  be expected to
result in, a Material Adverse Change. There is no outstanding  judgment,  decree
or order which has resulted in, or could  reasonably be expected to result in, a
Material  Adverse  Change.  Exhibit 5.11  attached  hereto sets forth a true and
                            ------------
complete list of all actions, proceedings and investigations (pending or, to the
knowledge of the Holding  Company,  threatened)  and all judgments,  decrees and
orders  applicable to the Holding Company and/or any of its  Subsidiaries or any
of their respective properties and assets.

     5.12. Valid  and Binding  Obligations;  Compliance with Other  Instruments,
           ---------------------------------------------------------------------
Borrowing Restrictions, etc.
----------------------------

          (a) This Agreement has been duly authorized, executed and delivered by
     each of the  Companies  and  constitutes  the  valid  and  legally  binding
     obligation  of each of the Companies  enforceable  against it in accordance
     with its terms. Each of the other Operative  Documents to which the Holding
     Company and/or any of its  Subsidiaries is a party has been duly authorized
     by such Person and, when executed and delivered,  will constitute the valid
     and legally binding  obligation of such Person,  enforceable  against it in
     accordance  with  its  terms.   Without  limiting  the  generality  of  the
     foregoing,  no action by any governmental  authority is necessary to ensure
     the validity, legality,  enforceability or admissibility in evidence of any
     of the Operative Documents in any such jurisdiction.

          (b)  Neither the Holding  Company  nor any of its  Subsidiaries  is in
     violation of or in default under any term of its Organizational  Documents,
     or of any agreement,  document,  instrument,  judgment, decree, order, law,
     statute,  rule or regulation  applicable to it or any of its properties and
     assets,  in any way which has resulted in, or could  reasonably be expected
     to result in, a Material Adverse Change. Without limiting the generality of
     the  foregoing,  the  Holding  Company and each of its  Subsidiaries  is in
     compliance with (and neither it nor any of its predecessors in interest has
     received any notice to the contrary) and there is no reasonable possibility
     of any  liability  of or any  judgment,  decree  or order  binding  upon or
     applicable to the Holding Company and/or any of its  Subsidiaries or any of
     their  respective  properties  and  assets  under  or  on  account  of  any
     Environmental  Laws,  except  where the same has not resulted in, and would
     not reasonably be expected to result in, a Material Adverse Change.

                                      -10-
<PAGE>

          (c) Except for the  repayment  in full of the CIBC Notes  (which  will
     occur on the Closing Date), the execution,  delivery and performance of and
     the  consummation  of  the  transactions   contemplated  by  the  Operative
     Documents  will not violate or  constitute a default  under,  or permit any
     Person to accelerate or to require the  prepayment of any  Indebtedness  of
     the Holding Company or any of its Subsidiaries or to terminate any lease or
     agreement of the Holding Company or any of its Subsidiaries pursuant to, or
     result in the  creation of any Lien  (other  than the Liens  created by the
     Fleet  Documents)  upon any of the  properties  or  assets  of the  Holding
     Company  or  any  of  its  Subsidiaries   pursuant  to,  any  term  of  its
     Organizational  Documents  or  of  any  agreement,   document,  instrument,
     judgment, decree, order, law, statute, rule or regulation applicable to any
     of them or any of their respective properties and assets.

          (d) Neither the Holding Company nor any of its Subsidiaries is a party
     to or bound by or subject to any agreement, document, instrument, judgment,
     decree,  order, law, statute,  rule or regulation (other than the Operative
     Documents,  the Fleet  Documents and laws,  statutes,  rules or regulations
     affecting   creditors  or  businesses   generally)   (i)  which   restricts
                                                           -
     (absolutely,  contingently  or  otherwise)  its right or  ability  to incur
     Indebtedness,  to  issue  securities  or  to  consummate  the  transactions
     contemplated  hereby;  (ii)  under  the terms of or  pursuant  to which its
                             --
     obligation to pay all amounts due from it and/or to perform all obligations
     imposed on it and/or to comply with the terms applicable to it under any of
     the Operative Documents or otherwise in respect of any of the Securities is
     in any way restricted (absolutely,  contingently or otherwise); (iii) which
                                                                      ---
     restricts  (absolutely,  contingently or otherwise) its right or ability to
     make any  distributions  to its  shareholders  or in  respect of any of its
     Shares,  to mortgage or dispose of or grant Liens on any of its properties,
     to consummate any merger, consolidation or acquisition, to make Investments
     or capital expenditures, to enter into and perform leases, to pay executive
     compensation  and/or to  conduct  its  business  as now  conducted  and now
     proposed  to be  conducted,  or  (iv)  which  has  resulted  in,  or  could
                                       --
     reasonably be expected to result in, a Material Adverse Change.

     5.13. ERISA and Other Employee Benefit Matters.
           ----------------------------------------

          (a) The Holding  Company and each ERISA  Affiliate  have  operated and
     administered  each Plan in compliance  with all applicable  laws except for
     such instances of  noncompliance  which have not resulted in, and would not
     reasonably be expected to result in, a Material Adverse Change. Neither the
     Holding Company nor any ERISA Affiliate has incurred any liability pursuant
     to Title I or IV of ERISA or the  penalty or excise tax  provisions  of the
     Code relating to employee benefit plans (as defined in section 3 of ERISA),
     and no event,  transaction  or condition  has occurred or exists that could
     reasonably be expected to result in the incurrence of any such liability by
     the Holding  Company or any ERISA  Affiliate,  or in the  imposition of any
     Lien on any of the rights,  properties

                                      -11-
<PAGE>

     or assets of the  Holding  Company or any ERISA  Affiliate,  in either case
     pursuant  to  Title I or IV of  ERISA  or to such  penalty  or  excise  tax
     provisions  or to section  401(a)(29)  or 412 of the Code,  other than such
     liabilities or Liens as would not  individually or in the aggregate  result
     in a Material Adverse Change.

          (b) The present value of the aggregate benefit  liabilities under each
     of the Plans (other than Multiemployer Plans),  determined as of the end of
     such Plan's  most  recently  ended plan year on the basis of the  actuarial
     assumptions  specified  for  funding  purposes  in such  Plan's most recent
     actuarial  valuation report,  did not exceed the aggregate current value of
     the assets of such Plan  allocable  to such benefit  liabilities.  The term
     "benefit  liabilities"  has the meaning  specified in section 4001 of ERISA
     and the  terms  "current  value"  and  "present  value"  have  the  meaning
     specified in section 3 of ERISA.

          (c) Neither the Holding Company nor any ERISA  Affiliate  participates
     or has  ever  participated  in a  Multiemployer  Plan or any  multiemployer
     pension plan as defined under any other  applicable law,  statute,  rule or
     regulation.

          (d) Neither the Holding  Company nor any of its  Subsidiaries  has any
     post retirement welfare benefit  obligation  (without regard to liabilities
     attributable to continuation coverage mandated by section 4980B of the Code
     or any analogous provisions of any law, statute,  rule or regulation of any
     jurisdiction other than the United States or any state thereof).

          (e) The consummation of the transactions contemplated by the Operative
     Documents  will  not  involve  any  transaction  that  is  subject  to  the
     prohibitions  of section 406(a) of ERISA or in connection  with which a tax
     could be imposed pursuant to section  4975(c)(1)(A)-(D)  of the Code or any
     analogous  provisions  of any  law,  statute,  rule  or  regulation  of any
     jurisdiction  other  than the  United  States  or any  state  thereof.  The
     representation  in the first  sentence of this  section  5.13(e) is made in
     reliance upon and subject to the accuracy of your representation in section
     26(b) as to the sources of the funds used to pay the purchase  price of the
     Securities to be purchased by you.

          (f) Each  plan,  fund or similar  program  established  or  maintained
     outside of the United States of America by the Holding  Company  and/or any
     of its Subsidiaries or to which  contributions are, or within the preceding
     five years have been made or  required  to be made by the  Holding  Company
     and/or any of its  Subsidiaries  for the benefit of its employees or former
     employees  residing  outside of the United States of America which provides
     for pension, retirement income, health or medical insurance,  disability or
     other  employee  benefits  and  which is not  subject  to ERISA or the Code
     (collectively,   the  "Overseas  Employee  Plans")  has  been  operated  or
     administered  in  compliance  with its  terms and the  requirements  of all
     applicable laws, statutes,  rules and regulations,  except for instances of

                                      -12-
<PAGE>

     noncompliance  which  have not  resulted  in, and could not  reasonably  be
     expected to result in, a Material Adverse Change, has been registered where
     required  by  applicable  law and  maintained  in good  standing  with  all
     applicable  regulatory  authorities,  and,  with respect to each such plan,
     fund or similar  program,  each of the Holding Company and its Subsidiaries
     has satisfied its funding or  contribution  obligations in accordance  with
     the terms  thereof  and  applicable  laws,  except  in each case  where the
     failure to do the same has not  resulted  in, and could not  reasonably  be
     expected to result in, a Material Adverse Change. No event,  transaction or
     condition has occurred or exists with respect to any Overseas Employee Plan
     that could  reasonably be expected to result in the  imposition of any Lien
     on the Holding  Company or a Subsidiary  or the  incurrence  by the Holding
     Company or any  Subsidiary  of any  penalty,  penalty tax or fine under any
     applicable law, other than such Liens, penalties, penalty taxes or fines as
     would  not  individually  or in the  aggregate  result  in,  and  could not
     reasonably be expected to result in, a Material Adverse Change. The present
     value of the  aggregate  benefit  liabilities  under  each of the  Overseas
     Employee Plans (for which funding is required pursuant to applicable law or
     the terms  thereof),  determined  as of the end of such  Overseas  Employee
     Plan's most recently  ended year on the basis of both the going concern and
     solvency  actuarial  valuation  assumptions and methodologies  contained in
     such Overseas  Employee Plan's most recent  actuarial  valuation report did
     not  exceed the  aggregate  current  value of the  assets of such  Overseas
     Employee Plan allocable to such benefit liabilities.

     5.14. Consents,  etc.  No  consent,   approval   or  authorization  of,  or
           ---------------
declaration or filing with, or other action by, any Person  (including,  without
limitation,  any  creditor  of or lender to the  Holding  Company  or any of its
Subsidiaries  and  any  governmental  authority)  is  required  as  a  condition
precedent  to  the  valid  execution,   delivery  and  performance  of  and  the
consummation of the transactions contemplated by the Operative Documents,  other
than those  specified on Exhibit  5.14  attached  hereto,  all of which shall be
                         -------------
unconditional,  in full force and effect  and not  subject to appeal,  review or
revocation on and as of the Closing Date.

     5.15. Proprietary   Rights;   Licenses.   The   Holding  Company  and   its
           --------------------------------
Subsidiaries  have all  Proprietary  Rights and Licenses as are adequate for the
conduct of their  respective  businesses as now conducted and now proposed to be
conducted,  without  any known  conflict  with the rights of  others.  Each such
Proprietary  Right  and  License  is in full  force  and  effect,  all  material
obligations  of the Holding  Company and its  Subsidiaries,  as the case may be,
with respect thereto have been fulfilled and performed,  and, to the best of the
Holding  Company's  knowledge,  there is no  infringement  thereon  by any other
Person.  No default in the  performance  or  observance  by the Holding  Company
and/or  any of its  Subsidiaries  (or any of their  respective  predecessors  in
interest) of its  obligations  thereunder has occurred  which permits,  or after
notice of lapse of time or both would permit,  the  revocation or termination of
any  material  Proprietary

                                      -13-
<PAGE>

Right or License or which has  resulted in, or could  reasonably  be expected to
result in, a Material Adverse Change.

     5.16. Offer of Securities;  Investment Bankers. Neither the Holding Company
           ----------------------------------------
nor any of its  Subsidiaries  nor any  Person  acting  on their  behalf  (a) has
                                                                          -
directly or indirectly offered the Securities or any part thereof or any similar
securities  for issue or sale to, or solicited  any offer to buy any of the same
from, anyone other than you and not more than 51 other institutional  investors,
(b) has taken or will take any action which would bring the issuance and sale of
the  Securities  within the provisions of Section 5 of the Securities Act or the
registration  or  qualification  provisions of any applicable  blue sky or other
securities  laws,  (c) has dealt with any broker,  finder,  commission  agent or
                    -
other similar Person in connection with the sale of the Securities and the other
transactions contemplated by the Operative Documents, other than Fleet Corporate
Finance, or (d) is under any obligation to pay any broker's fee, finder's fee or
             -
commission  in  connection  with such  transactions,  other  than a fee to Fleet
Corporate Finance, which is solely the obligation of the Holding Company.

     5.17. Government  Regulation.  Neither the Holding  Company nor any of  its
           ----------------------
Subsidiaries  is subject to regulation  under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment  Company Act of 1940,  each
as amended.

     5.18. Labor Relations;  Suppliers,  Distributors and Customers.  No dispute
           --------------------------------------------------------
involving  employees of the Holding  Company or any of its  Subsidiaries  or the
relationship  of  the  Holding  Company  or any of  its  Subsidiaries  with  its
employees  has  resulted in, or could  reasonably  be expected to result in, any
Material  Adverse  Change.   The   relationships   with  the  suppliers  to  and
distributors  for and customers of the Holding Company and its  Subsidiaries are
satisfactory  commercial  working  relationships and, during the 12-month period
ended on the  Closing  Date,  no such  supplier,  distributor  or  customer  has
canceled  or  otherwise  terminated  its  relationship  with  or  decreased  its
services,  supplies or  materials to or its usage or purchase of the services or
products of the Holding Company or any of its Subsidiaries in a manner which has
resulted in, or could  reasonably  be expected to result in, a Material  Adverse
Change.  The Holding Company is not aware of any intention of any such supplier,
distributor or customer to take any such action.

     5.19. Year 2000 Compliance. The operating systems for the Holding Company's
           --------------------
and its Subsidiaries'  computers and all software  applications that run on such
computers  are Year  2000  Compliant,  except  where a  failure  to be Year 2000
Compliant  will not and could not reasonably be expected to result in a Material
Adverse Change.

     5.20. Disclosure.  Neither this  Agreement nor any  of the other  Operative
           ----------
Documents nor any other document,  certificate or written statement furnished to
you by or on  behalf  of the  Holding  Company  or  any of its  Subsidiaries  in
connection  with  the  transactions  contemplated  by  the  Operative  Documents
(including, without limitation, the

                                      -14-
<PAGE>

Disclosure Document),  contains any untrue statement of a material fact or omits
to state a material  fact  necessary in order to make the  statements  contained
herein and therein not misleading in the light of the circumstances  under which
such  statements  were made, it being  understood  that,  except as set forth in
section  5.6,  no  representation  or  warranty  is  made  with  respect  to any
projections or other prospective financial  information.  There is no fact known
to the Holding  Company  (other than  information  concerning  general  economic
conditions  known to the  public  generally)  which  has  resulted  in, or could
reasonably  be expected to result in, a Material  Adverse  Change  which has not
been set forth in this Agreement,  the other  Operative  Documents and the other
documents, certificates and written statements referred to above in this section
5.20.

6.   Use of Proceeds.
     ---------------

          (a)  The  proceeds  of the  sale  of the  Securities  received  by the
     Companies at the Closing will be used on the Closing  Date,  together  with
     other funds available to the Companies,  to repay in full all amounts owing
     in respect of the Holding Company's 12-1/2% Senior  Subordinated  Notes due
     March 2004 (the "CIBC  Notes") and to make the other  payments to the other
     Persons  specified on Exhibit 6 attached hereto,  and any remaining balance
     of such proceeds will be used for general corporate purposes.

          (b) Neither the Holding Company nor any of its Subsidiaries  owns, and
     the Holding  Company will not, and will not permit any of its  Subsidiaries
     to, directly or indirectly, use any part of the proceeds of the sale of the
     Securities  for the purpose of purchasing or carrying any "margin stock" or
     "margin  security"  within the  meaning of any  regulation  of the Board of
     Governors of the Federal Reserve System (herein called a "margin security")
     or for the  purpose of  reducing or  retiring  any  Indebtedness  which was
     originally  incurred to  purchase  or carry any margin  security or for any
     other purpose which might constitute the  transactions  contemplated by the
     Operative   Documents  a  "purpose  credit"  within  the  meaning  of  said
     regulations or cause this Agreement or any of the other Operative Documents
     to violate any regulation of the Board of Governors of the Federal  Reserve
     System,  or  the  Exchange  Act  or  any  other  applicable  law,  statute,
     regulation, rule, order or restriction.

7.   Financial  Statements and Information.  The Holding Company will furnish to
     -------------------------------------
you,  so  long as you  shall  hold  any of the  Securities,  and to  each  other
institutional holder from time to time of any of the Securities:

          (a) as soon as available and in any event within 45 days after the end
     of each of the first  three  fiscal  quarters  in each  fiscal  year of the
     Holding Company,  the consolidated and consolidating  balance sheets of the
     Holding  Company and its  Subsidiaries as at the end of such period and the
     related  consolidated  and  consolidating  statements  of income,  retained
     earnings and cash

                                      -15-
<PAGE>

     flows for such  period and for the portion of such fiscal year ended on the
     last day of such period, in each case setting forth in comparative form the
     corresponding figures for the same period and portion of the next preceding
     fiscal year; provided that (i) so long as the Holding Company is subject to
                  --------       -
     the  periodic  reporting  requirements  imposed by the  Exchange  Act,  the
     reporting  requirements of this section 7(a) shall be satisfied by delivery
     by the Holding  Company of its quarterly  report on Form 10-Q (as in effect
     on the date hereof) upon filing thereof with the Commission,  together with
     the  Holding  Company's  quarterly  report  to  stockholders  and  (ii) any
                                                                         --
     extension  granted  to the  Company  for the  filing of a Form  10-Q  shall
     automatically  extend the time  period in which the  financial  information
     required to be delivered under this section 7(a) shall be delivered to you,
     but in any event the financial  statements required under this section 7(a)
     shall be  delivered  not  later  than 60 days  after the end of each of the
     first three fiscal quarters in each fiscal year of the Holding Company;

          (b) as soon as available and in any event within 90 days after the end
     of  each  fiscal  year  of  the  Holding  Company,   the  consolidated  and
     consolidating balance sheets of the Holding Company and its Subsidiaries as
     at the end of such  year and the  related  consolidated  and  consolidating
     statements  of income,  retained  earnings and cash flows for such year, in
     each case setting forth in comparative form the  corresponding  figures for
     the next preceding fiscal year, all in reasonable detail and accompanied by
     the standard  unqualified report on such consolidated  financial statements
     of the Holding Company and its  Subsidiaries of Ernst & Young LLP (or other
     accountants of recognized national standing selected by the Holding Company
     or such other accountants  reasonably  satisfactory to the Required Holders
     of each class of  Securities),  which report shall (i) state that the audit
                                                         -
     of  such  accountants  in  connection  with  such  consolidated   financial
     statements  has  been  conducted  in  accordance  with  generally  accepted
     auditing  standards  and that such  accountants  believe  that  such  audit
     provides a  reasonable  basis for their  opinion,  (ii)  contain  the other
                                                         --
     statements  required  from  time  to  time  by the  American  Institute  of
     Certified Public Accountants for an auditor's standard  unqualified opinion
     (and shall not  contain any  additional  explanatory  paragraph  concerning
     uncertainties  or other  matters),  and (iii)  include  the opinion of such
                                              ---
     accountants that such consolidated  financial  statements present fairly in
     all material  respects the consolidated  financial  position of the Holding
     Company  and its  Subsidiaries  as at the end of such  fiscal  year and the
     consolidated  results of operations and cash flows for such fiscal year, in
     conformity  with GAAP;  provided that (i) so long as the Holding Company is
                             --------       -
     subject to the periodic reporting requirements imposed by the Exchange Act,
     the  reporting  requirements  of this  section  7(b) shall be  satisfied by
     delivery  by the Holding  Company of its annual  report on Form 10-K (as in
     effect  on the date  hereof)  upon  filing  thereof  with  the  Commission,
     together with the Holding  Company's annual report to stockholders and (ii)
                                                                             --
     any  extension  granted to the  Company for the filing of a Form 10-K shall
     automatically  extend the time  period in which the financial

