EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of this 15th day of
December,  1998, is by and between Unidigital Inc., a Delaware  corporation with
an office for purposes of this  Agreement at 20 West 20th Street,  New York, New
York 10011  (hereinafter  the  "Company" or  "Employer")  and Peter Saad with an
address  at  328  Albany  Street,  New  York,  New  York  10280  (hereafter  the
"Employee").

                             W I T N E S S E T H :

 WHEREAS:

     (a) Company  wishes to engage the  services of Employee to render  services
for and on its behalf in accordance  with the following  terms,  conditions  and
provisions; and

     (b) Employee  wishes  to  perform  such  services  for and on behalf of the
Company, in accordance with the following terms conditions and provisions.

     NOW,  THEREFORE,  in  consideration  of the mutual covenants and conditions
herein  contained the parties hereto  intending to be legally bound hereby agree
as follows:

1.   EMPLOYMENT
     ----------

     Company hereby employs  Employee and Employee  accepts such  employment and
shall  perform  his  duties  and the  responsibilities  provided  for  herein in
accordance  with the terms and conditions of this  Agreement  principally in New
York City, New York.

                                       1
<PAGE>

2.   EMPLOYMENT STATUS
     -----------------

     Employee shall at all times be Company's  employee subject to the terms and
conditions of this Agreement.

3.   TERM
     ----

     The term of this  Agreement  shall commence on December 15, 1998, and shall
terminate on December 31, 2000, (the "Term"),  and may be extended upon mutually
agreed to terms and conditions.

4.   POSITION
     --------

     During Employee's employment  hereunder,  Employee shall serve as President
of the Company.  In such  positions,  Employee shall have the customary  powers,
responsibilities  and  authorities of officers in such positions of corporations
of the size, type and nature of the Company.  Employee shall perform such duties
and exercise such powers commensurate with his position and  responsibilities as
shall be reasonably  determined from time to time by William Dye,  currently the
Chairman of the Board,  President and Chief Executive Officer of the Company and
shall report directly to William Dye and only to William Dye.  Employee shall be
provided with an office, staff and other working facilities  consistent with his
position and as required  for the  performance  of his duties and as  reasonably
determined  by William Dye.  Employee  will  continue to serve on the  Company's
Board of Directors  during the Term and so long as he is employed by the Company
hereunder.  At such time as  Employee's  employment

                                       2
<PAGE>

hereunder ceases, for any reason  whatsoever,  Employee shall immediately submit
his resignation as a member of the Company's Board of Directors.

5.   COMPENSATION
     ------------

     (a)  For the  performance  of all of  Employee's  services  to be  rendered
pursuant to the terms of this  Agreement,  Company  will pay and  Employee  will
accept the following compensation:

     Base  Salary.  During the Term,  Company  shall pay the Employee an initial
     -------------
base  annual  salary  of  $500,000  (the  "Base  Salary")   payable  in  regular
installments  in accordance with the Company's  usual payment  practices  (which
currently is in equal biweekly installments). Employee shall be entitled to such
further increases,  if any, in his Base Salary as may be determined from time to
time in the sole discretion of William Dye; but, in any event, Employee shall be
entitled to receive an annual  increase equal to the increase in the CPI for the
New York  Metropolitan  Area over the base period,  as  hereinafter  used, on an
annual basis. The base period for determining whether Employee shall be entitled
to  any  increase in the Base Salary shall be the month of  December  1998.  The
increase  in the Base  Salary,  if any,  will be based  upon the  amount the CPI
increased  from  December  1998 to December  1999 and if there is an increase it
shall be effective in January 1999.  Employee's  Base Salary,  as in effect from
time to time, is hereinafter  referred to as the "Employee's  Base Salary".

     (b) Company  shall deduct and withhold  from  Employee's  compensation  all
required taxes,  including but not limited to Social  Security,  withholding and
otherwise,  and any  other  applicable  amounts  required  by law or any  taxing
authority.

                                       3
<PAGE>

6.   EMPLOYMENT BENEFITS
     -------------------

     During the Term hereof and so long as Employee is not terminated,  Employee
shall receive and be provided health insurance  benefits  including  medical and
hospitalization,   and  other  such   programs   established   by  the  Company,
(collectively "Employee Benefits") on the same basis as those other benefits are
generally  made  available to the  executives of the Company  provided  Employee
qualifies for them.

     Pursuant to a prior employment  agreement between the parties, the terms of
which are superseded by this Agreement, Employee received the option to purchase
125,000 shares of the Company's common stock. Those options are now fully vested

     Upon the execution of this Agreement,  Employee shall receive the option to
purchase  a  further  75,000  shares  of the  common  stock  of the  Company  in
accordance  with the procedures  and  provisions of the Company's  current Stock
Option plan.  Said options  shall vest  immediately  upon the  execution of this
Agreement.

     In the event this Agreement is terminated:

     (a)  by  Employer with cause, any stock  option rights that are then vested
shall remain vested in Employee  consistent with the terms of this Agreement and
any unvested stock option rights shall be forfeited ab initio;

     (b)  by  Employer  without  cause,  any stock  option rights that  are then
vested and any stock options  rights that will be vested within three (3) months
from  the  date of the  termination  shall  be and  remain  vested  in  Employee
consistent with the terms of this Agreement and any unvested stock option rights
not due to vest within three (3) months shall be forfeited ab initio;

                                       4
<PAGE>

     (c)  by  Employee,  any stock  option  rights that  are then  vested  shall
remain vested in Employee  consistent  with the terms of this  Agreement and any
unvested stock option rights shall be forfeited ab initio; and

     (d)  by  virtue  of the expiration  of the Term, Employee  shall retain all
vested option  rights for a period of ninety (90) days if the shares  underlying
the  options  have  been  registered  and for a period  of two (2) years for the
options on underlying shares that are  unregistered.  Employee shall be entitled
to receive not less than six weeks vacation for year one and four weeks vacation
for year two  during  the Term and  Employee  may  accrue  vacation  or  receive
compensation for unused vacation at the current level.

7.   BUSINESS EXPENSES AND PERQUISITES
     ---------------------------------

     (a)  Employee   shall  be  entitled  to  receive  reimbursement  from   the
Company for reasonable travel (business class), entertainment and other business
expenses  incurred by Employee in the  performance  of his duties  hereunder and
such  amount  shall be  reimbursed  by the  Company  on a  monthly  basis and in
accordance with Company policies then in effect.

     (b)  Employee shall be  entitled  to an  automobile  allowance  of $750 per
month  during the  Term and so  long as Employee's employment  hereunder is  not
terminated.

8.   TERMINATION
     -----------

     (a)  For Cause by the Company
          ------------------------

          (i)   Employee's employment hereunder may be terminated by the Company
for cause.  For purposes of this  Agreement,  "cause" shall mean (u)  Employee's
willful

                                       5
<PAGE>

dishonesty that is serious enough to have a materially  detrimental  effect upon
the Company's best interests, (v) Employee's gross negligence provided such acts
relate to the Company,  (w) Employee's breach of a material term or provision of
this  Agreement  which is not  cured or ceased  within  thirty  (30) days  after
forwarding to Employee  written notice setting forth the breach,  (x) Employee's
misconduct of a nature that is serious  enough to have a materially  detrimental
effect upon the Company's best interest,  (y) Employee's  unjustified failure to
perform his duties hereunder or to follow reasonable  directions of William Dye,
the  Company's  Board of  Directors,  which is not cured or ceased within thirty
(30) days after  forwarding to Employee written notice setting forth the breach,
and (z)  Employee's  conviction  of, or plea of nolo  contendere  to,  any crime
constituting  a felony under the laws of the United States or any State thereof,
or any crime constituting or involving moral turpitude.

          (ii)  If Employee is  terminated  for cause, he shall  be entitled  to
receive  Employee's Base Salary from Company through the date of termination and
Employee shall be entitled to no other payments of Employee's  Base Salary under
this Agreement.  Under all  circumstances  Employee shall keep his options which
have vested.  All other  benefits,  if any, due  Employee  following  Employee's
termination of employment  pursuant to this Subsection 8 (a) shall be determined
in  accordance  with the  plans,  policies  and  practices  of the  Company  for
executives.