                                      -16-
<PAGE>

     information  required  to be  delivered  in  this  section  7(b)  shall  be
     delivered to you, but in any event the financial  statements required under
     this section 7(b) shall be delivered  not later than 120 days after the end
     of each fiscal year of the Holding Company;

          (c) together  with each delivery of financial  statements  pursuant to
     sections 7(a) and 7(b), an Officer's Certificate which shall:

               (i) certify that such financial  statements have been prepared in
          accordance  with GAAP applied on a  consistent  basis  throughout  the
          periods  covered  thereby and present fairly in all material  respects
          the consolidated  financial  position and the consolidated  results of
          operations and cash flows of the Holding Company and its  Subsidiaries
          as at the end of and for the  periods  covered  thereby in  conformity
          with GAAP (subject, in the case of any unaudited financial statements,
          to  normal  year-end  and  audit   adjustments  and  the  omission  of
          footnotes);

               (ii) state  that,  after due  inquiry,  the signer  does not have
          knowledge of the  existence,  during the fiscal period covered by such
          financial statements or as at the date of such Officer's  Certificate,
          of (A) any "reportable condition" in the internal control structure of
              -
          the  Holding  Company or any of its  Subsidiaries,  (B) any Default or
                                                               -
          Event of Default,  (C) any Change of  Control,  or, if such is not the
                              -
          case,  specifying  in  reasonable  detail  the  nature  and  period of
          existence   thereof  and  what  action  the  Holding  Company  or  the
          applicable  Subsidiary has taken,  is taking and proposes to take with
          respect  thereto  or (D) any  event or  condition  that  requires  any
                                -
          adjustment to the "Exercise Price" (as defined in the Warrants) or the
          number  or  kind of  Warrant  Shares  issuable  upon  exercise  of the
          Warrants;

               (iii) show in  reasonable  detail all  computations  required  to
          demonstrate  compliance,  during and at the end of the  fiscal  period
          covered by such financial statements,  with the provisions of sections
          14.5, 14.6, 14.7 and 14.15;

               (iv) include in reasonable  detail  management's  discussion  and
          analysis of the results of operations  and the financial  condition of
          Holding  Company  and  its  Subsidiaries  as at the end of and for the
          fiscal  period  covered  by such  financial  statements,  including  a
          discussion  of any  significant  variation  from the  budgets for such
          period delivered pursuant to section 7(h);

               (v) if there shall exist any Subsidiary of the Holding Company as
          of the date of such  Officer's  Certificate  which did not exist as of
          the

                                      -17-
<PAGE>

          date of the last  Officer's  Certificate  delivered  pursuant  to this
          section  7(c),  specify  with  respect  to each  such  Subsidiary  the
          information called for by Exhibit 7(c)(v), contain a brief description
                                    ---------------
          of the nature of each such Subsidiary's business and certify that each
          such new Subsidiary has complied with the provisions of section 14.11;
          and

               (vi) in the case of an Officer's  Certificate  delivered together
          with the financial  statements  required  pursuant to section 7(b), be
          accompanied  by a  certificate  of the  accountants  reporting on such
          financial statements stating that in making the examination  necessary
          therefor no knowledge  was obtained of any Default or Event of Default
          by such accountants except as specified in such certificate;

          (d) as promptly as  practicable  (but in any event not later than five
     Business Days) after receipt thereof,  copies of all final reports or final
     written  comments  (including,   without  limitation,   audit  reports  and
     so-called management letters) submitted by independent accountants;

          (e) as promptly as  practicable  (but in any event not later than five
     days)  after  the same are  available,  copies  of (i) all  material  press
                                                         -
     releases  issued by the Holding  Company or any  Subsidiary  of the Holding
     Company, and all notices, proxy statements,  financial statements,  reports
     and documents as the Holding Company shall send or make available generally
     to its  shareholders or as any Subsidiary of the Holding Company shall send
     or make  available  generally  to its  shareholders  other than the Holding
     Company  and  (ii)  all  periodic  and  special   reports,   documents  and
                    --
     registration  statements  (other  than  on  Form  S-8 or a  successor  form
     thereto) which the Holding Company or any Subsidiary of the Holding Company
     furnishes  or files,  or any  officer or  director  or  shareholder  of the
     Holding Company or any of its Subsidiaries  furnishes or files with respect
     to the Holding Company or any of its Subsidiaries,  with the Commission (or
     any analogous foreign governmental authority) or any securities exchange;

          (f) as  promptly as  practicable  (but in any event not later than ten
     Business Days) after any executive officer of the Holding Company or any of
     its  Subsidiaries  becomes aware of the  occurrence of any of the following
     conditions  or events,  an Officer's  Certificate  specifying in reasonable
     detail the nature and period of existence thereof,  what action the Holding
     Company or any of its  Subsidiaries  has taken,  is taking and  proposes to
     take with respect  thereto:  (i) with respect to any Plan,  any  reportable
                                   -
     event,  as  defined  in  section  4043(b)  of  ERISA  and  the  regulations
     thereunder,  for which notice thereof has not been waived  pursuant to such
     regulations as in effect on the date hereof; (ii) the taking by the PBGC of
                                                   --
     steps to institute,  or the  threatening by the PBGC of the institution of,
     proceedings  under  section  4042 of ERISA for the  termination  of, or the
     appointment  of a trustee to  administer,  any Plan,  or the receipt by the
     Holding

                                      -18-
<PAGE>

     Company or any ERISA Affiliate of a notice from a  Multiemployer  Plan that
     such action has been taken by the PBGC with  respect to such  Multiemployer
     Plan;  (iii) any event,  transaction  or condition that would result in the
             ---
     incurrence of any liability by the Holding  Company or any ERISA  Affiliate
     pursuant to Title I or IV of ERISA or the penalty or excise tax  provisions
     of the Code relating to employee benefit plans, or in the imposition of any
     Lien on any of the rights,  properties or assets of the Holding  Company or
     any ERISA  Affiliate  pursuant to Title I or IV of ERISA or such penalty or
     excise tax provisions,  if such liability or Lien,  taken together with any
     other such  liabilities or Liens then  existing,  has resulted in, or could
     reasonably be expected to result in, a Material  Adverse Change or (iv) the
                                                                         --
     occurrence of any analogous  condition or event with respect to any pension
     plan or other arrangement not subject to ERISA;

          (g) as promptly as practicable  (but in any event not later than three
     Business  Days)  after  the  Holding  Company  obtains   knowledge  of  the
     occurrence of any Default or Event of Default, or of any condition or event
     which has  resulted  in, or could  reasonably  be  expected to result in, a
     Material Adverse Change, an Officer's Certificate  specifying in reasonable
     detail the nature and period of existence thereof,  what action the Holding
     Company or any of its  Subsidiaries  has taken,  is taking and  proposes to
     take with  respect  thereto and the date,  if any, on which it is estimated
     the same will be remedied;

          (h) as  promptly  as  practicable  (but in any event not later than 30
     days)  prior to the end of each  fiscal  year of the  Holding  Company,  an
     annual budget prepared on a quarterly basis for the Holding Company and its
     Subsidiaries  for  the  succeeding  fiscal  year  (displaying   anticipated
     consolidated  and  consolidating  balance  sheets and statements of income,
     retained  earnings  and cash flows) and, as promptly as  practicable  after
     preparation  thereof,  any other  significant  budgets  which  the  Holding
     Company  or any of its  Subsidiaries  prepares  and any  revisions  of such
     annual or other budgets;

          (i) such  other  material  information  and  notices  relating  to the
     Holding  Company  and/or  any of its  Subsidiaries  as shall be given to or
     received from any bank, financial  institution or other Person to which the
     Holding  Company or any of its  Subsidiaries is indebted for borrowed money
     (other than that  relating  solely to  collateral  for such  Indebtedness),
     including,  without  limitation,  any notice of default or event of default
     under  any of the Fleet  Documents,  such  information  and  notices  to be
     furnished to the holders of the Securities at the same time as it is given,
     or immediately  after it is received,  by the Holding Company and/or any of
     its Subsidiaries; and

          (j) such  other  information  as from time to time may  reasonably  be
     requested.

                                      -19-
<PAGE>

8.   Inspection; Confidentiality.
     ---------------------------

          (a)  The   Companies   will  permit  any  Person   designated  by  any
     institutional  holder on reasonable  notice,  during normal business hours,
     and at such  holder's  expense  (unless a Default or Event of Default shall
     have occurred and be continuing, in which case, at the Companies' expense),
     to visit and  inspect  any of the  properties  of the  Companies  and their
     Subsidiaries,  to  examine  their  books and  records  (and to make  copies
     thereof and take extracts therefrom) and to discuss their affairs, finances
     and  accounts  with and to be  advised as to the same by,  their  officers,
     consultants,  counsel and  accountants,  all at such  reasonable  times and
     intervals as such holder may desire.

          (b) Each holder of any  Securities  agrees by its  acceptance  thereof
     that any non-public information concerning the Companies which is furnished
     by the Holding  Company to such holder pursuant to this Agreement or any of
     the other Operative Documents  (collectively,  "Confidential  Information")
     shall be kept  confidential  by such holder in accordance  with  procedures
     adopted by such holder in good faith to protect confidential information of
     third  parties.  The term  "Confidential  Information"  shall not  include,
     however, any information which (x) was publicly known or otherwise known to
                                     -
     any holder at the time of  disclosure  by any  Company to any  holder;  (y)
                                                                              -
     subsequently  becomes  publicly  known  through no act or  omission  of any
     holder  or any  agent of any  holder  or (z)  becomes  known to any  holder
                                               -
     otherwise  than  through  disclosure  by any Company.  Notwithstanding  the
     foregoing,   each  holder  of  any  Securities  may  disclose  Confidential
     Information:  (i) with the consent of the Holding  Company (which shall not
                    -
     be  unreasonably  withheld  or  delayed);  (ii)  when  required  by  law or
                                                 --
     regulation;  (iii) in any report,  statement or testimony submitted by such
                   ---
     holder to any regulatory body having or claiming to have  jurisdiction over
     such holder; (iv) to the National Association of Insurance Commissioners or
                   --
     any similar  organization  or to any rating  agency;  (v) to the  officers,
                                                            -
     directors,  employees, agents, representatives and professional consultants
     of such holder and of such holder's Affiliates who have a need to know such
     information;  (vi) in connection  with the  preservation,  exercise  and/or
                    --
     enforcement of any of such holder's rights or remedies under this Agreement
     and  the  other   Operative   Documents;   (vii)  in  connection  with  any
                                                 ---
     contemplated  transfer of any of the Securities  held by such holder to any
     institutional  investor or financial  institution (so long as the recipient
     of such information  agrees to keep such information  confidential on terms
     substantially similar to those set forth in this section 8(b)); (viii) in a
                                                                      ----
     response to any summons,  subpoena or other legal  process or in connection
     with any  judicial or  administrative  proceeding  or  inquiry;  or (ix) to
                                                                          --
     correct  any  false or  misleading  information  which  may  become  public
     concerning the relationship of such holder to the Holding Company or any of
     its Subsidiaries and/or the transactions contemplated hereby.

                                      -20-
<PAGE>

          (c)  Notwithstanding  anything to the contrary contained herein,  upon
     the request of any holder of any  Securities to such effect,  the Companies
     shall   immediately   cease   furnishing  to  such  holder  any  non-public
     information concerning the Companies.

9.   Prepayment of Notes.
     -------------------

     9.1.  Required  Prepayment  Without Premium of Notes. In addition to paying
           ----------------------------------------------
the entire outstanding  principal amount of and the interest due on the Notes on
the maturity date thereof,  on August 31, 2005 the Companies will prepay without
premium the greater of (a) $10,000,000  aggregate  principal amount of the Notes
                        -
and (b)  one-half  of the then  outstanding  aggregate  principal  amount of the
     -
Notes. No partial  prepayment of the Notes pursuant to section 9.2 or 9.3 or any
other provision of this Agreement shall alter the obligation of the Companies to
make the required prepayment provided for in this section 9.1.

     9.2.  Optional Prepayment  Without Premium of Notes From Proceeds of Public
           ---------------------------------------------------------------------
Offering.  At any time, the Companies  may, at their option,  upon notice as set
--------
forth  in  section  9.6,  prepay  without  premium  up to  $5,000,000  aggregate
principal amount of the Notes, provided that such prepayment is made at the time
                               --------
of the closing of an  underwritten  public  offering of Common Stock  registered
under the  Securities  Act in which the  aggregate  net  proceeds to the Holding
Company is at least $10,000,000.

     9.3.  Optional  Prepayment With Premium of Notes. At any time and from time
           ------------------------------------------
to time, the Companies may at their option,  upon notice as set forth in section
9.6,  prepay all or any part of the Notes (in an  integral  multiple of $500,000
and a minimum of $500,000 or such lesser  principal amount thereof as shall then
be  outstanding);  provided that the Companies  concurrently  pay a premium (the
                   --------
"Applicable  Premium")  equal  to (a) in the case of any  prepayment  made on or
                                   -
before  August  31,  2002,  the  Make  Whole  Amount  and (b) in the case of any
                                                           -
prepayment  made after August 31, 2002, a percentage of the principal  amount to
be prepaid, such percentage to be that set forth in the following table opposite
the period in which the date fixed for such prepayment occurs:

           Period                                      Percentage
           ------                                      ----------

      September 1, 2002 through August 31, 2003          3.00%
      September 1, 2003 through August 31, 2004          2.00%
      September 1, 2004 through August 31, 2005          1.00%
      September 1, 2005 and thereafter                   0.00%

                                      -21-
<PAGE>

     9.4.  Prepayment  Without  Premium of the Notes at the Option of Holders of
           ---------------------------------------------------------------------
the Notes upon a Change of Control.
----------------------------------

          (a) If any Change of  Control is to occur,  then not less than 30 days
     nor more than 60 days prior to the  occurrence  of such  Change of Control,
     the Companies  will notify each holder of any Notes of such pending  Change
     of Control and the date upon which it is  scheduled  to occur.  Each notice
     from the Companies pursuant to this section 9.4 to each holder of any Notes
     shall make explicit  reference to this section 9.4 and shall state that the
     right of any holder of the Notes  then  outstanding  to require  prepayment
     thereof must be exercised within 30 days of the receipt of such notice.

          (b) If any  holder  of the  Notes  furnishes  a  written  request  for
     prepayment  to the  Companies  not more than 30 days after  receipt by such
     holder of such notice of such  Change of Control  from the  Companies,  the
     Companies  will prepay  without  premium all (but not less than all) of the
     Notes then held by such  holder  outstanding.  Each such  prepayment  shall
     occur on the date upon which  such  Change of  Control  occurs,  unless the
     Companies  and such holder of the Notes  agree to a different  date or such
     holder revokes such request,  and no prepayment  requested pursuant to this
     section  9.4 shall be due  unless  such  Change  of  Control  shall  occur.
     Immediately  following  receipt of any such written  request for prepayment
     from any holder of Notes, the Companies shall send a copy of such notice to
     each other holder of any Notes at the time outstanding.

     9.5.  Allocation  of  Partial  Prepayments  of  Notes.  In the case of each
           -----------------------------------------------
partial prepayment of the Notes under this section 9, the principal amount to be
prepaid  shall be  allocated  among  all of the  Notes  at the time  outstanding
(excluding  any Notes at the time owned by the Companies or any Affiliate of the
Companies) in proportion,  as nearly as  practicable,  to the respective  unpaid
principal  amounts thereof,  with  adjustments,  to the extent  practicable,  to
compensate for any prior prepayments not made exactly in such proportion.

     9.6.  Notice  of  Optional  Prepayments  of  Notes.  In the  case  of  each
           --------------------------------------------
prepayment  under  sections 9.2, 9.3 and 9.4, the  Companies  shall give written
notice  thereof to each holder of any Notes not less than 30 (10, in the case of
any prepayment  under section 9.4) nor more than 60 days prior to the date fixed
for such  prepayment.  Each such notice shall set forth:  (a) the date fixed for
                                                           -
prepayment;  (b) the aggregate  principal  amount of Notes to be prepaid on such
              -
date; and (c) the aggregate  principal amount of Notes held by such holder to be
           -
prepaid on such date and the amount of accrued interest and an estimation of the
premium,  if any,  to be paid to such  holder  on such date  (together  with the
calculation of such premium,  if any, which  calculation must be satisfactory to
each holder of Notes).

                                      -22-
<PAGE>

     9.7.  Maturity; Accrued Interest;  Surrender, etc. of Notes. In the case of
           -----------------------------------------------------
each  prepayment  of all or any part of any  Note,  the  principal  amount to be
prepaid  shall  mature  and  become  due and  payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the  premium,  if any,  due  thereon.  Any  Note  prepaid  in full  shall be
surrendered  to the  Companies  at the  Companies'  principal  place of business
promptly  following  prepayment  and canceled and shall not be reissued,  and no
Note shall be issued in lieu of any prepaid principal amount of any Note.

     9.8.  Purchase of Notes.  The  Companies  will not, and will not permit any
           -----------------
Affiliate of the  Companies  to,  directly or  indirectly,  prepay,  purchase or
otherwise  acquire,  or offer to prepay,  purchase  or  otherwise  acquire,  any
outstanding  Notes except by way of payment or prepayment in accordance with the
provisions of the Notes and this Agreement.

     9.9.  Payment on  Non-Business  Days. If any amount  hereunder or under the
           ------------------------------
Notes shall become due on a day which is not a Business  Day, such payment shall
be due on the next succeeding Business Day.

     9.10. Application  of Notes in  Satisfaction of Exercise Price of Warrants.
           --------------------------------------------------------------------
In the event that any holder of any Note shall  apply all or any  portion of the
principal  amount  of such  Notes in  satisfaction  (in whole or in part) of the
payment  of the  Exercise  Price  (as  defined  in the  Warrants),  any  partial
application  of the  principal  amount of any such Note  shall be applied to the
payment of  installments  of principal  due  thereunder  in the inverse order of
maturity.

10.  Subordination  of Notes.  Notwithstanding  anything to the contrary in this
     -----------------------
Agreement or any of the other Operative Documents, payments on the Notes and the
rights of the holders of the Notes, are subordinate,  to the extent specified in
the Notes, to Superior  Indebtedness  (as such term is defined in the Notes) and
to the rights of the holders of Superior Indebtedness, notwithstanding that none
of the holders of the Notes have executed the Notes.  In addition,  with respect
to this section 10 and each of the other  provisions of this Agreement,  if any,
which relate to the  subordination  of the Notes to Superior  Indebtedness,  the
holders of the Superior Indebtedness,  including,  without limitation, Fleet and
its  successors and assigns under and with respect to the Fleet  Documents,  are
third-party beneficiaries.

11.  Registration and Co-Sale Rights, Drag-Along Obligations,  etc. Reference is
     --------------------------------------------------------------
hereby made to the Registration Rights Agreement for certain provisions relating
to, among other  things,  the  registration  and co-sale  rights and  drag-along
obligations of the holders of the Warrants and Warrant Shares.