     (b)  Disability or Death.
          --------------------

          (i)   Employee's employment  hereunder shall terminate  upon his death
or if Employee  becomes  physically or mentally  incapacitated  and is therefore
unable  (or will as a  result  thereof,  be  unable)  for a  period  of four (4)
consecutive months or for an

                                       6
<PAGE>

aggregate of eight (8) months in any twenty-four (24)  consecutive  month period
to  perform  his  duties  (such   incapacity  is  hereinafter   referred  to  as
"Disability"). Any question as to the existence of the Disability of Employee as
to which Employee and the Company cannot agree shall be determined in writing by
a qualified  independent  physician  mutually  acceptable  to  Employee  and the
Company. If Employee and the Company cannot agree as to a qualified  independent
physician,  each shall appoint such a physician and those two  physicians  shall
select a third who shall make such  determination  in writing to the Company and
Employee shall be final and conclusive for all purposes of this Agreement.

          (ii)  Upon termination of Employee's  employment hereunder  during the
Term as a result of death,  Employee's  estate or named  beneficiary (ies) shall
receive from the Company (x) Employee's Base Salary at the rate in effect at the
time of Employee's  death through the end of the month in which his death occurs
and (y) the proceeds of any life insurance policy  maintained for his benefit by
the Company.

          (iii) All  other  benefits, if any, due Employee  following Employee's
termination of employment  pursuant to this Subsection 8 (b) shall be determined
in accordance with the plans, policies and practices of the Company.

     (c)  Without Cause by the Company.
          -----------------------------

          (i)   If Employee's employment is  terminated by  the Company  without
cause (other than by reason of  Disability  or death),  then  Employee  shall be
entitled to payment  from the  Company,  in an amount equal to six (6) months of
Employee's Base Salary to be paid to Employee during immediately succeeding next
bi-weekly  intervals.  All  other  benefits,  if  any,  due  Employee  following
Employee's termination of

                                       7
<PAGE>

employment pursuant to this Subsection 8 (c) (i) shall be paid for the first six
(6) months immediately  following Employee's  termination  hereunder.  Also, any
stock options  rights that are then vested and any stock option rights that will
be vested  within  three  months from the date of the  termination  shall be and
remain  vested  in  Employee  consistent  with the terms of this  agreement.  If
Employer lawfully terminates employment  hereunder,  Employee shall have two (2)
years from the date of termination to exercise  vested  options,  if any, if the
underlying shares are unregistered;  and if the underlying share are registered,
then  Employee  shall  have  ninety  (90) days from the date of  termination  to
exercise vested options, if any.

     (d)  Termination  by  Employee.  If   Employee  wishes  to  terminate   his
          -------------------------
employment with the Company for any reason, Employee must afford Company with at
least three full months  written  notice of  termination.  Such  termination  by
Employee shall not be deemed a breach of this  Agreement.  If Employee  lawfully
terminates his employment hereunder,  Employee shall have two (2) years from the
date of termination to exercise vested options, if any, if the underlying shares
are  unregistered;  and if the underlying  shares are registered,  then Employee
shall have ninety  (90) days from the date of  termination  to  exercise  vested
options, if any.

     (e)  Change of Control.  For  purpose of this Agreement "Change of Control"
          -----------------
shall mean (i) any  transaction or series of  transactions  (including,  without
limitation, a tender offer, merger or consolidation) the result of which is that
any "person" or "Group"  (within the meaning of Sections  13(d) and 14(d) (2) of
the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  becomes
the  "beneficial"  owners (as  defined  in Rule 13 (d) (3) under the  Securities
Exchange Act of 1934) of more than fifty  percent

                                       8
<PAGE>

(50%) of the total aggregate  voting power of all classes of the voting stock of
the Company and/or warrants or options to acquire such voting stock,  calculated
on a  fully  diluted  basis,  or  (ii)  a sale  of  assets  constituting  all or
substantially  all of the assets of the Company  (determined  on a  consolidated
basis).  In the  event of such a  Change  of  Control  the new  entity  shall be
obligated to perform the Company's obligation under the terms of this Agreement.