                                      -23-
<PAGE>

12.  Put and Call Rights.
     -------------------

     12.1. Put Rights with Respect to Warrants and Warrant Shares.
           ------------------------------------------------------

          (a) The Required  Holders of the Warrants and Warrant Shares (the "Put
     Securities")  shall have the right to require the Companies to purchase all
     (but not less than all) of the Put Securities at the time  outstanding  (i)
                                                                              -
     at any time when the Common Stock is not "actively  traded"  (determined as
     provided below) on the New York Stock Exchange, the American Stock Exchange
     or the Nasdaq  National Market System or (ii)  concurrently  with or at any
                                               --
     time after the  acceleration  of the Notes or the occurrence of an Event of
     Default  of the kind  referred  to in  section  16.1(m),  in each case at a
     purchase price equal to the Put Price for the Put Securities.  The Required
     Holders  shall  exercise such right by delivering to the Companies a notice
     (a "Put Notice")  specifying that the Put Securities are to be purchased by
     the  Companies.  Upon receipt of such Put Notice,  the  Companies  shall be
     obligated to purchase the Put Securities on the later of (i) the first date
                                                               -
     upon  which  the  Common  Stock  is not so  "actively  traded"  on any such
     aforementioned  exchange  or  market  system or the date  upon  which  such
     acceleration or Event of Default shall occur,  as applicable,  and (ii) the
                                                                         --
     15th day  following the date of receipt by the Companies of such Put Notice
     (each,  the "Put Closing  Date"),  unless in any case the Companies and the
     Required  Holders agree to a different date.  Promptly after receipt by the
     Companies of a Put Notice,  the Companies  will notify each other holder of
     any Securities of receipt of such Put Notice and  thereafter  shall furnish
     to each holder of any Securities such  information  relating to the same as
     any holder of  Securities  may  reasonably  request from time to time.  The
     Companies  will notify each holder of any  Securities of the  occurrence of
     any event which will,  or could  reasonably  be expected to,  result in the
     Common Stock no longer being "actively  traded" on any such  aforementioned
     exchange  or  market  system  at least 30 days  (but not more than 60 days)
     prior to the  occurrence of such event.  For purposes of this section 12.1,
     the Common Stock shall be deemed to not be "actively traded" if on any date
     of determination  there shall have been a period of 25 consecutive  trading
     days  ended not more than 50 days  prior to such date of  determination  in
     which the average  daily  trading  volume of the Common Stock was less than
     3,000  shares  (adjusted  appropriately  for any stock  splits,  dividends,
     combinations and the like).

          (b) Notwithstanding anything to the contrary contained in this section
     12.1, if the Companies are unable to pay in full in cash on any Put Closing
     Date the full amount then due to each holder of Put Securities  pursuant to
     this section 12 without  violating  applicable  law, then (i) the Companies
                                                                -
     shall use their  commercially  reasonable  efforts to obtain  financing for
     such  payment and to obtain all  necessary  consents  and waivers to permit
     such payment; (ii) until such payment shall have been paid in full in cash,
                    --
     the Holding Company shall not, and shall not permit any of its Subsidiaries
     to,  directly or  indirectly,  make any

                                      -24-
<PAGE>

     Restricted  Payment or Restricted  Investment;  (iii) the  Companies  shall
                                                      ---
     furnish  to  each  holder  of  Put  Securities  an  Officer's   Certificate
     specifying (A) the nature of the event or condition on account of which the
                 -
     Companies are so precluded from making such payment and (B) the action that
                                                              -
     the  Companies  are  taking to  remedy  such  failure;  and (iv) on the Put
                                                                  --
     Closing  Date and on the last day of each month  following  the Put Closing
     Date,  each Company shall pay the largest  portion of the unpaid balance of
     such payment  (including all accrued interest thereon) that it may then pay
     without causing any such violation,  such payment to be allocated among the
     holders of the Put  Securities in proportion to the aggregate  amounts then
     due to each such holder pursuant to this section 12.

          (c) The  obligation  of the  Companies  to pay the Put Price is hereby
     subordinated to the payment of the Superior Indebtedness (as defined in the
     Notes) upon the terms of subordination  set forth in the Notes as in effect
     on  the  Closing  Date  (which  terms  are  incorporated   herein  by  this
     reference),  and,  for  such  purposes,  all  references  in such  terms of
     subordination (i) to "Subordinated  Indebtedness" shall mean the payment of
                    -
     the Put Price due  pursuant  to this  section,  and (ii) to "holders of the
                                                          --
     Subordinated Indebtedness" shall mean the holders of the Put Securities.

     12.2. Call Rights with Respect to the Warrants.
           ----------------------------------------

          (a) The Companies shall have the right to reduce the aggregate  number
     of Warrant  Shares  issuable  upon exercise of the Warrants from 690,134 to
     598,116   (adjusted   appropriately   for  any  stock  splits,   dividends,
     combinations  or the like) (or a  proportionate  reduction if, at the time,
     the  MassMutual  Investors  shall  not hold all of the  Warrants  initially
     issued to them) (the Warrant  Shares of such  reduction  being  hereinafter
     called the "First Call  Shares")  upon  payment (in  immediately  available
     funds) of an amount  (the  "First Call  Price")  equal to (x) the  Exercise
                                                                -
     Price (as defined in the Warrants)  multiplied by (y) the aggregate  number
                                         -------------  -
     of First Call  Shares;  provided  that on the date of such  payment,  for a
                             --------
     period of not less than 20 consecutive  trading days ended not more than 10
     days  prior to the date of such  payment,  the daily  closing  price of the
     Common Stock  (determined  as provided in the  definition of Current Market
     Price  in the  Warrants)  on each  day of such  20-day  period  shall  have
     exceeded  $25.00 per share  (adjusted  appropriately  for any stock splits,
     dividends, combinations or the like).

          (b) In addition  to the right under  section  12.2(a),  the  Companies
     shall  have the right to reduce  the  aggregate  number of  Warrant  Shares
     issuable upon  exercise of the Warrants  from 598,116 to 506,098  (adjusted
     appropriately  for any stock splits,  dividends,  combinations or the like)
     (or a  proportionate  reduction if, at the time, the  MassMutual  Investors
     shall not hold all of the Warrants  initially  issued to them) (the Warrant
     Shares of such reduction being hereinafter called the "Second Call Shares")
     upon  payment (in  immediately  available  funds) of an

                                      -25-
<PAGE>

     amount (the "Second Call Price")  equal to equal to (x) the Exercise  Price
                                                          -
     (as defined in the  Warrants)  multiplied  by (y) the  aggregate  number of
                                    --------------  -
     Second Call Shares; provided that on the date of such payment, for a period
                         --------
     of not less than 20  consecutive  trading  days ended not more than 10 days
     prior to the date of such  payment,  the daily  closing price of the Common
     Stock  (determined  as provided  above) on each day of such  20-day  period
     shall have exceeded $30.00 per share (adjusted  appropriately for any stock
     splits, dividends, combinations or the like).

          (c) Notwithstanding anything to the contrary in this section 12.2, the
     Companies  shall not have any right to reduce the number of Warrant  Shares
     issuable upon exercise of the Warrants, unless (i) the payment of the First
                                                     -
     Call Price or the Second Call Price,  as applicable,  is paid in full on or
     before August 31, 2004, (ii) the Warrants shall have been fully exercisable
                              --
     by the  MassMutual  Investors on each day of the  applicable  20-day period
     referred  to in  section  12.2(a)  or  12.2(b),  (iii) the  Warrant  Shares
                                                       ---
     issuable upon exercise of the Warrants  shall have been freely  tradable by
     the  MassMutual  Investors  during such 20-day  period,  (iv) after  giving
                                                               --
     effect to such  purchase,  no Default or Event of Default shall exist,  (v)
                                                                              -
     the First Call Price or the Second Call Price,  as applicable,  may be paid
     in full in cash without violating any agreement, document, instrument, law,
     statute,  rule or  regulation  to which any Company is subject and (vi) the
                                                                         --
     average daily trading  volume of the Common Stock during such 20-day period
     was at least 50,000 shares  (adjusted  appropriately  for any stock splits,
     dividends,  combinations or the like). In addition, the Companies shall not
     have any right to  reduce  the  number  of  Warrant  Shares  issuable  upon
     exercise  of any  Warrants  held by any Person  other  than the  MassMutual
     Investors  or to purchase or otherwise  acquire any Warrant  Shares held by
     any Person (including, without limitation, any MassMutual Investor).

          (d) The Companies  shall exercise their rights under this section 12.2
     by delivering to the MassMutual  Investors a notice (the "Call Notice") (i)
                                                                              -
     specifying  the  applicable  reduction in the  aggregate  number of Warrant
     Shares as a result thereof and the aggregate  amount to be paid pursuant to
     section  12.2(a) or 12.2(b),  as the case may be, in connection  therewith,
     (ii)  setting  forth in  reasonable  detail all  calculations  necessary to
      --
     demonstrate  the  accuracy  of such  figures  and  (iii)  certifying  as to
                                                         ---
     compliance  with all  conditions of this section 12.2. The reduction in the
     aggregate  number of  Warrant  Shares on account  of any such  exercise  of
     rights under this section 12.2 by the  Companies  shall be allocated  among
     the Warrants  then held by each  MassMutual  Investor in  proportion to the
     respective  numbers  of  Warrant  Shares  issuable  upon  exercise  of such
     Warrants and the aggregate amount to be paid in connection  therewith shall
     be paid to the MassMutual Investors in the same proportions.  Upon giving a
     Call Notice,  the  Companies  shall be obligated to pay in full in cash the
     First Call Price or the Second Call Price,  as  applicable,  not later than
     the tenth day after such Call

                                      -26-
<PAGE>

     Notice  is so  given  by  the  Companies,  unless  the  Companies  and  the
     MassMutual Investors agree to a different date.

     12.3. Closing.  The closing for any payment due to any holder of Securities
           -------
to be  purchased  under this section 12 shall occur at the  principal  office of
such holder, unless the Companies and such holder agree to a different location.
Such payment shall be paid in immediately  available  funds against  delivery of
the  certificates  evidencing  such  Securities as are to be purchased from such
holder at such closing.

     12.4. No Waivers, etc. No failure on the part of any holder of any Warrants
           ----------------
or Warrant  Shares to exercise  any right under this  section 12 shall affect or
impair  any  other  right  of such  holder,  in  respect  of the  Securities  or
otherwise, or any right of any other holder of any Securities,  under any of the
Operative  Documents.  The covenants contained in this section 12 shall continue
in effect so long as any Warrants  and/or Warrant Shares are  outstanding or any
amount may be payable  pursuant hereto and,  without  limiting the generality of
the foregoing,  shall survive the payment,  prepayment and/or replacement of any
other Securities and any merger, consolidation, recapitalization, sale of assets
or other similar  transaction or event involving any of the Companies and/or any
of their respective Subsidiaries.

13.  Board Visitation  Rights.  The Required Holders of each class of Securities
     ------------------------
shall have the right, as a group, to appoint one  representative  who shall: (a)
                                                                              -
receive  notice of all  meetings  (both  regular  and  special)  of the board of
directors (or other  governing  body) of the Holding  Company and each committee
thereof  (such  notice to be  delivered  or mailed at the same time as notice is
given to the  members of any such board  and/or  committee);  (b) be entitled to
                                                               -
attend (or, at the option of such representative, monitor by telephone) all such
meetings; (c) receive all notices, information,  reports and written consents in
           -
lieu of meetings  which are  furnished  to the members of any such board  and/or
committee  at the same time and in the same manner as the same is  furnished  to
such members and (d) receive as soon as  available  copies of the minutes of all
                  -
such  meetings.  Such  representative  shall not constitute a member of any such
board  and/or  committee  and  shall  not be  entitled  to vote  on any  matters
presented  at meetings of any such board  and/or  committee or to consent to any
matter as to which the consent of the members of any such board and/or committee
shall have been requested.

14.  Covenants  of the  Holding  Company.  From  and  after  the  date  of  this
Agreement,  and thereafter so long as any of the Notes shall remain outstanding,
the  Holding  Company  will duly  perform  and  observe,  for the benefit of the
holders of the Notes,  each and all of the covenants and agreements  hereinafter
set forth,  provided that, so long as any of the Warrants  and/or Warrant Shares
            --------
are outstanding, the Holding Company will also duly perform and observe, for the
benefit of the holders of the  Warrants  and Warrant  Shares (as well as for the
benefit of the holders of the Notes),  the covenants and agreements set forth in
section 14.10:

                                      -27-
<PAGE>

     14.1. Books of Record and Account;  Reserves. The Holding Company will, and
           --------------------------------------
will cause each of its  Subsidiaries  to (a) at all times keep  proper  books of
                                          -
record and account in which full,  true and correct entries shall be made of its
transactions  in  accordance  with GAAP and (b) set aside on its books  from its
                                             -
earnings  for each fiscal year all such proper  reserves as shall be required in
accordance with GAAP in connection with its business.

     14.2. Payment of Taxes;  Existence;  Maintenance of Properties;  Compliance
           ---------------------------------------------------------------------
with Laws; Lines of Business;  Proprietary Rights. The Holding Company will, and
-------------------------------------------------
will cause each of its Subsidiaries to:

          (a) timely pay and discharge (i) all income and other material  taxes,
                                        -
     assessments  and  governmental  charges or levies imposed upon its property
     and (ii) all lawful claims that, if unpaid, might by law become a Lien upon
          --
     its property;  provided that the Holding Company and its Subsidiaries shall
                    --------
     not be required  pursuant to this section 14.2 (a) to pay or discharge  any
     such tax, assessment, charge or claim that is being contested in good faith
     and  by  appropriate  proceedings  diligently  conducted  and  as to  which
     reserves or other appropriate  provisions therefor have been established in
     accordance with GAAP;

          (b) preserve and maintain, its existence, legal structure, legal name,
     rights (charter and statutory),  permits, licenses,  approvals,  privileges
     and  franchises,  except to the extent  that the failure to do so could not
     reasonably be expected to result in Material Adverse Change;

          (c) maintain and preserve,  all of its properties  that are reasonably
     necessary  in the  conduct  of its  business  in  good  working  order  and
     condition, ordinary wear and tear excepted;

          (d) comply,  in all  respects,  with all  applicable  laws,  statutes,
     rules,  regulations and orders, except to the extent that the failure to do
     so could not reasonably be expected to result in Material Adverse Change;

          (e)  engage  only in the  Business  (and in other  lines  of  business
     related to the Business)  substantially in the manner heretofore  conducted
     and keep a majority of its assets in the United States of America; and

          (f) own or have a valid  license for all material  Proprietary  Rights
     and Licenses used by it in the conduct of its business.

     14.3. Insurance.  The  Holding  Company  will,  and will cause each  of its
           ---------
Subsidiaries  to,  maintain  with  financially  sound  and  reputable  insurers,
insurance with respect to its  properties and businesses  against loss or damage
of the kinds  customarily  insured against by Persons of established  reputation
engaged in the same or a similar

                                      -28-
<PAGE>

business and similarly situated, in such amounts and by such methods as shall be
customary  for such  Persons  and  reasonably  deemed  adequate  by the  Holding
Company.

     14.4. Limitation on Discount or Sale  of  Receivables.  The Holding Company
           -----------------------------------------------
will  not,  and  will  not  permit  any  of its  Subsidiaries  to,  directly  or
indirectly,  discount or sell any of their  accounts  receivable,  except (a) to
                                                                           -
settle,  collect or compromise  doubtful accounts or to grant discounts (such as
quantity or prompt payment discounts) in the ordinary course of business and (b)
                                                                              -
to engage in factoring  activities  of accounts  receivable  arising in European
operations in a manner  consistent  with their past practices and upon terms and
conditions in all material respects substantially similar to those heretofore in
effect,  provided that (i) all Debt incurred in connection  with such  factoring
         --------       -
activities is permitted  under section 14.5,  (ii) any disposition of properties
                                               --
in connection therewith is permitted under section 14.15, (iii) both at the time
                                                           ---
of and  immediately  after  giving  effect  to  the  consummation  of  any  such
factoring,  no Default or Event of Default  shall  exist and (iv) the  aggregate
outstanding  obligations  (direct,  contingent or otherwise) of the Companies in
connection  with such factoring  activities  shall not exceed  $2,000,000 at any
time.

     14.5. Limitation on Debt. The Holding Company will not, and will not permit
           ------------------
any of its Subsidiaries to, be liable or create, assume, incur, guarantee, or in
any manner become  liable,  contingently  or  otherwise,  in respect of any Debt
other than:

          (a) Debt evidenced by the Notes;

          (b) Debt outstanding on the date hereof and referred to in Exhibit 5.9
                                                                     -----------
     attached hereto;

          (c) Debt in addition to that permitted  under section 14.5(a) and (b),
     including, without limitation, any Debt incurred under the Fleet Agreement,
     provided that, both at the time of and  immediately  after giving effect to
     --------
     the incurrence  thereof and the repayment of any Debt that is  concurrently
     repaid:

               (i) the  ratio of  Consolidated  Debt on such  date to Pro  Forma
          Consolidated  Cash  Flow for the  period  of four  consecutive  fiscal
          quarters  ended on or most recently prior to such date does not exceed
          the  applicable  ratio set forth  below for the  period in which  such
          incurrence shall occur:

               Period                                     Ratio
               ------                                     -----

          Closing Date through August 31, 2001         4.75 to 1.00
          September 1, 2001 through August 31, 2002    4.50 to 1.00
          From and after September 1, 2002             4.25 to 1.00;

                                      -29-
<PAGE>

               (ii) the ratio of  Consolidated  Senior  Debt on such date to Pro
          Forma Consolidated Cash Flow for the period of four consecutive fiscal
          quarters  ended on or most recently prior to such date does not exceed
          the  applicable  ratio set forth  below for the  period in which  such
          incurrence shall occur:

               Period                                     Ratio
               ------                                     -----

          Closing Date through August 31, 2001         4.00 to 1.00
          September 1, 2001 through August 31, 2002    3.75 to 1.00
          From and after September 1, 2002             3.50 to 1.00; and

               (iii) in the case of any Debt other than Debt incurred  under the
          Fleet Agreement, no Default or Event of Default shall exist; and

          (d) Debt incurred for the extension, refinancing, refunding or renewal
     of any Debt permitted under sections 14.5(a), (b) or (c), provided that (i)
                                                               --------       -
     the aggregate  principal amount of such replacement Debt does not exceed at
     any time that of the Debt then  being  extended,  refinanced,  refunded  or
     renewed,  (ii) the terms of such  replacement  Debt are not in any material
                --
     respect  more   restrictive   upon  the  Holding  Company  or  any  of  its
     Subsidiaries  than  those  of the Debt  then  being  extended,  refinanced,
     refunded  or  renewed  and  (iii)  both  at the  time  of  such  extension,
                                  ---
     refinancing,  refunding  or renewal and  immediately  after  giving  effect
     thereto, no Default or Event of Default shall exist.

For  purposes of this section  14.5,  any Person  becoming a  Subsidiary  of the
Holding Company after the date hereof shall be deemed,  at the time it becomes a
Subsidiary, to have incurred all of its then outstanding  Indebtedness,  and any
Person extending,  refinancing,  refunding or renewing any Indebtedness shall be
deemed  to have  incurred  such  Indebtedness  at the  time  of such  extension,
refinancing, refunding or renewal.

     14.6. Limitation on Restricted  Payments  and Restricted  Investments.  The
           ---------------------------------------------------------------
Holding  Company  will not,  and will not  permit  any of its  Subsidiaries  to,
directly or  indirectly,  make or commit to make any  Restricted  Payment or any
Restricted Investment, unless:

          (a) both at the time of and  immediately  after  giving  effect to the
     proposed Restricted Payment and/or Restricted Investment: (i) no Default or
     Event  of  Default  shall  have  occurred  and be  continuing  and (ii) the
     Companies could incur at least $1 of additional Debt under section 14.5(c);
     and

          (b) on the date of declaration, in the case of any proposed Restricted
     Payment consisting of a dividend, or on the date of payment or distribution
     or of commitment therefor,  whichever comes first, in the case of any other
     proposed

                                      -30-
<PAGE>

     Restricted  Payment and/or any proposed  Restricted  Investment  (each such
     date, as the case may be, being herein called the "Computation  Date"), and
     immediately  after giving effect thereto,  the aggregate amount involved in
     all Restricted  Payments  declared,  in the case of dividends,  and paid or
     distributed or committed for, in the case of all other Restricted  Payments
     and all Restricted Investments,  during the period from and after September
     1, 1999 to and  including  the  Computation  Date does not  exceed  the sum
     (without duplication of amounts) of:

               (i) 15% (or,  in the case of a loss,  minus  100%) of  cumulative
          Consolidated  Net Income for the period  from and after  September  1,
          1999 to and  including  the  last  day of the  fiscal  quarter  of the
          Holding  Company  ended on or most recently  prior to the  Computation
          Date (the "Computation Period");

               (ii) 25% of the net cash proceeds received by the Holding Company
          during the Computation Period from (1) permanent  contributions to the
                                              -
          capital of the Holding Company and (2) the sale by the Holding Company
                                              -
          of its Shares or of any securities convertible into or exchangeable or
          exercisable  for such Shares (if such  securities  have, in fact, been
          converted into or exchanged or exercised for such Shares),  other than
          any Shares of the Holding Company or any other such  securities  which
          are  subject  to  retirement  in  whole  or in part  prior to one year
          following the payment in full in cash of the Notes by either mandatory
          or optional  redemption or through the operation of either a mandatory
          or optional sinking or purchase fund; and

               (iii) the  aggregate  net cash  proceeds  received by the Holding
          Company or any of its Subsidiaries  during the Computation Period from
          the  maturation,  sale or disposition of any  Investments  (other than
          Permitted  Investments) in excess of the aggregate  amount paid by the
          Holding  Company after September 1, 1999 in respect of any Investments
          (other than Permitted Investments).