9.   NON-DISCLOSURE OF INFORMATION
     -----------------------------

     Employee  acknowledges  that by virtue of his  position he will be privy to
the Company's trade secrets including but not limited to Company's customer list
and private  processes,  as they may exist or as Company may determine from time
to time,  and that such  secrets are  valuable,  special,  and unique  assets of
Company's business and constitute confidential  information and trade secrets of
Employer (hereafter  collectively  "Confidential  Information").  Employee shall
not,  while  employed  hereunder  and for a period  of twenty  four (24)  months
thereafter,   intentionally  disclose  all  or  any  part  of  the  Confidential
Information to any person,  firm,  corporation,  association or any other entity
for any reason or purpose  whatsoever,  nor shall  Employee and any other person
by,  through or with  Employee,  while  employed  hereunder  and for a period of
twenty  four  months  (24)  thereafter,  intentionally  make  use  of any of the
Confidential  Information for any purpose or for the benefit of any other person
or entity,  other than Company,  under any  circumstances.  Company and Employee
agree that a violation of the foregoing  covenants will cause irreparable injury
to the  Company,  and that in the  event of a breach

                                       9
<PAGE>

or threatened  breach by Employee of the  provisions  of this  Section,  Company
shall be entitled to an injunction restraining Employee from:

     (a)  Disclosing, in  whole or in part,  any Confidential Information to any
person,  firm,  corporation,  association  or  other  entity  to whom  any  such
information,  in whole or in part,  has been  disclosed or is  threatened  to be
disclosed in violation of this Agreement.

     (b)  Continuing such injurious actions.

     Nothing herein stated shall be constructed as prohibiting  the Company from
pursuing any other rights and  remedies,  at law or in equity,  available to the
Company for such breach or threatened breach,  including the recovery of damages
from the Employee.

10.  RESTRICTIVE COVENANT.
     ---------------------

     Without the prior  written  approval of the  Company's  Board of  Directors
first  obtained:

     (a)  For  a period  of  three (3)  months  after  the  termination of  this
Agreement  irrespective of whether Employee is desirous of extending the Term or
Employer is desirous of extending the Term,  Employee covenants and agrees that,
within a radius of twenty  five (25) miles from each of the then  present  place
(s) of  Company's  business  or any other  area in which  Company  is engaged in
business,  he  shall  not  own,  manage,  operate,   control,  be  employed  by,
participate  in, or be connected in any manner with the  ownership,  management,
operation, or control,  whether directly or indirectly,  as an individual on his
own  account,  or as a partner,  member,  joint  venture,  officer,  director or
shareholder of a corporation  or other entity (this  excludes  ownership of less
than five

                                       10
<PAGE>

(5%) percent of any public  company),  of any business similar to or competitive
with the type of business conducted by Company at the time of the termination or
expiration of this Agreement and for an additional three (3) months  immediately
thereafter  Employee  further  covenants  and agrees he shall not,  directly  or
indirectly,  in any  manner  whatsoever  interfere  with,  solicit or disrupt or
attempt to interfere with,  solicit or disrupt the relationship,  contractual or
otherwise,  between  Company and any customer,  supplier,  lessee or employee of
Company,  its parent or subsidiaries.  Employer shall have the absolute right to
extend  the three (3) month  non-compete,  non-solicitation  period for up to an
additional  eighteen  (18) months  upon the  transmission  of written  notice to
Employee. Employer shall notify Employee of its intent to exercise the option at
the expiration of the initial three (3) month cumulative period. If the Employer
chooses to extend the initial  three (3) month  period then the  Employer  shall
make the  contemporaneous  payment  to  Employee  of a sum equal to fifty  (50%)
percent of  Employee's  Base Salary for the period that  Employer is desirous of
extending the period.  Such right may be exercised on a month-to-month  basis by
Employer upon 30 days notice.

     (b)  For  the periods set  forth in the  immediately preceding subparagraph
(a) Employee covenants and agrees that within a radius of twenty-five (25) miles
from each of the then present place (s) of Company's  business or any other area
in which Company is engaged in business, he shall not render any services to any
person, firm, corporation,  association or other entity to whom any confidential
information  in whole or in part,  has been  disclosed  or is  threatened  to be
disclosed in violation of this Agreement.

                                       11
<PAGE>

     (c)  Company and Employee agree that a violation of either of the foregoing
covenants will cause irreparable injury to the Company, and that in the event of
a breach or  threatened  breach by Employee of the  provisions  of this Section,
Company shall be entitled to an injunction.

     (d)  Employee   acknowledges  that  the  restrictions  contained  in   this
Paragraph 10 are reasonable.  In that regard, it is the intention of the parties
to this  Agreement that the provisions of this Paragraph 10 shall be enforced to
the fullest extent  permissible  under the law and public policy applied in each
jurisdiction in which enforcement is sought. Accordingly, if any portion of this
Paragraph 10 shall be adjudicated or deemed to be invalid or unenforceable,  the
remaining  portions  shall remain in full force and effect,  and such invalid or
unenforceable  portion shall be limited to the particular  jurisdiction in which
such adjudication is made.

11.  BREACH OR THREATENED BREACH OF COVENANTS.
     -----------------------------------------

     In the event of Employee's  actual or threatened  breach of his obligations
under either  Paragraph 9 or 10, or both, of this Agreement,  in addition to any
other remedies Company may have, Company shall be entitled to obtain a temporary
restraining order and a preliminary and/or permanent injunction  restraining the
other  from  violating  these  provisions.  Nothing in this  Agreement  shall be
constructed to prohibit  Company from pursuing and obtaining any other available
remedies which Company may have for such breach or threatened breach, whether at
law or in equity, including the recovery of damages from the other.

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<PAGE>

12.  REPRESENTATIONS AND WARRANTIES BY EMPLOYEE.
     -------------------------------------------

     Employee  hereby  warrants  and  represents  that he is not subject to or a
party to any restrictive covenants or other agreements that in any way preclude,
restrict,  restrain or limit him (a) from being an Employee of Company, (b) from
engaging in the business of Company in any capacity, directly or indirectly, and
(c) from  competing with any other  persons,  companies,  businesses or entities
engaged in the business of Company.

13.  NOTICES.
     --------

     Any notice required,  permitted or desired to be given under this Agreement
shall be sufficient if it is in writing and (a) personally delivered to Employee
or an authorized member of Company, (b) sent by overnight delivery,  or (c) sent
by registered or certified  mail,  return  receipt  requested,  to Employer's or
Employee's  address as provided  in this  Agreement  or to a  different  address
designated in writing by either  party.  In all instances of notices to be given
to Company, a copy by like means shall be delivered to Company's counsel care of
Buchanan Ingersoll, College Centre, 500 College Road East, Princeton, New Jersey
08540. In all instance of notices to be given to Employee,  a copy by like means
shall be delivered to  Employee's  counsel care of  Kleinberg,  Kaplan,  Wolff &
Cohen,  P.C.,  551 Fifth  Avenue,  New York,  New York 10176,  Attn:  Fredric A.
Kleinberg, Esq.. Notice is deemed given on the day it is delivered personally or
by  overnight  delivery,  or five (5)  business  days after it is  received,  if
transmitted by the United States Post Office.

                                       13
<PAGE>

14.  ASSIGNMENT.
     -----------

     Employee   acknowledges   that  his  services  are  unique  and   personal.
Accordingly,  Employee  may not  assign  his  rights or  delegate  his duties or
obligations  under this Agreement.  Company's rights and obligations  under this
Agreement  shall inure to the benefit of and shall be binding upon the Company's
successors and assigns. Company has the absolute right to assign it's rights and
benefits under the terms of this Agreement.