Notwithstanding the foregoing, the Holding Company will not, and will not permit
any of its  Subsidiaries  to,  become  liable  (contingently  or  otherwise)  in
connection with any Derivative Transaction or make any Investments in connection
with any Derivative Transaction, other than Derivative Transactions entered into
in the ordinary  course of business  solely for the purposes of hedging  against
(as distinct from  speculating  in)  fluctuations in interest rates and currency
exchange rates, in each case upon terms and conditions  reasonably acceptable to
the Required Holders of the Notes.

     14.7. Fixed Coverage Ratio.  The Holding Company will not permit  the ratio
           --------------------
of Pro Forma Consolidated Cash Flow (after restoring thereto any amount deducted
therefrom for Rental Obligations paid under leases other than Capital Leases) to
Pro

                                      -31-
<PAGE>

Forma  Consolidated  Fixed  Charges  for any period of four  consecutive  fiscal
quarters ended during any period  specified below to be less than the applicable
ratio set forth below:

               Period                                     Ratio
               ------                                     -----

         Closing Date through August 31, 2001          2.00 to 1.00
         September 1, 2001 through August 31, 2002     2.25 to 1.00
         From and after September 1, 2002              2.50 to 1.00.

     14.8. Limitation on Tax  Consolidation.  The Holding Company will  not, and
           --------------------------------
will not permit any of its  Subsidiaries to, become a party to a consolidated or
combined  income tax return with any Person  other than the Holding  Company and
its Subsidiaries.

     14.9. Limitation  on Liens.  The Holding  Company  will not,  and will  not
           --------------------
permit any of its Subsidiaries to, create or suffer to exist any Lien in respect
of any property of any character  (whether owned on the date hereof or hereafter
acquired) other than:

          (a) Liens securing Indebtedness of any Subsidiary owing to the Holding
     Company;

          (b) Liens (other than any Lien created by any  Environmental Law or by
     Section 4068 of ERISA),  charges and encumbrances which (i) are incurred in
                                                              -
     the ordinary  course of business and which are incidental to the conduct of
     the business of the Holding Company and its  Subsidiaries and the ownership
     of its and their  property,  (ii) are not incurred in  connection  with the
                                   --
     borrowing of money or the obtaining of advances or credit,  (iii) do not in
                                                                  ---
     the  aggregate  materially  detract  from the value of the  property of the
     Holding Company or its Subsidiaries or materially impair the use thereof in
     the  operation  of its or their  business  and (iv) do not (and  would  not
                                                     --
     reasonably be expected to)  materially  adversely  affect the rights of the
     holders of the Notes;

          (c) any Lien  existing on the date  hereof and  referred to on Exhibit
                                                                         -------
     5.9 attached hereto; and
     ---

          (d) any Lien securing Debt which is permitted under section 14.5.

     14.10. Limitation on Transactions with Affiliates. The Holding Company will
            ------------------------------------------
not, and will not permit any of its  Subsidiaries  to, engage in any transaction
(including, without limitation, the purchase, sale or exchange of any properties
and assets or the  rendering of any  services)  with an Affiliate of the Holding
Company or of any of its  Subsidiaries  on terms less  favorable  to the Holding
Company or any such Subsidiary in any material  respect than would be obtainable
at the time in comparable transactions with a Person not such an Affiliate.

                                      -32-
<PAGE>

     14.11. Joinder of Additional Subsidiaries.  Notwithstanding anything to the
            ----------------------------------
contrary  contained in this Agreement or any of the other  Operative  Documents,
neither the Holding Company nor any of its  Subsidiaries  will acquire,  form or
organize any Subsidiary, unless (a) such additional Subsidiary shall have joined
                                 -
in this Agreement and each of the other applicable Operative Documents to become
a "Company"  and to become  jointly and  severally  liable for the Notes and all
other  obligations  of the  Companies  under  any of  the  Operative  Documents,
pursuant  to a  joinder  agreement  in form and  substance  satisfactory  to the
Required  Holders  of  each  class  of  Securities  and  (b) at the  time of the
                                                          -
execution of such joinder agreement and/or guarantee,  the Holding Company shall
have  delivered  to the holders of the  Securities  an opinion of counsel to the
Holding  Company in form and  substance  reasonably  acceptable  to the Required
Holders of each class of  Securities  as to the  enforceability  of such joinder
agreement and addressing such other related  matters as the Required  Holders of
each  class  of  Securities  may  reasonably  request,  provided  that  no  such
                                                        --------
additional  Subsidiary  shall be obligated  to execute any such  joinder  and/or
guarantee until (x) it shall have become  obligated in respect of any Debt under
                 -
the Fleet  Documents (or any  agreements,  documents or instruments  executed in
connection  with any  extension,  refinancing,  refunding or renewal of the Debt
arising  thereunder),  (y) it (and its  Subsidiaries)  shall own  properties and
                        -
assets  constituting 5% or more of Consolidated  Total Assets or (z) it (and its
                                                                  -
Subsidiaries)  generate  5% or more of  Consolidated  Net  Income for any fiscal
quarter (any  Subsidiary of the kind  described in any of clause (x), (y) or (z)
being herein referred to as a "Significant Subsidiary").

     14.12. Limitation  on  Issuance  and  Sale of  Shares of  Subsidiaries;  No
            --------------------------------------------------------------------
Preferred Shares. The Holding Company will not permit any of its Subsidiaries to
----------------
issue,  sell,  transfer or  otherwise  dispose of any Shares (or any  securities
convertible  into or exercisable or exchangeable  for Shares) of such Subsidiary
or of any other  Subsidiary of the Holding Company except to the Holding Company
or  to  a  Wholly-Owned  Subsidiary,  except  in  connection  with  the  pending
liquidation of Elements (NY) and Elements (SF).

          (b) The  Holding  Company  will not,  and will not  permit  any of its
     Subsidiaries to, authorize, issue or have outstanding any Preferred Shares.

     14.13. Limitation on  Subsidiary's  Consolidation  or Merger.  The Holding
            -----------------------------------------------------
Company  will not permit any of its  Subsidiaries  to  consummate  any merger or
consolidation with any other Person,  provided that, if, both at the time of and
                                      --------
immediately  after giving effect  thereto,  no Default or Event of Default shall
have occurred and be continuing, then, any Subsidiary of the Holding Company may
(a) merge  into the  Holding  Company,  so long as the  Holding  Company  is the
 -
surviving  corporation,  and (b) consummate any merger or consolidation with any
                              -
other  Person,  so long as the  surviving  or resulting  corporation  shall be a
Wholly-Owned  Subsidiary  of the  Holding  Company  and,  in the  event  any new
Subsidiary shall result therefrom,  such new Subsidiary shall have complied with
section 14.11. No  consolidation or merger permitted

                                      -33-
<PAGE>

by this  section  14.13 shall have the effect of  releasing  any Person from any
liability  or  obligation  under this  Agreement  or any of the other  Operative
Documents.

     14.14. Limitation on the  Holding Company's  Consolidation and Merger.  The
            --------------------------------------------------------------
Holding  Company  will not  consolidate  with or merge  into any  other  Person,
provided that the foregoing  restriction does not apply to the  consolidation or
--------
merger of the Holding Company with or into any other Person so long as:

          (a) the successor formed by such consolidation or the survivor of such
     merger,  as the  case  may be (the  "Successor  Corporation"),  shall  be a
     Solvent  corporation  organized  and existing  under the laws of the United
     States of America,  any state  thereof or the District of  Columbia,  shall
     conduct  substantially all of its business and shall keep substantially all
     of its assets in the United  States of America  and whose lines of business
     are related to or not materially different from the Business;

          (b) if the  Holding  Company  is not the  Successor  Corporation,  the
     Successor  Corporation  shall have executed and delivered to each holder of
     Notes its assumption of the due and punctual  performance and observance of
     each  covenant  and  condition  of this  Agreement  and  each of the  other
     Operative  Documents  (pursuant to such agreements and instruments as shall
     be reasonably  satisfactory to the Required Holders of the Notes),  and the
     Holding  Company  shall have caused to be delivered to each holder of Notes
     an opinion of independent  counsel reasonably  satisfactory to the Required
     Holders of the Notes,  to the effect  that all  agreements  or  instruments
     effecting such assumption are legal, valid and binding  obligations of such
     Successor  Corporation  enforceable  against  it in  accordance  with their
     respective terms and covering such other matters as the Required Holders of
     the Notes may reasonably request; and

          (c) immediately after giving effect to such transaction (i) no Default
                                                                   -
     or Event of Default  (calculated  on a pro forma basis,  to the  reasonable
     satisfaction  of the Required  Holders of the Notes, to give effect to such
     transaction)  shall have  occurred and be  continuing  and (ii) the Holding
                                                                 --
     Company or the  Successor  Corporation,  as the case may be, could incur at
     least $1 of additional Debt under section 14.5(c).

No such  consolidation  or merger shall have the effect of releasing the Holding
Company or any Successor  Corporation that shall theretofore have become such in
the  manner  prescribed  in this  section  14.14 from its  liability  under this
Agreement or any of the other Operative Documents.

     14.15. Limitation on Disposition of Property. The Holding Company will not,
            -------------------------------------
and will not permit any of its  Subsidiaries  to, directly or indirectly,  sell,
lease or otherwise dispose of (including by way of any merger,  consolidation or
other  business

                                      -34-
<PAGE>

combination  or  any   sale-leaseback   transaction)  any  of  their  respective
properties and assets (or any right, title or interest  therein),  whether real,
personal  or mixed,  tangible  or  intangible,  including,  without  limitation,
Shares,  securities or Indebtedness of any  Subsidiaries of the Holding Company,
except for:

          (a) sales of inventory in the ordinary course of business;

          (b) any  merger or  consolidation  permitted  under  section  14.13 or
     14.14;

          (c) other sales by the Holding  Company and its  Subsidiaries of their
     respective properties and assets if, in the case of this clause (c), on the
     date of such sale and immediately after giving effect thereto:

               (i) no  Default or Event of Default  shall have  occurred  and be
          continuing; and

               (ii) the book value of all properties and assets sold pursuant to
          this  clause (c) (A) during the  365-day  period  ended on the date of
                            -
          such sale is not more than 10% and (B) during the period commencing on
                                              -
          the  Closing  Date and ended on the date of such sale is not more than
          25%,  of  Consolidated  Total  Assets  as at the end of the then  most
          recently  completed  fiscal  quarter of the Holding  Company for which
          financial statements have been delivered pursuant to section 7;

          (d) sales,  leases,  transfers  or other  dispositions  of obsolete or
     redundant equipment in the ordinary course of business; and

          (e)  the  sale or  discount  of  accounts  receivable  arising  in the
     ordinary course of business in connection  with the settlement,  collection
     or compromise thereof as provided in section 14.4.

If the net proceeds of any sale of properties  and assets are applied within one
year of the date of such sale to (x) the purchase of other properties and assets
                                  -
having a fair market value and  remaining  useful life at least equal to that of
the properties and assets so disposed of and/or (y) the prepayment and permanent
                                                 -
reduction  of the  outstanding  principal  amount  of any Debt  under  the Fleet
Agreement  (or  any  agreement   executed  in  connection  with  any  extension,
refinancing,  refunding or renewal of the Debt under the Fleet Agreement),  then
such sale for the purpose of determining  compliance with section 14.15(c) as of
any  date on or  after  the  proceeds  of such  sale  are so  applied,  shall be
disregarded. In addition, any sale of properties and assets by any Subsidiary to
the Holding Company or to any Wholly-Owned Subsidiary shall be disregarded.

     14.16. Modification  of  Certain  Documents,  Agreements  and  Instruments;
            --------------------------------------------------------------------
Fiscal Year End.  The Holding  Company  will not, and will not permit any of its
---------------
Subsidiaries  to

                                      -35-
<PAGE>

(a) amend,  modify or waive any  material  term,  condition  or provision of its
 -
Organizational   Documents  or  any  of  the  other  agreements,   documents  or
instruments  referred  to in section 4.3 or (b) have a fiscal year which ends on
                                             -
any date other than August 31 in each year.

     14.17. Further Assurances. From time to time hereafter, the Holding Company
            ------------------
will  execute and  deliver,  or will cause to be executed  and  delivered,  such
additional  agreements,  documents and  instruments and will take all such other
actions as any holder or holders  of the Notes may  reasonably  request  for the
purpose  of  implementing  or  effectuating  the  provisions  of  the  Operative
Documents.

15.  Definitions.
     -----------

     15.1. Definitions of Capitalized  Terms.  The terms defined in this section
           ---------------------------------
15.1,  whenever  used in this  Agreement,  shall,  unless the context  otherwise
requires, have the following respective meanings:

     "Affiliate"  of any Person shall mean any other Person  which,  directly or
      ---------
indirectly,  controls or is controlled  by or is under common  control with such
first-mentioned  Person,  or any  individual,  in the case of a Person who is an
individual,  who has a  relationship  by blood,  marriage  or  adoption  to such
first-mentioned  Person not more remote than first cousin, and, without limiting
the  generality  of the  foregoing,  shall  include (a) any Person  beneficially
                                                     -
owning or  holding  5% or more of any class of Voting  Stock or other  Shares of
such first-mentioned Person, (b) any Person of which such first-mentioned Person
                              -
owns or holds 5% or more of any class of Voting  Stock or other  Shares  and (c)
                                                                              -
any  director or officer of such  first-mentioned  Person;  provided  that,  for
                                                            --------
purposes  hereof,  in no event  shall you or any other  institutional  holder of
Securities  be deemed to be an  Affiliate  of the Holding  Company or any of its
Subsidiaries.  For the purposes of this definition,  "control" (including,  with
                                                      -------
correlative  meanings,  the terms  "controlled  by" and  "under  common  control
                                    ----------  --        -----  ------  -------
with"), as used with respect to any Person, shall mean the possession,  directly
----
or  indirectly,  of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of Voting Stock or by
contract or otherwise.

     "Applicable Premium" shall have the meaning specified in section 9.3.
      ---------- -------

     "Business" shall have the meaning specified in section 5.4.
      --------

     "Business  Day" shall mean any day other than a  Saturday,  Sunday or other
      --------  ---
day  which  shall be in  Boston,  Massachusetts  or New  York,  New York a legal
holiday or a day on which banking  institutions therein are authorized by law to
close.

     "Call Notice" shall have the meaning specified in section 12.2.
      -----------

                                      -36-
<PAGE>

     "Capital  Lease"  shall mean any lease or similar  arrangement  which is of
      --------------
such a nature that payment  obligations of the lessee or obligor  thereunder are
required to be capitalized and shown as liabilities upon a balance sheet of such
lessee or obligor  prepared in  accordance  with GAAP or for which the amount of
the asset and liability thereunder as if so capitalized should be disclosed in a
note to such balance sheet.

     "Change of Control" shall mean any event or transaction or series of events
      -----------------
or  transactions  (occurring  for whatever  reason)  following  which any Person
(other than William E. Dye and/or Peter Saad),  together with  "affiliates"  and
"associates"  of such Person within the meaning of Rule 12b-2 of the  Commission
under  the  Exchange  Act,  shall  own  beneficially  or  control,  directly  or
indirectly  (including  beneficial  ownership  resulting from the formation of a
"group"  within the meaning of Rule 13d-5 of the  Commission  under the Exchange
Act),  more than 50% of the  Common  Stock or more than 50% of any other  Voting
Stock of the Holding Company.

     "CIBC Notes" shall have the meaning specified in section 6.
      ----------

     "Closing" and "Closing Date" shall have the respective  meanings  specified
      -------       ------------
in section 3.

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
      ----
to time.

     "Commission" shall mean the Securities and Exchange Commission or any other
      ----------
federal  agency from time to time  administering  the  Securities Act and/or the
Exchange Act.

     "Common Stock" shall mean the Common Stock,  $.01 par value, of the Holding
      ------------
Company as constituted on the Closing Date and any Shares into which such Common
Stock shall have been changed or any Shares resulting from any  reclassification
of the Common Stock.

     "Company" and "Companies" shall have the respective  meanings  specified at
      -------       ---------
the beginning of this Agreement.

     "Computation  Date" and  "Computation  Period"  shall  have the  respective
      -----------------        -------------------
meanings specified in section 14.6.

     "Consolidated"  shall mean  consolidated  for the  Holding  Company and its
      ------------
Subsidiaries  in accordance  with GAAP, and after giving  appropriate  effect to
outside minority interests, if any, in Subsidiaries.

     "Debt" of any Person shall mean, without duplication,  (a) all indebtedness
      ----                                                   -
of such Person for borrowed  money,  (b) all  obligations of such Person for the
                                      -
deferred purchase

                                      -37-
<PAGE>

price of property or services (including,  without limitation,  deferred payment
and "earn-out"  obligations  arising in connection  with  acquisitions  of other
Persons and businesses),  (c) all obligations of such Person evidenced by notes,
                           -
bonds,  debentures or other similar  instruments,  (d) all  obligations  of such
                                                    -
Person created or arising under any  conditional  sale or other title  retention
agreement  with  respect to property  acquired by such Person  (even  though the
rights and remedies of the seller or lender under such agreement in the event of
default  are  limited  to  repossession  or  sale  of  such  property),  (e) all
                                                                          -
obligations of such Person as lessee under Capital Leases,  (f) all obligations,
                                                             -
contingent or otherwise,  of such Person in respect of Derivative  Transactions,
letters of credit or similar  facilities,  (g) all obligations of such Person to
                                            -
purchase,  redeem,  retire,  defease or otherwise make any payment in respect of
any capital stock of or other ownership or profit interest in such Person or any
other Person or any warrants,  rights or options to acquire such capital  stock,
(h) all Debt of others  referred  to in clauses  (a) through (g) above or clause
 -
(i) below guaranteed  directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (A)
                                                                              -
to pay or  purchase  such Debt or to advance or supply  funds for the payment or
purchase  of such  Debt,  (B) to  purchase,  sell or lease (as lessee or lessor)
                           -
property, or to purchase or sell services, primarily for the purpose of enabling
the  debtor to make  payment  of such Debt or to assure  the holder of such Debt
against loss, (C) to supply funds to or in any other manner invest in the debtor
               -
(including any agreement to pay for property or services irrespective of whether
such  property is received or such  services are  rendered) or (D)  otherwise to
                                                                -
assure a creditor  against  loss and (i) all Debt  referred  to in  clauses  (a)
                                      -
through (h) above of another  Person secured by (or for which the holder of such
Debt has an existing right,  contingent or otherwise, to be secured by) any Lien
on  property  (including,  without  limitation,  accounts,  contract  rights  or
inventory)  owned by such  Person,  even  though  such Person has not assumed or
become liable for the payment of such Debt.

     "Default"  shall mean any  condition or event which  constitutes  or, after
      -------
notice or lapse of time or both, would constitute an Event of Default.

     "Derivative  Transactions"  shall  mean  (a) any  rate,  basis,  commodity,
      ----------  ------------                 -
currency,  debt or equity swap, (b) any cap, collar or floor agreement,  (c) any
     `                           -                                        -
rate, basis, commodity,  currency, debt or equity exchange or forward agreement,
(d) any rate, basis,  commodity,  currency, debt or equity option, (e) any other
 -                                                                  -
similar  agreement,  (f) any option to enter into any of the foregoing,  (g) any
                      -                                                   -
master  agreement or other agreement  providing for any of the foregoing and (h)
                                                                              -
any combination of any of the foregoing. For the purposes of this Agreement, the
amount of the obligation  outstanding (and deemed incurred) under any Derivative
Transaction,  as of any date, shall be the amount  determined in respect thereof
as of the end of the then most  recently  ended  fiscal  quarter of such Person,
based on the assumption that such  Derivative  Transaction had terminated at the
end of such fiscal quarter,  and in making such determination,  if any agreement
relating  to such  Derivative  Transaction  provides  for the netting of amounts
payable by and to such Person  thereunder or if any such agreement  provides for
the  simultaneous

                                      -38-
<PAGE>

payment of amounts by and to such Person,  then in each such case, the amount of
such obligation shall be the net amount so determined.

     "Disclosure   Document"  shall  mean  the  Confidential  Private  Placement
      ----------   --------
Memorandum  dated June 1999 prepared by the Holding  Company with the assistance
of Fleet Corporate Finance.

     "EBITDA" of any Person,  shall mean, for any period, the sum, determined on
      ------
a Consolidated basis without  duplication,  of (a) net income (or net loss), (b)
                                                -                             -
interest  expense,  (c)  income  tax  expense,  (d)  depreciation  expense,  (e)
                     -                           -                            -
amortization  expense,  (f) non-cash charges, (g) the legal and accounting costs
                         -                     -
and other reasonable expenses incurred in connection with any acquisition of any
Person or business  completed after the date of this Agreement and in compliance
with the  provisions of this  Agreement,  in each case  determined in accordance
with GAAP for such period and (h) other non-recurring,  non-operating  expenses,
                               -
including,  without limitation,  restructuring expenses; provided, however, that
                                                         --------
net  income  (or  net  loss)  shall  be  computed   without   giving  effect  to
extraordinary losses or gains; provided, further, that EBITDA shall in any event
                               --------  -------
exclude the amount of any non-cash income recognized during any period for which
EBITDA is determined.

     "Elements  (SF)" shall mean  Unidigital  Elements  (SF),  Inc.,  a Delaware
      --------   --
corporation, and any successor thereto.

     "Elements  (UK)"  shall  mean  Elements  (UK)  Limited,  a  United  Kingdom
      --------   --
corporation, and any successor thereto.

     "Environmental Laws" shall mean any law, statute, rule, regulation or other
      ------------- ----
governmental   standard  or  requirement  relating  or  pertaining  to  (a)  the
                                                                         -
generation,  manufacture,   management,  handling,  use,  sale,  transportation,
treatment,  storage, disposal,  delivery,  discharge, release or emission of any
waste, pollutant or toxic,  hazardous or other substance,  or (b) any other act,
                                                               -
omission or condition  affecting or involving  the  environment  or air or water
pollution or soil or groundwater contamination.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
      -----
amended from time to time, and the regulations and rulings thereunder.

     "ERISA  Affiliate"  shall  mean  each  trade or  business  (whether  or not
      -----  ---------
incorporated)  that,  together with the Holding  Company,  would be treated as a
single  employer under section  4001(b) of ERISA, or that is a member of a group
of which the Holding  Company is a member and that is a controlled  group within
the meaning of section 4971(e)(2)(B) of the Code.

     "Event of Default" shall have the meaning specified in section 16.1.
      ----- -- -------

                                      -39-
<PAGE>

     "Exchange Act" shall mean the Securities  Exchange Act of 1934, as amended,
      -------- ---
or  any  successor  federal  statute,  and  the  rules  and  regulations  of the
Commission promulgated thereunder,  all as the same shall be in effect from time
to time.

     "Family", as applied to any individual, shall mean (a) the children of such
                                                         -
first-mentioned  individual (by birth or adoption),  (b) the parents, spouse and
                                                      -
siblings  of such  first-mentioned  individual,  (c) any  trust  solely  for the
                                                  -
benefit of or any partnership,  limited  liability company or other entity owned
solely by any one or more of such  aforementioned  individuals  (so long as such
first-mentioned  individual  has the  exclusive  right to control  such trust or
other entity) and (d) the estate of such first-mentioned individual.
                   -

     "First  Call  Price"  and "First  Call  Shares"  shall have the  respective
      -----  ----  -----
meanings specified in section 12.2.

     "Fixed Charges" of any Person shall mean, for any period,  the sum (without
      ----- -------
duplication of amounts) of (a) all cash Interest Charges of such Person for such
                            -
period and (b) all Rental  Obligations of such Person for such period in respect
            -
of leases other than Capital Leases,  in each case determined in accordance with
GAAP.

     "Fleet" shall mean Fleet Bank, N.A.
      -----

     "Fleet Agreement" shall mean the Credit Agreement dated as of May 12, 1999,
      ----- ---------
as amended by Amendment  No. 1 dated July 23,  1999,  by and between the Holding
Company and the banks,  financial  institutions and other institutional  lenders
named therein, as further amended, modified and supplemented from time to time.

     "Fleet  Documents" shall mean the Fleet Agreement and the other agreements,
      -----  ---------
documents and instruments related thereto, as amended, modified and supplemented
from time to time.

     "GAAP" shall mean generally accepted accounting  principles as in effect in
      ----
the United States from time to time, consistently applied.

     "Guarantee"  of any Person shall mean, at any date,  any obligation of such
      ---------
Person at such date  guaranteeing,  directly or  indirectly,  any  Indebtedness,
liability  or other  obligation  of any other  Person in any manner,  but in any
event  including all  endorsements  (other than for collection or deposit in the
ordinary  course of business),  all discounts with recourse and all  obligations
incurred  through an agreement,  contingent  or  otherwise,  (a) to purchase the
                                                              -
obligations of any other Person or any security therefor or to advance or supply
funds for the payment or purchase of such obligations,  or (b) to purchase, sell
                                                            -
or lease (as lessee or lessor) property,  products,  materials or supplies or to
purchase  or sell  transportation  or  services,  primarily  for the  purpose of
enabling the obligor to make payment of such  obligations or to assure the owner
of such obligations

                                      -40-
<PAGE>

against  loss,  regardless  of the  delivery or  non-delivery  of the  property,
products,  materials  or  supplies or the  furnishing  or  nonfurnishing  of the
transportation  or  services,  or (c) to provide  funds for the  payment  of, or
                                   -
obligating such Person to make, any loan, advance, capital contribution or other
investment  in the obligor for the purpose of assuring a minimum  equity,  asset
base,  working  capital  or other  balance  sheet  condition  for any date or to
provide funds for the payment of any obligation,  dividend or stock  liquidation
payment, or otherwise to supply funds to or in any manner invest in the obligor.
The amount of any  Guarantee  shall be equal to the amount of all  Indebtedness,
liabilities and other obligations directly or indirectly guaranteed thereby.

     "Holding Company" shall mean Unidigital Inc., a Delaware  corporation,  and
      ------- -------
any successor thereto.

     "Indebtedness"  of any Person shall mean,  at any date,  all  indebtedness,
      ------------
liabilities and other  obligations of such Person at such date (other than items
of shareholders'  equity) which would, in accordance with GAAP, be classified as
liabilities of such Person, but in any event including (without duplication):

          (a) all Guarantees of such Person;

          (b) all indebtedness, liabilities and other obligations secured by any
     Lien in  respect  of  property  owned by such  Person,  whether or not such
     Person has assumed or become liable for the payment of such obligations;

          (c) all indebtedness, liabilities and other obligations of such Person
     arising  under any  conditional  sale or other title  retention  agreement,
     whether or not the rights and  remedies of the seller or lender  under such
     agreement  in the event of default are limited to  repossession  or sale of
     such property;

          (d) the amount of the obligation required to be recorded by the lessee
     in respect of any Capital Lease under which such Person is lessee; and

          (e) all  indebtedness,  liabilities and other  obligations  arising in
     connection  with  letters of credit,  bankers  acceptances  or other credit
     enhancement facilities or Derivative Transactions.

          "Indemnified   Costs"  and  "Indemnitee"  shall  have  the  respective
           -----------   -----         ----------
     meanings specified in section 21.

          "Interface"  shall mean  Interface  Graphics  Limited,  a  corporation
           ---------
     organized under the laws of Scotland, and any successor thereto.

          "Interest  Charges" of any Person  shall  mean,  for any  period,  the
           --------  -------
     aggregate  amount of all interest paid,  payable or guaranteed  during such
     period  by  such  Person,  including,

                                      -41-
<PAGE>

without  limitation,  the "imputed  interest"  portion of Rental  Obligations on
Capital Leases and all interest  capitalized  and/or deferred during such period
on any Debt, determined in accordance with GAAP.

     "Investment" of any Person shall mean any investment made by such Person in
      ----------
any  other  Person  by stock  purchase,  capital  contribution,  loan,  advance,
acquisition of Indebtedness, Guarantee or otherwise.

     "Licenses"  shall mean  certificates  of public  convenience and necessity,
      --------
franchises,  licenses and other  permits and  authorizations  from  governmental
authorities.

     "Lien"  shall  mean  any  lien,   security  interest  or  other  charge  or
      ----
encumbrance  of any  kind,  or  any  other  type  of  preferential  arrangement,
including,  without  limitation,  the  lien  or  retained  security  title  of a
conditional vendor and any easement,  right of way or other encumbrance on title
to real property.

     "Linographics" shall mean Linographics Corporation, a New York corporation,
      ------------
and any successor thereto.

     "Make Whole Amount" shall mean, at any date, with respect to any prepayment
      ---- ----- ------
or payment  (whether on account of  acceleration  or otherwise) of any Notes, if
the  Treasury  Rate plus 200 basis  points at such date is lower than 14.00% per
annum,  the  excess  of (a) the  present  value of the  principal  and  interest
                         -
payments on and in respect of the Notes being  prepaid or paid,  as the case may
be, that would otherwise  become due and payable  (without giving effect to such
prepayment  or payment and assuming that no such payments are, have been or will
be deferred  pursuant to the "pik" provisions of the Notes) (including the final
payment on the maturity date of the Notes),  discounted at a rate which is equal
to the Treasury Rate plus 200 basis points over (b) the principal  amount of the
                                                 -
Notes being  prepaid or paid,  as the case may be, at par. If the Treasury  Rate
plus 200 basis points at the date of such  prepayment  or payment is equal to or
higher  than  14.00% per  annum,  the Make Whole  Amount  for  purposes  of such
prepayment or payment at such date, is zero.

     "MassMutual  Investors"  shall mean  Massachusetts  Mutual  Life  Insurance
      ----------  ---------
Company, C.M. Life Insurance Company, MassMutual Corporate Investors, MassMutual
Participation Investors,  MassMutual Corporate Value Partners Limited and any of
their respective Affiliates.

     "Material Adverse Change" shall mean a material adverse change in or effect
      -------- ------- ------
upon any of (a) the condition (financial or otherwise),  business,  performance,
             -
operations,  properties  or  profits  of  the  Holding  Company  or  any  of its
Subsidiaries  taken as a whole, (b) the legality,  validity or enforceability of
                                 -
this Agreement,  the Securities or any of the other Operative Documents, (c) the
                                                                          -
rights and remedies of any holder of Securities  with respect to the  Securities
or (d) the ability of the Holding Company or any of its
    -

                                      -42-
<PAGE>

Subsidiaries  to perform its  obligations  under any of the Operative  Documents
and/or to comply with any of the terms thereof applicable to it.

     "Mega  Art"  shall mean Mega Art  Corp.,  a New York  corporation,  and any
      ---------
successor thereto.

     "Multiemployer  Plan" shall mean any Plan that is a "multiemployer plan" as
      -------------  ----
defined in section 4001(a)(3) of ERISA.

     "Net Income" of any Person shall mean,  for any period,  the net income (or
      --- ------
net loss) of such Person for such period,  determined in  accordance  with GAAP;
provided  that in  determining  Net Income  there shall be excluded  (a) the Net
--------                                                              -
Income of any Person (other than a Subsidiary  of the Holding  Company) in which
the Holding  Company or any  Subsidiary of the Holding  Company has an ownership
interest,  except  to the  extent  that any such Net  Income  has been  actually
received by the Holding Company or such Subsidiary in the form of cash dividends
or similar cash distributions,  (b) any undistributed Net Income of a Subsidiary
                                 -
of the Holding Company which for any reason is unavailable  for  distribution to
the Holding Company or any other Subsidiary of the Holding Company,  (c) the Net
                                                                      -
Income of any Person  accrued  prior to the date it becomes a Subsidiary  of the
Holding Company or is merged into or consolidated  with the Holding Company or a
Subsidiary of the Holding Company, (d) in the case of a successor to the Holding
                                    -
Company by consolidation,  merger or transfer of assets,  the Net Income of such
successor  accrued  prior to such  consolidation,  merger or  transfer,  (e) any
                                                                          -
deferred or other credit representing the excess of the equity in any Subsidiary
of the Holding  Company at the date of acquisition  thereof over the cost of the
investment in such Subsidiary,  (f) any restoration to income of any contingency
                                 -
reserve,  except to the extent that  provision  for such reserve was made out of
income accrued  during the same period,  (g) any aggregate net gain (but not any
                                          -
aggregate  net  loss)  arising  from the  sale,  conversion,  exchange  or other
disposition  of  capital  assets,   including,   without  limitation,   (i)  all
                                                                         -
non-current assets and, without duplication,  (ii) the following, whether or not
                                               --
current:  (A) fixed assets,  whether  tangible or intangible,  (B) all inventory
           -                                                    -
sold in conjunction  with the  disposition of fixed assets and (C) all Shares or
                                                                -
other  securities,  (h) any gains resulting from any write-up of any assets (but
                     -
not  any  loss  resulting  from  any  write-down),  (i) any net  gain  from  the
                                                     -
collection of any proceeds of life insurance policies, (j) any gain arising from
                                                        -
the acquisition of any Shares or other securities or the  extinguishment,  under
GAAP,  of any  Indebtedness,  of the Holding  Company or any  Subsidiary  of the
Holding Company,  (k) any net income or gain (but not any net loss) from (i) any
                   -                                                      -
change in accounting  principles in accordance  with GAAP, (ii) any prior period
                                                            --
adjustments  resulting  from any change in  accounting  principles in accordance
with GAAP and (iii) any discontinued  operations or the disposition thereof, (l)
               ---                                                            -
any  portion of net income that cannot be freely  converted  into United  States
Dollars and (m) any other extraordinary,  unusual,  nonrecurring or nonoperating
             -
net income or gain (but not any net loss).

                                      -43-
<PAGE>

     "Notes" shall have the meaning specified in section 1.
      -----

     "Officer's  Certificate"  shall mean a certificate  signed on behalf of the
      ---------  -----------
Companies  by the chief  executive  officer  or chief  financial  officer of the
Holding Company.

     "Operative  Documents"  shall  mean this  Agreement,  the  Securities,  the
      ---------  ---------
Registration  Rights Agreement and each of the other  agreements,  documents and
instruments  executed in connection herewith and therewith,  each as it may from
time to time be amended, modified or supplemented.

     "Organizational  Documents" of any Person shall mean such Person's  charter
      --------------  ---------
and by-laws,  partnership agreement,  operating agreement,  trust agreement,  as
applicable, and/or any other similar agreement, document or instrument.

     "Other  Purchasers" and "Other Securities  Purchase  Agreements" shall have
      -----  ----------       ----- ----------  --------  ----------
the respective meanings specified in section 1.

     "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to and
      ----
defined in ERISA or any successor thereto.

     "Permitted Investment" shall mean any of the following Investments:
      --------- ----------

          (a) Investments existing on the date hereof and referred to in Exhibit
                                                                         -------
     5.9 attached hereto;
     ---

          (b)  Investments  by the  Holding  Company or any of its  Wholly-Owned
     Subsidiaries  in  any  Wholly-Owned  Subsidiary  (or in  any  Person  which
     simultaneously therewith becomes a Wholly-Owned Subsidiary),  made by stock
     purchase, capital contribution,  loan or advance, provided that (i) both at
                                                       --------       -
     the time of and immediately after giving effect to any such Investment,  no
     Default or Event of Default shall have occurred and be continuing  and (ii)
                                                                             --
     all such  Investments are made only in Solvent entities which are organized
     under  the  laws  of and  conduct  substantially  all of  their  respective
     businesses  in the  United  States of  America  or a state  thereof  or the
     District of Columbia or any country in Western Europe;

          (c)  Investments  by any  Subsidiary  of the  Holding  Company  in the
     Holding Company;

          (d) readily marketable obligations (having a maturity not in excess of
     12  months  from  the  date  of  acquisition  thereof)  of,  or  fully  and
     unconditionally  guaranteed  (as to both  principal  and  interest) by, the
     United States of America;

                                      -44-
<PAGE>

          (e)  negotiable  certificates  of deposit  (having a  maturity  not in
     excess  of 12  months  from the date of  acquisition  thereof),  evidencing
     direct  obligations  of any  federally  insured  commercial  bank or  trust
     company  organized  and  operating in the United  States of America  having
     capital and surplus and undivided profits of at least $1,000,000,000;

          (f) commercial paper (having a maturity not in excess of 270 days from
     the date of acquisition  thereof) issued by any  corporation  organized and
     operating  in the  United  States of  America  having  the  highest  rating
     available  from  Moody's  Investors  Services,  Inc.,  or Standard & Poor's
     Corporation;

          (g) money market funds or mutual funds registered under the Investment
     Company Act of 1940,  as amended,  organized  and  operating  in the United
     States of America,  having total net assets of  $1,000,000,000  or more and
     the assets of which  constitute  Investments  described in clauses (d), (e)
     and/or (f) of this definition;

          (h)  accounts  receivable  arising from  transactions  in the ordinary
     course of business;  contingent liabilities  represented by endorsements of
     negotiable  instruments for collection or deposit in the ordinary course of
     business;  advances,  deposits, down payments and prepayments on account of
     firm purchase orders made in the ordinary course of business;

          (i) advances to employees for business related expenses to be incurred
     in the ordinary course of business and consistent with past practices in an
     amount not to exceed  $50,000  in the  aggregate  outstanding  at any time,
     provided that no such advances to any single  employee shall exceed $10,000
     --------
     in the aggregate outstanding at any time;

          (j)  short-term   tax-exempt  securities  including  municipal  notes,
     commercial  paper,  option rate  floaters and floating  rate notes rated at
     least "P-1" (or the then equivalent  grade) by Moody's  Investors  Service,
     Inc. or "A-1" (or the then  equivalent  grade) by Standard & Poor's Ratings
     Group,  and bonds  rated at least  "AA" (or the then  equivalent  grade) by
     Standard & Poor's Ratings Group;

          (k)  pre-refunded  municipal  bonds escrowed to maturity and backed by
     U.S. Treasury securities;

          (l) repurchase  agreements  covering U.S. Treasury or U.S.  government
     agency  securities  valued at not less  favorably than 102% of market value
     with a term of not more than seven days with major banks and  dealers  that
     are  recognized  as "primary  dealers" by the Federal  Reserve  Bank of New
     York;

                                      -45-
<PAGE>

          (m)  tax-exempt  preferred  stock or bonds  issued  with a  rate-reset
     mechanism  and a maximum  term of 180 days and rated at least "AAA" (or the
     then equivalent grade) by Moody's Investors Service, Inc.;

          (n) with respect to any Subsidiary organized in any jurisdiction other
     than the  United  States  or any state  thereof  (hereinafter,  a  "Foreign
     Subsidiary"),  government  obligations of (1) the United  Kingdom,  (2) the
                                                -                         -
     country in which such  Foreign  Subsidiary  maintains  its chief  executive
     office,  (3) any other  country  approved  by the  Required  Holders of the
               -
     Notes, or (4) any other country whose debt securities are rated by Standard
                -
     & Poor's Ratings Group and Moody's Investors Service,  Inc. "A-1" or "P-1",
     respectively,  or the  equivalent  thereof (if a short-term  debt rating is
     provided  by  either)  or at  least  "AA" or  "AA2",  respectively,  or the
     equivalent  thereof,  if a long-term  unsecured  debt rating is provided by
     either  (each  such  country,  an  "Approved  Country"),  in each case with
     maturities of less than 12 months; and

          (o) insured  certificates  of  deposit,  bankers  acceptances  or time
     deposits  having a maturity of not greater  than 12 months from the date of
     issuance thereof with any commercial bank or financial  institution  having
     combined capital and surplus of at least $1,000,000,000 and organized under
     the laws of an Approved  Country and having a rating that is the equivalent
     of at least  "P-1"  (or the then  equivalent  grade) by  Moody's  Investors
     Service,  Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
     Rating Group.