15.  WAIVER OF BREACH.
     -----------------

     Any waiver of a breach of a provision  of this  Agreement,  or any delay or
failure to  exercise a right  under a  provision  of this  Agreement,  by either
party,  shall  not  operate  or be  construed  as a waiver  of that or any other
subsequent breach or right.

16.  ENTIRE AGREEMENT.
     -----------------

     This Agreement contains the entire agreement of the parties.  It may not be
changed  orally  but only by an  agreement  in  writing  which is  signed by the
parties. The parties hereto agree that any existing employment agreement between
them shall terminate as of the date of this Agreement. All options allocated for
the Term as a  non-executive  director are to be granted on a pro rata basis for
the time served by Employee in such capacity.  These options vest upon the grant
and  employee  shall  have ten (10)  years  from the date of this  Agreement  to
exercise these options irrespective of Employee's relationship with the Company.

                                       14
<PAGE>

17.  GOVERNING LAW.
     --------------

     This  Agreement  shall be construed in accordance  with and governed by the
internal laws of the State of New York.

18.  SEVERABILITY
     ------------

     The invalidity or  non-enforceability of any provision of this Agreement or
application  thereof  shall not  affect  the  remaining  valid  and  enforceable
provisions of this Agreement or application thereof.

19.  CAPTIONS
     --------

     Captions in this Agreement are inserted only as a matter of convenience and
reference and shall not be used to interpret or construe any  provisions of this
Agreement.

20.  GRAMMATICAL USAGE
     -----------------

     In construing or  interpreting  this  Agreement,  masculine  usage shall be
substituted for those feminine in form and vise versa, and plural usage shall be
substituted  or singular  and vice  versa,  in any place in which the context so
requires.

21.  CAPACITY.
     ---------

     Employee has read and is familiar  with all of the terms and  conditions of
this  Agreement  and has the capacity to  understand  such terms and  conditions
hereof.  By  executing  this  Agreement,  Employee  agrees  to be  bound by this
Agreement and the terms and conditions hereof.

                                       15
<PAGE>

22.  COUNTERPARTS
     ------------

     This Agreement may be executed in two or more  counterparts,  each of which
shall be deemed to be original,  but all of which together shall  constitute one
and the same Agreement.

23.  ARBITRATION
     -----------

     Notwithstanding  anything  herein  to the  contrary,  but  except  for  any
injunction  provisions  provided for in this  Agreement,  any claim,  dispute or
controversy  arising from,  related to,  involving or pertaining to the terms or
provisions of or  relationship  created by this Agreement  shall be submitted to
binding arbitration under the rules of the American Arbitration Association then
obtaining  in the  County,  City  and  State  on  New  York  and  any  award  or
determination by the American Arbitration Association shall be final and binding
upon the  parties.  Any such  award or  determination  shall be capable of being
submitted to the United States  District Court Southern  District of New York or
the New York State Supreme Court for the County of New York as a final  judgment
-- and the  parties  hereto  consent to the  jurisdiction  of said courts as the
Courts with the sole and  exclusive  jurisdiction.  Each party shall bear his or
its own costs, including but not limited to attorneys' fees, of such arbitration
proceedings.

                                       16
<PAGE>

24.  REPRESENTATIVE BY THE COMPANY.
     ------------------------------

     Company  hereby   represents  that  this  Agreement  is  duly  and  validly
authorized  and  enforceable  against the Company in accordance  with its terms;
similarly all options granted herein have been duly and validly authorized.

25.  SUPERSEDING   AGREEMENT.  The   parties  understand  and  agree  that  this
     ------------------------
     Agreement  contains the entire agreement of the parties with respect to the
     subject  matter  hereof  and   supersedes   all  previous   agreements  and
     understandings between the parties with respect to its subject matter.

     IN WITNESS WHEREOF, each of the parities hereto has executed this Agreement
as of the date first hereinabove written.

                                            UNIDIGITAL INC.

                                            /s/ William E. Dye
                                            -----------------------------
                                            By: William E. Dye


                                            /s/ Peter Saad
                                            -----------------------------
                                            Peter Saad






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<PAGE>