     "Person"  shall  mean an  individual,  a  corporation,  an  association,  a
      ------
joint-stock  company,  a  business  trust  or  other  similar  organization,   a
partnership,  a  limited  liability  company,  a  joint  venture,  a  trust,  an
unincorporated  organization or a government or any agency,  instrumentality  or
political subdivision thereof.

     "Plan" shall mean an "employee benefit plan" (as defined in section 3(3) of
      ----
ERISA) that is or,  within the preceding  five years,  has been  established  or
maintained,  or to which  contributions are or, within the preceding five years,
have been made or  required  to be made,  by the  Holding  Company  or any ERISA
Affiliate  or with respect to which the Holding  Company or any ERISA  Affiliate
may have any liability.

     "Preferred  Shares",  as applied to any  Person,  shall mean Shares of such
      ---------  ------
Person which shall be entitled to  preference  or priority over any other Shares
of such Person in respect of either the payment of dividends or the distribution
of assets upon liquidation, and in the case of the Holding Company shall include
the Preferred Stock.

     "Preferred  Stock" shall mean the Preferred  Stock,  $.01 par value, of the
      ---------  -----
Holding Company as constituted on the Closing Date.

     "Principal  Stockholder" shall mean William E. Dye.
      ---------  -----------

                                      -46-
<PAGE>

     "Pro Forma  Consolidated  Cash Flow" shall mean,  for any period,  the sum,
      --- -----  ------------  ---- ----
determined on a Consolidated basis without duplication, of (A)(i) net income (or
                                                            -  -
net loss),  (ii) interest expense,  (iii) income tax expense,  (iv) depreciation
             --                      ---                        --
expense, (v) amortization  expense,  (vi) non-cash charges,  (vii) the legal and
          -                           --                      ---
accounting costs and other reasonable  expenses  incurred in connction with any
acquisition of any Person or business completed after the date of this Agreement
and in compliance with the provisions of this Agreement, in each case determined
in  accordance  with  GAAP for  such  period  and  (viii)  other  non-recurring,
non-operating expenses,  including, without limitation,  restructuring expenses;
provided,  however,  that net income  (or net loss)  shall be  computed  without
--------
giving effect to  extraordinary  losses or gains;  provided,  further,  that Pro
                                                   --------   -------
Forma  Consolidated  Cash Flow  shall in any  event  exclude  the  amount of any
non-cash income  recognized  during any period for which Pro Forma  Consolidated
Cash Flow is  determined,  (B) the pro forma effect on EBITDA for such period of
                            -
any  such  acquisition  consummated  by  the  Holding  Company  or  any  of  its
Subsidiaries  during the most recent  twelve month period  preceding the date of
determination,  but solely for the number of months  immediately  preceding  the
consummation of the applicable acquisition, which number equals twelve (12) less
the number of months following the consummation of the applicable acquisition to
such date of determination, plus (C) the amount by which compensation to owners,
                            ----  -
employees  or  agents  of the  Person  or  business  acquired  pursuant  to such
acquisition  will be  reduced  following  such  acquisition,  as set forth in an
Officer's Certificate which is reasonably acceptable to the Required Holders.

     "Pro  Forma   Consolidated   Fixed  Charges"  shall  mean  for  any  period
      ---  -----   ------------   -----  -------
Consolidated Fixed Charges for such period adjusted in a manner  satisfactory to
the Required  Holders of the Notes to include the Fixed  Charges for such period
of any  Person  or  business  acquired  by  the  Holding  Company  or any of its
Subsidiaries  during such period  (including  any  adjustment  on account of any
identifiable  savings  acceptable  to the  Required  Holders of the Notes),  and
otherwise determined in accordance with GAAP.

     "Proprietary  Rights"  shall mean any  patents,  registered  and common law
      -----------  ------
trademarks,  service marks, trade names, copyrights,  licenses and other similar
rights  (including,  without  limitation,  know-how,  trade  secrets  and  other
confidential information) and applications for each of the foregoing, if any.

     "Put  Closing  Date",  "Put  Notice"  and "Put  Securities"  shall have the
      ---  -------  ----     ---  ------        ---  ----------
respective meanings specified in section 12.1.

     "Put Price" shall mean, at any date,  (a) as applied to any Warrant  Share,
      --- -----                             -
the  greater of the  Exercise  Price (as defined in the  Warrants)  per share in
effect on such date and the Fair Value (as defined in the Warrants) per share as
of such date and (b) as applied to any  Warrant,  (i) the  amount  specified  in
                  -                                -
clause (a) less the Exercise  Price per share in effect on such date and payable
        -  ----
upon  exercise  thereof  times (ii) the number of Warrant  Shares  issuable upon
                         -----  --
exercise of such Warrant.

                                      -47-
<PAGE>

     "Regent" shall mean Regent Group Limited, a United Kingdom corporation, and
      ------
any successor thereto.

     "Registration Rights Agreement" shall have the meaning specified in section
      ------------ ------ ---------
4.3.

     "Rental  Obligations"  of any Person shall mean, for any period,  all rents
      ------  -----------
and  other  amounts  (including  as such,  all  payments  which  such  Person is
obligated to make to the lessor on  termination of any lease and/or on surrender
of the leased property other than payments for which such Person is contingently
liable on account of early termination or breach of such lease) paid, payable or
guaranteed  during such period by such Person,  as lessee or sublessee under any
lease,  including,  without  limitation,  any amount required to be paid by such
Person  (whether or not  designated as rents or additional  rents) on account of
maintenance,   repairs,   insurance,   taxes,  utilities  and  similar  charges,
determined  in accordance  with GAAP.  Whenever it is necessary to determine the
amount of Rental  Obligations  for any  period,  to the extent  that such Rental
Obligations  are not  definitely  determinable  by the terms of the  lease,  the
Rental  Obligations  not so definitely  determinable  shall be estimated in good
faith and in such  reasonable  manner as the board of  directors  of the Holding
Company may determine.

     "Required  Holders" as applied to describe the requisite  holder or holders
      --------  -------
of any class of the  Securities,  shall mean, at any date, the holder or holders
of  66-2/3%  or more in  interest  of  such  class  of  Securities  at the  time
outstanding  (excluding all Securities at the time owned by the Holding  Company
or any Affiliate of the Holding Company).

     "Restricted  Investment"  shall mean any Investment  other than a Permitted
      ----------  ----------
Investment.

     "Restricted Payment" as applied to any Person shall mean:
      ---------- -------

          (a) any dividend or other distribution, direct or indirect, on account
     of any  Shares of such  Person  now or  hereafter  outstanding  (including,
     without limitation, Preferred Shares) or any securities convertible into or
     exercisable  or  exchangeable  for such  Shares or any  rights,  options or
     warrants  to  acquire  any  such  Shares  (including,  without  limitation,
     dividends  pursuant  to "poison  pill"  arrangements),  except (i) any such
                                                                     -
     dividend  or  distribution  payable  to  the  Holding  Company  and/or  any
     Wholly-Owned  Subsidiary and (ii) a pro rata distribution payable to all of
                                   --    --- ----
     the shareholders of the Holding Company solely in shares of Common Stock of
     the  Holding  Company  and as a result  of which  there is no change in the
     relative  ownership  interest of any  shareholder in the Holding Company or
     any of such shareholder's rights; and

          (b) any redemption,  retirement, purchase or other acquisition, direct
     or  indirect,  of any Shares of such  Person now or  hereafter  outstanding
     (including,  without  limitation,   Preferred  Shares)  or  any  securities
     convertible  into or

                                      -48-
<PAGE>

     exercisable  or  exchangeable  for such  Shares or any  rights,  options or
     warrants to acquire any such Shares; and

          (c)  any   payment,   direct  or   indirect,   of  any   compensation,
     remuneration,  management  or  consulting  fee or any  other  amount to the
     Principal Stockholder (other than ordinary and reasonable  compensation for
     services) or any of his Affiliates;

provided that,  notwithstanding  the foregoing,  the term  "Restricted  Payment"
--------                                                    ----------  -------
shall not include any dividend or other distribution paid on, or any redemption,
retirement,  purchase or other  acquisition  of, or other payment in respect of,
any of the Securities.

     "Second  Call Price" and "Second  Call  Shares"  shall have the  respective
      ------  ---- -----       ------  ----  ------
meanings specified in section 12.2.

     "Securities"  shall mean each of the Notes,  the Warrants  and,  unless the
      ----------
context  clearly  requires  otherwise,  the Warrant  Shares,  each of which is a
"Security".
 --------

     "Securities Act" shall mean the Securities Act of 1933, as amended,  or any
      ---------- ---
successor  federal  statute,  and the rules and  regulations  of the  Commission
promulgated thereunder, all as the same shall be in effect from time to time.

     "Senior  Debt" of any Person on any date shall mean all Debt of such Person
      ------  ----
on such date other than (a) Debt  evidenced by the Notes and (b) Debt  expressly
                         -                                    -
subordinated  to the Notes on terms and  conditions  acceptable  to the Required
Holders of the Notes.

     "Shares" of any Person shall  include any and all shares of capital  stock,
      ------
partnership  interests,   membership  interests,  or  other  shares,  interests,
participations or other equivalents (however designated and of any class) in the
capital of, or other ownership interests in, such Person.

     "Significant Subsidiary" shall have the meaning specified in section 14.11.
      ----------- ----------

     "Solvent" as applied to any Person at any date shall mean that on and as of
      -------
such date (a) the fair value of the  property of such Person is greater than the
           -
total  amount  of  liabilities,   including,   without  limitation,   contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
                              -
such  Person  is not less  than the  amount  that  will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured,  (c) such Person does not intend to, and does not believe that it will,
           -
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities  mature  and  (d)  such  Person  is not  engaged  in  business  or a
                           -
transaction,  and is not about to engage in business or a transaction, for which
such Person's  property would  constitute an  unreasonably  small  capital.  The
amount of contingent  liabilities on and as of any date shall be computed as the
amount that, in the light of all the facts and

                                      -49-
<PAGE>

circumstances  existing on and as of such date,  represents  the amount that can
reasonably be expected to become an actual or matured liability. For purposes of
this definition,  "Person" shall mean, where so required by the context in which
the term "Solvent" appears, such Person and its Subsidiaries taken as a whole.

     "Subsidiary"  of any Person at any date shall mean (a) any other  Person at
      ----------                                         -
least 66-2/3% (by number of votes) of the Voting Stock of which is owned by such
first-mentioned  Person  and/or  by one  or  more  other  Subsidiaries  of  such
first-mentioned  Person  and (b) any other  Person  with  respect  to which such
                              -
first-mentioned  Person  and/or  any  one or  more  other  Subsidiaries  of such
first-mentioned  Person (i) is  entitled  to at least  66-2/3% of such  Person's
                         -
profits or losses or at least 66-2/3% of such Person's  assets on liquidation or
(ii)  holds an  equity  interest  in such  Person of at least  66-2/3%.  As used
 --
herein,  unless the context clearly required  otherwise,  the term  "Subsidiary"
refers to a Subsidiary of the Holding Company.

     "Successor Corporation" shall have the meaning specified in section 14.14.
      --------- -----------

     "SuperGraphics"   shall  mean  SuperGraphics   Corporation,   a  California
      -------------
corporation, and any successor thereto.

     "SuperGraphics  Holding" shall mean SuperGraphics Holding Company,  Inc., a
      -------------  -------
Delaware corporation, and any successor thereto.

     "Total  Assets" of any Person at any date shall mean all of the  properties
      -----  ------
and assets  (whether  real,  personal or mixed,  tangible or intangible) of such
Person at such date determined in accordance with GAAP.

     "Treasury Rate" at any time with respect to any Notes being prepaid or paid
      -------- ----
(whether on account of  acceleration  or  otherwise),  as the case may be, shall
mean and shall be determined by reference to the display  designated as "page 5"
on the Telerate  Service as of 10:00 A.M.,  Boston time, on the second  Business
Day prior to the date fixed for such  prepayment or payment (or, if such display
is no longer  available,  any other publicly  available source of similar market
data, as selected by the Required Holders of the Notes),  and shall be the yield
on actively  traded United  States  Treasury  securities  adjusted to a maturity
equal to the then remaining  Weighted Average Life to Maturity of the Notes then
being prepaid or paid  (whether on account of  acceleration  or otherwise)  (the
"Remaining  Life").  If the  Remaining  Life is not equal to the  maturity  of a
 ---------  ----
United States  Treasury  security for which a yield is given,  the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the  weekly  average  yields of the two  closest  United  States
Treasury  securities  for  which  such  yields  are  given,  except  that if the
Remaining  Life is less than one year,  the  average  yield on  actively  traded
United States Treasury  securities  adjusted to a constant  maturity of one year
shall be used.  The Treasury  Rate shall be computed to the fifth  decimal place

                                      -50-
<PAGE>

(one-thousandth  of a percentage  point) and then rounded to the fourth  decimal
place (one-hundredth of a percentage point).

     "Unison (MA)" shall mean Unison (MA), Inc. a Delaware corporation,  and any
      ------  --
successor thereto.

     "Unison (NY)" shall mean Unison (NY), Inc. a Delaware corporation,  and any
      ------  --
successor thereto.

     "Voting Stock",  when used with reference to any Person,  shall mean Shares
      ------ -----
(however  designated)  of such  Person  having  ordinary  voting  power  for the
election  of a  majority  of the  members  of the board of  directors  (or other
governing  body) of such  Person,  other than  Shares  having such power only by
reason of the happening of a contingency.

     "Warrant Shares" shall have the meaning specified in the Warrants.
      ------- ------

     "Weighted Average Life to Maturity" of any Indebtedness or obligation shall
      -------- ------- ---- -- --------
mean, at any date,  the number of years  obtained by dividing the then Remaining
Dollar-years  of  such  Indebtedness  or  obligation  by  the  then  outstanding
principal  amount of such  Indebtedness  or  obligation.  For  purposes  of this
definition, the "Remaining Dollar-years" of any Indebtedness or obligation shall
                 --------- ------------
mean, at any date,  the total of the products  obtained by  multiplying  (a) the
                                                                          -
amount of each then  remaining  installment,  sinking fund,  serial  maturity or
other required payment, including payment at final maturity, in respect thereof,
by (b) the number of years  (calculated to the nearest  one-twelfth)  which will
    -
elapse between such date and the making of such payment.

     "Wholly-Owned  Subsidiary" shall mean any Subsidiary all of the outstanding
      ------ -----  ----------
Shares of which, other than directors'  qualifying Shares,  shall at the time be
owned  by  the  Holding  Company  and/or  by  one  or  more  other  Wholly-Owned
Subsidiaries  and the  accounts  of which  are  consolidated  with  those of the
Holding Company in accordance with GAAP.

     "Withdrawal  Liability" shall have the meaning given such term under Part 1
      ----------  ---------
of Subtitle E of Title IV of ERISA.

     "Year  2000  Compliant"   shall  mean  that  neither  the  performance  nor
      ----  ----  ---------
functionality  of the  operating  systems  for  the  Holding  Company's  and its
Subsidiaries' computers and all software applications that run on such computers
is affected by dates prior to,  during,  spanning or after January 1, 2000,  and
shall include, but not be limited to (a) accurately processing  (including,  but
                                      -
not limited to calculating,  comparing and sequencing)  date and time data from,
into,  and  between  the  years  1999 and 2000 and leap year  calculations,  (b)
                                                                              -
functioning  without error,  interruption or decreased  performance  relating to
such date and time data, (c) accurately  processing such date and time data when
                          -
used in combination

                                      -51-
<PAGE>

with other technology,  if the other technology properly exchanges date and time
data, (d) accurate date and time data century recognition, (e) calculations that
       -                                                    -
accurately use same century and multi-century formulas and date and time values,
(f) date and time data interface values which reflect the correct  century,  and
 -
(g)  processing,  storing,  receiving and outputting all date and time data in a
 -
format that accurately indicates the century of the date and time data.

     15.2. Other Definitions.  The terms defined in this section 15.2,  whenever
           ----- -----------
used in this Agreement,  shall, unless the context otherwise requires,  have the
respective meanings hereinafter specified.

     "this  Agreement"  (and similar  references  to any of the other  Operative
      ----  ---------
Documents)  shall mean,  and the words "herein" (and  "therein"),  "hereof" (and
                                        ------         -------      ------
"thereof"),  "hereunder"  (and  "thereunder")  and words of similar import shall
 -------      ---------          ----------
refer to, such instruments as they may from time to time be amended, modified or
supplemented.

     "beneficial  ownership" shall be determined in the manner set forth in Rule
      ----------  ---------
13d-3 of the Commission under the Exchange Act.

     a "class" of  Securities  shall refer to the Notes,  the  Warrants  and the
        -----
Warrant Shares, each of which is a separate class.

     "premium"  when used in  conjunction  with  references  to principal of and
      -------
interest on the Notes,  shall mean any amount due upon any payment or prepayment
of any of the Notes,  other than  principal and interest,  and shall include the
Applicable Premium.

     15.3. Accounting Terms and Principles; Laws.
           -------------------------------------

          (a) All accounting  terms used herein which are not expressly  defined
     in this  Agreement  shall  have the  respective  meanings  given to them in
     accordance  with GAAP,  all  computations  made pursuant to this  Agreement
     shall be made in accordance with GAAP and all financial statements shall be
     prepared in accordance with GAAP.

          (b) All references  herein to laws,  statutes,  rules and  regulations
     shall, unless the context clearly requires otherwise, be deemed to refer to
     any law, statute, rule, regulation and any other governmental  restriction,
     standard  and/or  requirement  promulgated,  issued and/or  enforced by any
     domestic  or  foreign  federal,  state  or local  government,  governmental
     agency,  authority,  court,  instrumentality or regulatory body, including,
     without  limitation,  those of the  United  States of  America or any state
     thereof or the District of Columbia.

                                      -52-
<PAGE>

16.  Remedies.
     --------

     16.1. Events of Default Defined;  Acceleration of Maturity.  If any one or
           ----------------------------------------------------
more of the following events ("Events of Default") shall occur and be continuing
(whatever the reason for such Event of Default and whether it shall be voluntary
or  involuntary  or be effected by operation of law or pursuant to any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
administrative or governmental body), that is to say:

          (a) if default shall be made in the due and punctual payment of all or
     any part of the  principal of, or premium (if any) on, any Note when and as
     the same shall  become  due and  payable,  whether  at the stated  maturity
     thereof, by notice of or demand for prepayment, or otherwise;

          (b) if default  shall be made in the due and  punctual  payment of any
     interest on any Note when and as such interest shall become due and payable
     and such default shall have continued for a period of five days;

          (c) if default shall be made in the  performance  or observance of any
     covenant,  agreement or condition  contained in sections 7(g),  8(a),  9.8,
     12.1, 13, 14.2(b) or 14.4 to 14.17, inclusive;

          (d) if default shall be made in the  performance  or observance of any
     other  of  the  covenants,  agreements  or  conditions  contained  in  this
     Agreement or any of the other  Operative  Documents  and such default shall
     have  continued  for a period of 30 days after the  earlier to occur of (i)
     the Holding  Company's  obtaining  actual knowledge of such default or (ii)
     the Holding Company's receipt of written notice of such default;

          (e) if the Holding  Company or any  Subsidiary of the Holding  Company
     shall make a general assignment for the benefit of creditors,  or shall not
     pay its debts as they become  due, or shall admit in writing its  inability
     to pay its debts as they become due, or shall file a voluntary  petition in
     bankruptcy,  or shall be adjudicated  bankrupt or insolvent,  or shall file
     any petition or answer seeking for itself any reorganization,  arrangement,
     composition, readjustment, liquidation, dissolution or similar relief under
     any present or future statute, law or regulation,  or shall file any answer
     admitting or not  contesting  the material  allegations of a petition filed
     against it in any such proceeding, or shall seek or consent to or acquiesce
     in the  appointment  of any trustee,  custodian,  receiver,  liquidator  or
     fiscal agent for it or for all or any  substantial  part of its properties,
     or shall (or its directors or  shareholders  shall) take any action looking
     to its dissolution or liquidation;

          (f) if, within 60 days after the commencement of an action against the
     Holding  Company or any  Subsidiary  of the  Holding  Company  seeking  any

                                      -53-
<PAGE>

     reorganization,   arrangement,  composition,   readjustment,   liquidation,
     dissolution or similar relief under any present or future  statute,  law or
     regulation,  such  action  shall not have been  dismissed  or all orders or
     proceedings  thereunder  affecting  the  operations  or the business of the
     Holding Company or such Subsidiary stayed, or if the stay of any such order
     or proceeding  shall  thereafter be set aside,  or if, within 60 days after
     the appointment  without the consent or acquiescence of the Holding Company
     or such  Subsidiary  of any trustee,  custodian,  receiver,  liquidator  or
     fiscal  agent for the  Holding  Company or any  Subsidiary  of the  Holding
     Company or for all or any substantial part of their respective  properties,
     such appointment shall not have been vacated;

          (g) if,  under  the  provisions  of any law for the  relief  or aid of
     debtors,  any court or governmental agency of competent  jurisdiction shall
     assume  custody or control of the Holding  Company or of any  Subsidiary of
     the Holding Company or of all or any substantial  part of their  respective
     properties  and such custody or control  shall not be  terminated or stayed
     within 60 days from the date of assumption of such custody or control;

          (h) the Holding Company or any Subsidiary of the Holding Company shall
     fail to (i) make any payment due on any Indebtedness (other than the Notes)
              -
     or other  obligation  (including  any in respect of any lease or any Shares
     upon the exercise by any Person of any put or call option or other  similar
     right of redemption or repurchase  with regard to such Shares in accordance
     with the  terms of such  option or  right),  if the  aggregate  outstanding
     amount  thereof (and of any other  Indebtedness  or other  obligation as to
     which  the  Holding  Company  or  any  Subsidiary  is in  default)  exceeds
     $4,000,000 (or the equivalent thereof, as of any date of determination,  in
     any other  currency) or (ii)  perform,  observe or discharge  any covenant,
                              --
     condition  or   obligation  in  any   agreement,   document  or  instrument
     evidencing,  securing or relating to such Indebtedness or other obligation,
     if the effect of any such failure of the character described in this clause
     (h) is to cause (without further action by any Person), or any Person shall
     cause,  any payment in respect thereof in an aggregate amount of $4,000,000
     (or the equivalent thereof,  as of any date of determination,  in any other
     currency) or more to become due and payable, or if any such Indebtedness or
     other  obligation  in aggregate  amount of  $4,000,000  (or the  equivalent
     thereof,  as of any date of  determination,  in any other currency) or more
     shall  become  due  and  payable  by its  terms  and  shall  not be paid or
     extended;

          (i) if a final judgment for the payment of money which,  together with
     all other  outstanding final judgments for the payment of money against the
     Holding Company and/or any of its  Subsidiaries  (excluding any judgment or
     judgments as to which an insurance  company has accepted full  liability in
     writing), exceeds an aggregate of $4,000,000 (or the equivalent thereof, as
     of any date of determination, in any other currency) shall be rendered by a
     court of

                                      -54-
<PAGE>

     record  against  the  Holding  Company or any  Subsidiary,  and the Holding
     Company or such Subsidiary  shall not discharge the same or provide for its
     discharge  in  accordance  with its terms,  or procure a stay of  execution
     thereof  within  45 days from the date of entry  thereof  and  within  such
     period of 45 days,  or such longer  period  during which  execution of such
     judgment  shall have been  stayed,  move to vacate such  judgment or appeal
     therefrom   and  cause  the   execution   thereof  to  be  stayed   pending
     determination of such motion or during such appeal;

          (j) if any  representation  or  warranty  made by or on  behalf of the
     Holding  Company or any Subsidiary of the Holding Company in this Agreement
     or in any of the other Operative Documents or in any agreement, document or
     instrument  delivered under or pursuant to any provision  hereof or thereof
     shall prove to have been false or incorrect in any material  respect on the
     date as of which made;

          (k) if,  at any time,  this  Agreement  or any of the other  Operative
     Documents  shall  for any  reason  (other  than the  scheduled  termination
     thereof in accordance with its terms), expire, fail to be in full force and
     effect or be disaffirmed,  repudiated,  canceled, terminated or declared to
     be unenforceable, null and void; or

          (l) if (i)  any  Plan  shall  fail  to  satisfy  the  minimum  funding
                  -
     standards  of ERISA or the Code  for any  plan  year or part  thereof  or a
     waiver of such standards or extension of any amortization  period is sought
     or  granted  under  section  412 of the  Code,  (ii) a notice  of intent to
                                                      --
     terminate  any Plan shall have been or is  reasonably  expected to be filed
     with the PBGC or the PBGC shall have instituted  proceedings  under section
     4042 of ERISA to terminate or appoint a trustee to  administer  any Plan or
     the PBGC shall have  notified  the Holding  Company or any ERISA  Affiliate
     that a Plan  may  become  a  subject  of any such  proceedings,  (iii)  the
                                                                       ---
     aggregate "amount of unfunded benefit  liabilities"  (within the meaning of
     section  4001(a)(18)  of ERISA) under all Plans,  determined  in accordance
     with Title IV of ERISA,  shall exceed $200,000 (or the equivalent  thereof,
     as of any date of determination,  in any other currency),  (iv) the Holding
                                                                 --
     Company  or any  ERISA  Affiliate  shall  have  incurred  or is  reasonably
     expected to incur any  liability  pursuant to Title I or IV of ERISA or the
     penalty or excise tax  provisions of the Code relating to employee  benefit
     plans,  (v) the Holding Company or any ERISA  Affiliate  withdraws from any
              -
     Multiemployer  Plan, or (vi) the Holding  Company or any  Subsidiary of the
                              --
     Holding  Company  establishes or amends any employee  welfare  benefit plan
     that  provides  post-employment  welfare  benefits  in a manner  that would
     increase the  liability  of the Holding  Company or any  Subsidiary  of the
     Holding  Company  thereunder;  and any such  event or events  described  in
     clauses (i) through (vi) above,  either  individually  or together with any
     other  such  event or  events,  has  resulted  in, or could  reasonably  be
     expected to result in a Material Adverse Change; or

                                      -55-
<PAGE>

          (m) William E. Dye shall cease to maintain beneficial  ownership of 5%
     or more of the outstanding Voting Stock of the Holding Company, unless such
     cessation is the result of a testamentary disposition upon his death;

then,  subject to the terms of subordination set forth in the Notes, in the case
of  any  Event  of  Default  (other  than  one  of the  character  described  in
subdivisions  (e),  (f) or (g) of this  section  16.1) and at the  option of the
Required  Holders  of the Notes at the time  outstanding,  exercised  by written
notice to the Companies,  the principal of all Notes shall forthwith  become due
and payable,  together  with  interest  accrued  thereon,  without  presentment,
demand,  protest or other notice of any kind, all of which are hereby  expressly
waived,  and the Companies shall forthwith upon any such acceleration pay to the
holder or holders of all the Notes then  outstanding (i) the entire principal of
                                                      -
and interest accrued on the Notes and (ii) to the extent permitted by applicable
                                       --
law, an amount equal to the Applicable Premium, as liquidated damages and not as
a penalty,  that would be payable if the Companies prepaid the Notes pursuant to
section 9.3 on the date of such  acceleration;  provided that, in the case of an
                                                --------
Event of Default of the character  described in subdivisions  (a) or (b) of this
section 16.1 and irrespective of whether all of the Notes have been declared due
and payable by the Required  Holders of the Notes at the time  outstanding,  any
holder of Notes who or which has not  consented  to any waiver  with  respect to
such Event of Default  may, at the option of such holder,  by written  notice to
the Companies,  declare all Notes then held by such holder to be, and such Notes
shall  thereupon  become,  forthwith  due and payable,  together  with  interest
accrued thereon,  without  presentment,  demand,  protest or other notice of any
kind,  all of  which  are  hereby  expressly  waived,  and the  Companies  shall
forthwith upon any such acceleration pay to such holder (i) the entire principal
                                                         -
of and  interest  accrued  on such  Notes and (ii) to the  extent  permitted  by
                                               --
applicable law, an amount equal to the Applicable Premium, as liquidated damages
and not as a penalty,  that would be payable if the Companies prepaid such Notes
pursuant to section  9.3 on the date of such  acceleration;  provided,  further,
                                                             --------   -------
that,  in the  case  of an  Event  of  Default  of the  character  described  in
subdivisions  (e), (f) or (g) of this section  16.1,  the principal of all Notes
shall forthwith  become due and payable,  together with interest accrued thereon
(including  any  interest  accruing  after  the  commencement  of any  action or
proceeding under the federal  bankruptcy laws, as now or hereafter  constituted,
or any  other  applicable  domestic  or  foreign  federal  or state  bankruptcy,
insolvency or other similar law, and any other  interest that would have accrued
but for the commencement of such proceeding, whether or not any such interest is
allowed  as an  enforceable  claim  in such  proceeding),  without  presentment,
demand,  protest or other notice of any kind, all of which are hereby  expressly
waived,  and the Companies shall forthwith upon any such acceleration pay to the
holder or holders of all the Notes then  outstanding (i) the entire principal of
                                                      -
and interest accrued on the Notes and (ii) to the extent permitted by applicable
                                       --
law, an amount equal to the Applicable Premium, as liquidated damages and not as
a penalty,  that would be payable if the Companies prepaid the Notes pursuant to
section 9.3 on the date of such acceleration.

                                      -56-
<PAGE>

     Notwithstanding the foregoing provisions,  at any time after the occurrence
of any Event of Default and of notice thereof,  if any, by any holder or holders
of Notes and before any  judgment,  decree or order for payment of the money due
has been  obtained  by or on behalf of any holder or  holders of the Notes,  the
Required  Holders of the Notes by written notice to the  Companies,  may rescind
and annul such Event of Default  and/or  notice of such Event of Default and the
consequences thereof with respect to all of the Notes (including any Notes which
were accelerated pursuant to the first proviso in the preceding paragraph by any
holder or holders on account of an Event of Default of the  character  described
in clause (a) or (b) of this section 16.1) if:

          (1)  the Companies have paid a sum sufficient to pay

               (A) all overdue  interest on the Notes at the rate  specified  in
          the Notes;

               (B) the  principal of (and  premium,  if any, on) any Notes which
          have  become  due  otherwise  than by such  Event of Default or notice
          thereof and interest thereon at the rate specified in the Notes; and

               (C) interest on such overdue principal (and premium, if any) and,
          to the extent that payment of such  interest is lawful,  interest upon
          overdue  interest,  all at the rate for overdue  amounts  specified in
          such Notes; and

          (2)  all Defaults and Events of Default, other than the non-payment of
     amounts which have become due solely by such acceleration,  have been cured
     or waived as provided in section 19.

No such  rescission  shall  affect  any  subsequent  default or impair any right
consequent thereon.

     16.2. Suits for Enforcement, etc.  In case any one or more of the Events of
           ---------------------------
Default  specified  in section 16.1 shall have  occurred,  and  irrespective  of
whether any Notes have become or have been declared  immediately due and payable
under  section  16.1,  the holder of any Note may proceed to protect and enforce
its rights either by suit in equity or by action at law, or both.  The Companies
stipulate that the remedies at law of the holder or holders of the Securities in
the  event  of  any  default  or  threatened  default  by the  Companies  in the
performance of or compliance with any covenant or agreement in this Agreement or
any of the other Operative  Documents are not and will not be adequate and that,
to the fullest extent permitted by law, such terms may be specifically  enforced
by a decree for the  specific  performance  thereof,  whether  by an  injunction
against a violation thereof or otherwise.

                                      -57-
<PAGE>

     16.3. Remedies Cumulative.  No remedy conferred in this Agreement or in any
           -------------------
of the other Operative  Documents upon the holder of any Security is intended to
be  exclusive  of any other  remedy,  and each and every  such  remedy  shall be
cumulative  and shall be in addition to every other  remedy  given  hereunder or
thereunder  or now or  hereafter  existing  at law or in equity or by statute or
otherwise.

     16.4. Remedies Not Waived. No course of dealing between the Holding Company
           -------------------
and any of its Subsidiaries, on the one hand, and any holder of any Security, on
the  other  hand,  and no delay by any such  holder  in  exercising  any  rights
hereunder  or under any of the other  Operative  Documents  shall  operate  as a
waiver of any rights of any such holder.

     16.5.  Application  of  Payments.  In case any one or more of the Events of
            -------------------------
Default specified in section 16.1 shall have occurred, all amounts to be applied
to the prepayment or payment of any Notes,  shall be applied,  after the payment
of all  related  costs  and  expenses  incurred  by  the  holders  of the  Notes
(including,   without   limitation,   compensation  to  any  and  all  trustees,
liquidators,  receivers or similar  officials and reasonable fees,  expenses and
disbursements  of counsel) in such order of  priority  as is  determined  by the
Required Holders of the Notes.

17.  Registration,  Transfer  and  Exchange  of  Securities.  Securities  issued
     ------------------------------------------------------
hereunder shall be issued in registered  form. The Holding Company shall keep at
its principal executive office (which is now located at the address set forth at
the  beginning of this  Agreement),  registers in which it shall provide for the
registration and transfer of the Securities. The name and address of each holder
of the Securities shall be registered in such registers. The Holding Company (or
its  transfer  agent)  shall give to any  institutional  holder of any  Security
promptly  (but in any  event  within  10 days)  following  request  therefor,  a
complete and correct copy of the names and addresses of all  registered  holders
of the Securities and the amount and kind of Securities  held by each.  Whenever
any Security or Securities  shall be surrendered  for transfer or exchange,  the
Company(ies)  that issued such Security or Securities  (or its (their)  transfer
agent) at its (their)  expense will  execute and deliver in exchange  therefor a
new Security or Securities (in such denominations and registered in such name or
names  as may be  requested  by  the  holder  of  the  surrendered  Security  or
Securities),  in the  same  aggregate  unpaid  principal  amount  or in the same
aggregate number of Shares, as applicable, as that of the Security or Securities
so  surrendered  and, in the case of any Note,  dated so as not to result in any
loss of interest.  The Companies may treat the Person in whose name any Security
is registered as the owner of such Security for all purposes.

18.  Replacement of Securities. Upon receipt by the Company(ies) that issued any
     -------------------------
Security (or its (their) transfer agent) of reasonably  satisfactory evidence of
the loss, theft, destruction or mutilation of any such Security and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnity, and (in the
case of  mutilation)  upon  surrender of such Security,  the  Company(ies)  that
issued any  Security at its (their)

                                      -58-
<PAGE>

expense will execute and deliver in lieu of such Security a new Security of like
tenor  and,  in the case of any  Note,  dated so as not to result in any loss of
interest.   The  unsecured  agreement  to  indemnify  and/or  affidavit  of  any
institutional holder shall constitute satisfactory indemnity and/or satisfactory
evidence of loss, theft or destruction for the purpose of this section.

19.  Amendment and Waiver.
     --------------------

          (a)  Any  term of  this  Agreement  and,  unless  explicitly  provided
     otherwise  therein,  of any of the other Operative  Documents may, with the
     consent of the  Companies,  be  amended,  or  compliance  therewith  may be
     waived,  in  writing  only,  by the  Required  Holders  of  each  class  of
     Securities entitled to the benefits of such term, provided that (i) without
                                                       --------       -
     the consent of the holders of all of the Notes at the time outstanding,  no
     such amendment or waiver shall (A) change the amount of the principal of or
                                     -
     any rate of interest on or the amount of any premium  payable  with respect
     to any of the Notes or change the  payment  terms of any of the Notes,  or,
     except  as  provided  in  the  Notes,  subordinate  the  obligation  of the
     Companies  to pay any amount due on the Notes to any other  obligation,  or
     (B) change the  percentage of holders of Notes required to approve any such
      -
     amendment,  effectuate any such waiver or accelerate  payment of the Notes,
     (ii)  without the consent of the holders of all of the Warrants and Warrant
      --
     Shares at the time  outstanding,  no such  amendment  or  waiver  shall (A)
     change  any of the terms of section  12 or (B)  change  the  percentage  of
     holders of  Warrants  and  Warrant  Shares  required  to  approve  any such
     amendment  or  effectuate  any such waiver and (iii) no such  amendment  or
                                                     ---
     waiver shall extend to or affect any  obligation  not expressly  amended or
     waived or impair any right consequent thereon. Executed or true and correct
     copies  of any  amendment,  waiver or  consent  effected  pursuant  to this
     section 19 shall be delivered by the Companies to each holder of Securities
     forthwith (but in any event not later than ten Business Days) following the
     effective date thereof.

          (b) The  Companies  will  not,  directly  or  indirectly,  request  or
     negotiate for, or offer or pay any remuneration or grant any security as an
     inducement  for, any proposed  amendment or waiver of any of the provisions
     of this  Agreement  or any of the other  Operative  Documents  unless  each
     holder of the Securities (irrespective of the kind and amount of Securities
     then owned by it) shall be informed  thereof by the Companies  and, if such
     holder is  entitled  to the  benefit of any such  provision  proposed to be
     amended or waived,  shall be afforded the  opportunity of  considering  the
     same,  shall be supplied by the Companies  with  sufficient  information to
     enable it to make an informed  decision  with respect  thereto and shall be
     offered and paid such  remuneration  and granted such  security on the same
     terms.

                                      -59-
<PAGE>

          (c) In determining  whether the requisite  holders of Securities  have
     given any  authorization,  consent  or waiver  under this  section  19, any
     Securities  owned  by the  Companies  or any of their  Affiliates  shall be
     disregarded and deemed not to be outstanding.

20.  Method of Payment of Securities. Irrespective of any provision hereof or of
     -------------------------------
the  other  Operative  Documents  to the  contrary,  so long as you or any other
institutional  holder  shall  hold any  Security,  the  Companies  will make all
payments  on such  Security in U.S.  dollars to you or such other  institutional
holder by the method and at the address for such purpose specified in Schedule I
                                                                      ----------
attached  hereto or by such other method or at such other address as you or such
institutional holder may designate in writing (given as provided in section 23),
without requiring any presentation or surrender of such Security, except that if
any Security shall be paid,  prepaid and/or  repurchased in full,  such Security
shall be surrendered to the Company(ies) that issued the same promptly following
such payment, prepayment or repurchase and canceled.

21.  Expenses; Indemnity. Whether or not the transactions contemplated by any of
     -------------------
the  Operative  Documents  shall be  consummated,  the  Companies,  jointly  and
severally,  will pay or cause to be paid (or reimbursed, as the case may be) and
will  defend,  indemnify  and hold  you (and  each  other  holder  of any of the
Securities)  and each of your (and such  other  holder's)  directors,  officers,
employees,  agents, advisors and Affiliates (each, an "Indemnitee") harmless (on
an after tax  basis) in  respect  of all  costs,  losses,  expenses  (including,
without  limitation,  the reasonable fees, costs,  expenses and disbursements of
counsel) and damages (collectively, "Indemnified Costs") incurred by or asserted
against any Indemnitee in connection with the negotiation,  execution, delivery,
performance  and/or  enforcement of this Agreement or any of the other Operative
Documents   (including,   without   limitation,   so-called   work-outs   and/or
restructurings   and  all  amendments,   waivers  and  consents   hereunder  and
thereunder, whether or not effected) and/or the consummation of the transactions
contemplated  hereby and thereby or which may otherwise be related in any way to
this Agreement or any other  Operative  Documents or such  transactions  or such
Indemnitee's  relationship  to either Company or any of its Affiliates or any of
their respective properties and assets, including,  without limitation,  any and
all  Indemnified   Costs  related  in  any  way  to  the   requirements  of  any
Environmental  Laws (as the same may be amended,  modified or supplemented  from
time  to  time)  or  to  any  environmental   investigation,   assessment,  site
monitoring,  containment, clean up, remediation, removal, restoration, reporting
and  sampling,  whether or not  consented  to, or  requested or approved by, any
Indemnitee, and whether or not such Indemnified Cost is attributable to an event
or condition  originating from any properties or assets of any Company or any of
its Subsidiaries or any other properties  previously or hereafter owned, leased,
occupied   or  operated   by  either   Company  or  any  of  its   Subsidiaries.
Notwithstanding the foregoing, the Companies shall not have any obligation to an
Indemnitee  under this section 21 with respect to any Indemnified  Cost which is
finally  determined by a court of competent  jurisdiction  to have arisen solely
and  directly as a result of the gross  negligence,  willful  misconduct  or bad
faith of such Indemnitee.

                                      -60-
<PAGE>

22.  Charges; Foreign Currency; Taxes.
     --------------------------------

          (a) Each payment, whether in respect of principal,  interest, premium,
     expenses or  otherwise,  by any  Company to any  holders of the  Securities
     under any Operative Document shall be made under all circumstances  without
     set off,  counterclaim  or  reduction  for and free  from and  clear of and
     without  deduction  for or because of any and all present or future  taxes,
     levies,   imposts,   duties,  fees,   assessments,   charges,   deductions,
     withholding  or  any  other   restrictions  or  conditions  of  any  nature
     whatsoever imposed, levied, collected, assessed, deducted or withheld by or
     within any jurisdiction (or any governmental authority therein or thereof),
     including without  limitation,  England and/or the United States of America
     or any political subdivision thereof (collectively,  "Charges") and, if any
     such payment is or shall be, under  applicable law,  subject to any Charge,
     then the Companies  shall  forthwith  pay to each holder of any  Securities
     such additional amounts as may be necessary in order that the net amount of
     every  payment  made to each  holder of  Securities,  after  provision  for
     payment  of all  Charges,  shall be equal to the amount  which such  holder
     would  have  received  had there been no such  Charges.  In  addition,  the
     Companies  will  indemnify and hold harmless and reimburse each such holder
     for the amount of (i) any  Charges  so levied or  imposed  and paid by such
                        -
     holder as a result of payments made under or with respect to the Securities
     (together with any other Charges imposed with respect to such reimbursement
     under  this  section  22) and  (ii)  any  liability  (including  penalties,
                                     --
     interest and expenses)  arising  therefrom or with respect thereto.  If any
     Company is  required  by law to make any  deduction  for any  Charges  with
     respect  to any  payment  made  hereunder  or  under  any  other  Operative
     Document,  such Company shall (subject to the foregoing) deduct such amount
     and shall pay the  amount  required  to the  relevant  taxing  jurisdiction
     within the time  required  and  within 30 days of  payment of such  Charges
     shall  furnish to the  holders an  original  or  certified  copy of receipt
     evidencing payment thereof.

          (b) All payments  under the  Operative  Documents due to any holder of
     the  Securities  shall be paid in  lawful  money of the  United  States  of
     America and any  payment  which is made in any  foreign  currency,  whether
     pursuant  to any  judgment  or  order of any  court,  or  otherwise,  shall
     constitute  payment only to the extent of the amount of the lawful money of
     the  United  States of America  which may be  purchased  with such  foreign
     currency on the date of payment. The Companies covenant and agree that each
     shall, as a separate and independent obligation,  which shall not be merged
     in any judgment or order,  pay or cause to be paid the amount payable under
     the Operative Documents in lawful money of the United States of America and
     no payment in any other  currency  shall  discharge the  obligations of the
     Companies except to the extent provided above.

          (c) The  Companies  will pay,  and will  indemnify  each holder of the
     Securities against,  all taxes and fees (including interest and penalties),
     including,

                                      -61-
<PAGE>

     without  limitation,  all issuance and documentary stamp and similar taxes,
     which may be  payable  in respect of the  execution  and  delivery  of this
     Agreement and each of the other Operative Documents.

23.  Communications.   All  communications   provided  for  herein  and,  unless
     --------------
explicitly  provided otherwise therein,  in any of the other Operative Documents
shall be in writing and sent (a) by telecopy if the sender on the same day sends
                              -
a  confirming  copy of such  communication  by a recognized  overnight  delivery
service  (charges  prepaid),  (b) by a  recognized  overnight  delivery  service
                               -
(charges prepaid), or (c) by messenger.  Any such communication must be sent (i)
                       -                                                      -
if to the Holding  Company (or any  Subsidiary of the Holding  Company),  to the
Holding Company (or such Subsidiary) at:

                    Unidigital Inc.
                    229 West 28th Street
                    New York, New York 10001
                    Attention:  Chief Executive Officer
                    Telecopy No.: (212) 244-7815

          with a copy (which shall not constitute notice) to:

                    Buchanan Ingersoll Professional Corporation
                    College Centre
                    500 College Road East
                    Princeton, New Jersey 08540
                    Attention:  David J. Sorin, Esq.
                    Telecopy No.:  (609) 520-0360

or at such other address (or telecopy  number) as may be furnished in writing by
the Holding  Company to each holder of any  Security and (ii) if to you, at your
                                                          --
address for such  purpose set forth in Schedule I attached  hereto,  with a copy
                                       ----------
(which shall not constitute notice) to:

                    Choate, Hall & Stewart
                    Exchange Place
                    53 State Street
                    Boston, Massachusetts  02109
                    Attention:  W. Brewster Lee, Esq.
                    Telecopy No.:  (617) 248-4000

and if to any other holder of any Security,  at the address of such holder as it
appears on the applicable register maintained pursuant to section 17, or at such
other  address as may be  furnished  in writing by you or by any other holder to
the Holding Company.  Communications under this section 23 shall be deemed given
only when actually received.

                                      -62-
<PAGE>

24.  Survival  of  Agreements,   Representations   and   Warranties,   etc.  All
     ----------------------------------------------------------------------
agreements,  representations  and warranties  contained  herein and in the other
Operative  Documents  shall be deemed to have been  relied upon by you and shall
survive  the  execution  and  delivery of this  Agreement  and each of the other
Operative Documents,  the issue, sale and delivery of the Securities and payment
therefor  and any  disposition  of the  Securities  by you,  whether  or not any
investigation at any time is made by you or on your behalf. All  indemnification
provisions,  including,  without limitation,  those contained in sections 21 and
22,  shall  survive  the  date  upon  which  none  of the  Securities  shall  be
outstanding  and  the  termination  of this  Agreement  and  each  of the  other
Operative Documents.

25.  Successors and Assigns; Rights of Other Holders. This Agreement and, unless
     -----------------------------------------------
explicitly  provided  otherwise therein,  each of the other Operative  Documents
shall bind and inure to the benefit of and be  enforceable  by the Companies and
you,  successors  to the  Companies  and your  successors  and assigns,  and, in
addition,  shall inure to the benefit of and be  enforceable by each holder from
time to time of any Securities  who, upon  acceptance  thereof,  shall,  without
further action,  be entitled to enforce the applicable  provisions and enjoy the
applicable  benefits hereof and thereof. No Company may assign any of its rights
or obligations  hereunder or under any of the other Operative  Documents without
the written  consent of the Required  Holders of each class of  Securities  then
outstanding.

26.  Purchase for Investment; Source of Funds.
     ----------------------------------------

          (a)  You  represent  and  warrant  that  (i)  you  are an  "accredited
                                                    -
     investor" as defined in Regulation D of the Commission under the Securities
     Act and (ii) you will  acquire  such  Securities  for your own  account for
              --
     investment  and not for  distribution  in any  manner  that  would  violate
     applicable securities laws, but without prejudice to your rights to dispose
     of such Securities or a portion thereof to a transferee or transferees,  in
     accordance  with such laws if at some future time you deem it  advisable to
     do so. The  acquisition  of such  Securities  by you at the  Closing  shall
     constitute  your   confirmation  of  the  foregoing   representations   and
     warranties.  You understand that such Securities are being sold to you in a
     transaction  which is  exempt  from the  registration  requirements  of the
     Securities  Act, and that,  in making the  representations  and  warranties
     contained in section 5.16,  the Holding  Company is relying,  to the extent
     applicable, upon your representations and warranties contained herein.

          (b) You represent that at least one of the following  statements is an
     accurate  representation as to each source of funds (a "Source") to be used
     by you to pay the purchase  price of the  Securities to be purchased by you
     hereunder:

               (i) the  Source is an  "insurance  company  general  account"  as
          defined in Section V(e) of Prohibited  Transaction  Exemption  ("PTE")
          95-60 (issued July 12, 1995) and,  except as you have disclosed to the
          Holding

                                      -63-
<PAGE>

          Company  in  writing  pursuant  to this  section  (i),  the  amount of
          reserves and liabilities for the general account  contract(s)  held by
          or on behalf of any employee benefit plan or group of plans maintained
          by the same employer or employee organization do not exceed 10% of the
          total reserves and  liabilities of the general  account  (exclusive of
          separate  account  liabilities)  plus surplus as set forth in the NAIC
          Annual Statement filed with the state of domicile of the insurer; or

               (ii) the Source is a separate  account  of an  insurance  company
          maintained  by you in which an employee  benefit  plan (or its related
          trust) has an interest, which separate account is maintained solely in
          connection  with your fixed  contractual  obligations  under which the
          amounts payable,  or credited,  to such plan and to any participant or
          beneficiary of such plan (including any annuitant) are not affected in
          any manner by the investment performance of the separate account; or

               (iii) the  Source  is  either  (A) an  insurance  company  pooled
                                               -
          separate  account,  within the meaning of PTE 90-1 (issued January 29,
          1990), or (B) a bank collective investment fund, within the meaning of
                     -
          the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
          to the Holding  Company in writing  pursuant to this section (iii), no
                                                                        ---
          employee  benefit  plan or  group  of  plans  maintained  by the  same
          employer or employee  organization  beneficially owns more than 10% of
          all assets  allocated to such pooled  separate  account or  collective
          investment fund; or

               (iv)  the  Source  constitutes  assets  of an  "investment  fund"
          (within  the  meaning  of Part V of the QPAM  Exemption)  managed by a
          "qualified  professional  asset manager" or "QPAM" (within the meaning
          of Part V of the QPAM  Exemption),  no employee  benefit plan's assets
          that are included in such  investment  fund,  when  combined  with the
          assets of all other employee  benefit plans  established or maintained
          by the same employer or by an affiliate (within the meaning of Section
          V(c)(1)  of the  QPAM  Exemption)  of  such  employer  or by the  same
          employee  organization  and  managed by such  QPAM,  exceed 20% of the
          total client assets  managed by such QPAM, the conditions of Part I(c)
          and (g) of the QPAM  Exemption are  satisfied,  neither the QPAM nor a
          person  controlling or controlled by the QPAM (applying the definition
          of "control" in Section V(e) of the QPAM  Exemption) owns a 5% or more
          interest in the Holding  Company and (A) the identity of such QPAM and
                                                -
          (B) the names of all employee  benefit plans whose assets are included
           -
          in such  investment fund have been disclosed to the Holding Company in
          writing pursuant to this section (iv); or

               (v) the Source is a governmental plan; or

                                      -64-
<PAGE>

               (vi) the  Source  is one or more  employee  benefit  plans,  or a
          separate  account  or trust  fund  comprised  of one or more  employee
          benefit  plans,  each of which  has  been  identified  to the  Holding
          Company in writing pursuant to this section (vi); or

               (vii) the Source does not include assets of any employee  benefit
          plan, other than a plan exempt from the coverage of ERISA.

     As  used  in  this  section  26(b),  the  terms  "employee  benefit  plan",
     "governmental  plan", "party in interest" and "separate account" shall have
     the respective  meanings  assigned to such terms in Section 3 of ERISA, and
     the term "QPAM Exemption" means PTE 84-14 (issued March 13, 1984).

27.  Governing  Law;  Jurisdiction;  Waiver of Jury Trial.  This  Agreement and,
     ----------------------------------------------------
unless  explicitly  provided  otherwise  therein,  each of the  other  Operative
Documents,  including  the  validity  hereof  and  thereof  and the  rights  and
obligations  of the parties  hereunder and  thereunder,  and all  amendments and
supplements  hereof and  thereof  and all waivers  and  consents  hereunder  and
thereunder,  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.  Each Company and each
holder of any  Securities,  to the extent  that it may  lawfully  do so,  hereby
consents  to service of  process,  and to be sued,  in the State of New York and
consents  to the  jurisdiction  of the  courts  of the State of New York and the
United States  District Court for the Southern  District of New York, as well as
to the  jurisdiction  of all  courts to which an appeal  may be taken  from such
courts,  for the purpose of any suit, action or other proceeding  arising out of
any  of  its  obligations  hereunder  or  thereunder  or  with  respect  to  the
transactions  contemplated  hereby or thereby,  and expressly waives any and all
objections  it may have as to venue in any such  courts.  Each  Company and each
holder of any Securities further agrees that a summons and complaint  commencing
an action or proceeding in any of such courts shall be properly served and shall
confer personal  jurisdiction if served personally or by certified mail to it at
its address set forth in section 23 or as otherwise  provided  under the laws of
the State of New York.  Notwithstanding  the  foregoing,  each  Company and each
holder of any Securities  agrees that nothing contained in this section 27 shall
preclude the  institution  of any such suit,  action or other  proceeding in any
jurisdiction  other than The State of New York.  EACH COMPANY AND EACH HOLDER OF
ANY  SECURITIES  IRREVOCABLY  WAIVES  ALL  RIGHT TO A TRIAL BY JURY IN ANY SUIT,
ACTION  OR OTHER  PROCEEDING  INSTITUTED  BY OR  AGAINST  IT IN  RESPECT  OF ITS
OBLIGATIONS  HEREUNDER OR THEREUNDER OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR
THEREBY.

                                      -65-
<PAGE>

28.  Rules 144 and 144A.  The  Companies  will take,  or will cause to be taken,
     ------------------
such action as any holder of Securities may reasonably request from time to time
to  facilitate  any sale or  disposition  by any such  holder of any  Securities
without  registration under the Securities Act and/or any applicable  securities
laws within the limitation of the exemptions  provided by any rule or regulation
thereunder,  including,  without  limitation,  Rules  144  and  144A  under  the
Securities Act.

29.  Miscellaneous.  The  headings  in this  Agreement  and in each of the other
     -------------
Operative  Documents  are for purposes of reference  only and shall not limit or
otherwise  affect the meaning hereof or thereof.  This Agreement  (together with
the other Operative  Documents)  embodies the entire agreement and understanding
among  you  and  the  Companies  and   supersedes   all  prior   agreements  and
understandings  relating to the subject matter hereof.  Each covenant  contained
herein and in each of the other Operative  Documents shall be construed  (absent
an  express  provision  to the  contrary)  as being  independent  of each  other
covenant contained herein and therein,  so that compliance with any one covenant
shall  not  (absent  such an  express  contrary  provision)  be deemed to excuse
compliance with any other covenant. If any provision in this Agreement or in any
of the other  Operative  Documents  refers to any action taken or to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be  applicable,  whether  such action is taken  directly or  indirectly  by such
Person,  whether  or not  expressly  specified  in such  provision.  In case any
provision in this  Agreement or any of the other  Operative  Documents  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 Agreement and, unless explicitly  provided otherwise  therein,  each of the
other Operative Documents,  may be executed in any number of counterparts and by
the parties hereto or thereto, as the case may be, 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.]

                                      -66-
<PAGE>

     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement on the accompanying counterparts of this letter, whereupon this letter
shall become a binding agreement under seal among you and the Companies.  Please
then return one of such counterparts to the Companies.


                                        Very truly yours,


                                        UNIDIGITAL INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        LINOGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        ELEMENTS (UK) LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNIDIGITAL ELEMENTS (SF), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -67-
<PAGE>


                                        UNISON (NY), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNISON (MA), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        MEGA ART CORP.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS HOLDING
                                          COMPANY, INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -68-
<PAGE>


                                        REGENT GROUP LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        INTERFACE GRAPHICS LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




The foregoing Agreement is hereby
agreed to as of the date thereof.



MASSACHUSETTS MUTUAL LIFE
  INSURANCE COMPANY



By  /s/ Richard C. Morrison
  ----------------------------------
        Managing Director    (Title)


                                      -69-
<PAGE>

     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement on the accompanying counterparts of this letter, whereupon this letter
shall become a binding agreement under seal among you and the Companies.  Please
then return one of such counterparts to the Companies.

                                        Very truly yours,

                                        UNIDIGITAL INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        LINOGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        ELEMENTS (UK) LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNIDIGITAL ELEMENTS (SF), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)



                                      -67-
<PAGE>


                                        UNISON (NY), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNISON (MA), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        MEGA ART CORP.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS HOLDING
                                          COMPANY, INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)



                                      -68-
<PAGE>


                                        REGENT GROUP LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        INTERFACE GRAPHICS LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




The foregoing Agreement is hereby
agreed to as of the date thereof.


C.M. LIFE INSURANCE COMPANY



By  /s/ Richard C. Morrison
  ------------------------------------
        Investment Officer     (Title)



                                      -69-
<PAGE>


     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement on the accompanying counterparts of this letter, whereupon this letter
shall become a binding agreement under seal among you and the Companies.  Please
then return one of such counterparts to the Companies.

                                        Very truly yours,


                                        UNIDIGITAL INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        LINOGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        ELEMENTS (UK) LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNIDIGITAL ELEMENTS (SF), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -67-
<PAGE>

                                        UNISON (NY), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNISON (MA), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        MEGA ART CORP.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS HOLDING
                                          COMPANY, INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)



                                      -68-
<PAGE>


                                        REGENT GROUP LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        INTERFACE GRAPHICS LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




The foregoing Agreement is hereby
agreed to as of the date thereof.

MASSMUTUAL CORPORATE INVESTORS



By  /s/ Richard C. Morrison
  --------------------------------
        Vice President     (Title)


The foregoing is executed on behalf of
MassMutual Corporate Investors, organized under
a Declaration of Trust, dated September 13, 1985, as
amended from time to time. The  obligations of such
Trust are not personally  binding upon, nor shall resort
be had to the property of, any of the Trustees,
shareholders, officers, employees or agents of such
Trust, but the Trust's property only shall be bound.



                                      -69-
<PAGE>





     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement on the accompanying counterparts of this letter, whereupon this letter
shall become a binding agreement under seal among you and the Companies.  Please
then return one of such counterparts to the Companies.

                                        Very truly yours,

                                        UNIDIGITAL INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        LINOGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        ELEMENTS (UK) LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNIDIGITAL ELEMENTS (SF), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -67-
<PAGE>


                                        UNISON (NY), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNISON (MA), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        MEGA ART CORP.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS HOLDING
                                          COMPANY, INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -68-
<PAGE>


                                        REGENT GROUP LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        INTERFACE GRAPHICS LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




The foregoing Agreement is hereby
agreed to as of the date thereof.


MASSMUTUAL PARTICIPATION INVESTORS



By  /s/ Richard C. Morrison
  ----------------------------------
        Vice President       (Title)

The foregoing is executed on behalf of MassMutual
Participation Investors, organized under a Declaration
of Trust,  dated April 7, 1988, as amended from time
to time. The obligations of such Trust are not
personally  binding  upon,  nor shall  resort be had to the
property of, any of the Trustees, shareholders,
officers, employees or agents of such Trust, but the
Trust's property only shall be bound.




                                      -69-
<PAGE>


     If you are in  agreement  with  the  foregoing,  please  sign  the  form of
agreement on the accompanying counterparts of this letter, whereupon this letter
shall become a binding agreement under seal among you and the Companies.  Please
then return one of such counterparts to the Companies.

                                        Very truly yours,

                                        UNIDIGITAL INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        LINOGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        ELEMENTS (UK) LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNIDIGITAL ELEMENTS (SF), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -67-
<PAGE>


                                        UNISON (NY), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        UNISON (MA), INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        MEGA ART CORP.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS HOLDING
                                          COMPANY, INC.



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        SUPERGRAPHICS CORPORATION



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




                                      -68-
<PAGE>


                                        REGENT GROUP LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)


                                        INTERFACE GRAPHICS LIMITED



                                        By: /s/ William E. Dye
                                           -------------------------------------
                                                Chief Executive Officer  (Title)




The foregoing Agreement is hereby
agreed to as of the date thereof.



MASSMUTUAL CORPORATE VALUE
  PARTNERS LIMITED

By Massachusetts Mutual Life Insurance
    Company, as Investment Manager



    By  /s/ Richard C. Morrison
      --------------------------------
            Managing Director  (Title)