SEPARATION AGREEMENT
                              --------------------

     SEPARATION  AGREEMENT (this "Agreement") dated as of September 18, 1997, by
and between  Unidigital Inc., a Delaware  corporation (the  "Corporation"),  and
Michael Brown ("Brown").

                              W I T N E S S E T H :
                              ---------------------

     WHEREAS, Brown is an executive officer and employee of the Corporation; and

     WHEREAS,  the  Corporation  and Brown  desire to provide  for the  amicable
severance of the employment relationship between the Corporation and Brown.

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

     1. Resignation.
        -----------

     (a) In connection with Brown's termination of employment by the Corporation
and, at the Company's request,  Brown hereby resigns as an executive officer and
employee  of the  Corporation,  including  all  affiliates  of the  Corporation,
controlling  corporations,  divisions and  subsidiaries of the Corporation  (the
"Affiliates"),  effective  as of the date  hereof.  Unless  otherwise  specified
herein,  all  references  herein to the  Corporation  shall  include each of the
Affiliates.

     (b) Upon the  execution  hereof and except as  otherwise  provided  herein,
Brown shall not be entitled to any further salary,  reimbursement  for expenses,
additional  stock options or other  compensation  (other than  applicable  COBRA
benefits) from the Corporation.

     2. Consideration.   The Corporation hereby agrees to provide Brown with the
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following separation benefits:

     (a) Upon the  execution  hereof,  a  one-time  lump sum  payment in the net
amount of $20,000,  such payment to be made by certified check, wire transfer or
Unidigital check;

     (b) For ninety (90) days,  commencing  as of the date  hereof,  Brown shall
continue to receive his salary (at the same amount payable  immediately prior to
Brown's last date of  employment),  payable in equal  installments in accordance
with the Corporation's general salary payment policies (it being understood that
payments are made to employees one week after services have been rendered to the
Corporation); and

     (c) Health  insurance  benefits (in the same manner and amount which exists
at the time of signing this Agreement) for four (4) months, commencing as of the
date hereof.

     3. Release by Brown. Except for the obligations expressly arising hereunder
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for the transactions  contemplated hereby,  Brown hereby fully,  irrevocably and
unconditionally  releases and discharges the Corporation,  its agents, officers,
employees,  shareholders,  directors,  successors  and assigns  from any and all
manner  of  claims,   complaints,   demands,  causes  of  action,   obligations,
<PAGE>

liabilities,  costs, expenses (including attorneys' fees and costs) and damages,
of every kind,  either at law or in equity,  arising from his employment with or
separation of employment from the Corporation, including without limitation, any
claim  relating  to (i) health  benefit  claims  (other  than  applicable  COBRA
benefits),  (ii) any federal, state, or local employment  discrimination or fair
employment law, such as the federal Age Discrimination in Employment Act and the
Civil Rights Acts of 1964 and 1991,  (iii) any and all unused vacation time with
the  Corporation,  (iv) any taxes incurred  because of or in connection with the
provisions of this Agreement,  (v) any amounts now or hereafter claimed by Brown
as owed by the Corporation to Brown for the reimbursement of business  expenses,
and (vi) any  options or shares of  capital  stock now or  hereafter  claimed by
Brown as owed by the Corporation to Brown; provided,  however, that this release
shall not extend to  fraudulent  or criminal  conduct.  In addition,  and not in
limitation of the foregoing,  Brown hereby  forever  releases and discharges the
Corporation  from any  liability or obligation to reinstate or employ him in any
employment  capacity.  The  Corporation  acknowledges  that  Brown  was and will
continue to be  indemnified  for his  actions as an officer and  employee of the
Corporation and the Affiliates through the date of this Agreement and is covered
in such  capacities  during such time. The parties  hereto  understand and agree
that the foregoing release shall not adversely impact any indemnification rights
(including attorneys' fees and costs) Brown may have against the Corporation for
all acts taken by him as an officer or employee of the Corporation, prior to his
resignation of such positions,  to the fullest extent  permitted by Delaware law
and as provided in the  Corporation's  Certificate of Incorporation  and By-Laws
and by any private insurance maintained by the Corporation for such purpose.

     4. Release by the Corporation. The Corporation hereby fully, irrevocably
        --------------------------
and  unconditionally  releases and  discharges  Brown from any and all manner of
claims, complaints, demands, causes of action, obligations,  liabilities, costs,
expenses  (including  attorneys'  fees and costs) and  damages,  of every  kind,
either at law or in equity,  arising from Brown's  employment with or separation
of  employment  from  the  Corporation,  including  without  limitation  Brown's
services as an executive  officer of the Corporation;  provided,  however,  that
this release shall not extend to fraudulent or criminal conduct.

     5. Covenants Not to Sue.
        --------------------

     (a)  Brown  represents  and  warrants  that  he has not  filed,  nor has he
assigned  to any third  person,  any  complaints,  charges  or claims for relief
against the Corporation with any local, state or federal court or administrative
agency.  Brown further agrees and covenants not to sue or to bring, or assign to
any third person,  any claims or charges  against the Corporation or its agents,
officers,  employees,  shareholders,  directors,  successors  and  assigns  with
respect to any matter  arising  before the date hereof or covered by the release
set forth in Section 3, and not to assert  against the  Corporation in any suit,
action,  litigation or proceeding  any matter  arising before the date hereof or
covered by the release set forth in Section 3.

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<PAGE>

     (b) The Corporation  represents and warrants that it has not filed, nor has
it assigned to any third person,  any  complaints,  charges or claims for relief
against Brown with any local,  state or federal court or administrative  agency.
The  Corporation  further agrees and covenants not to sue or to bring, or assign
to any third  person,  any claims or charges  against  Brown with respect to any
matter  arising  before the date  hereof or covered by the  release set forth in
Section 4, and not to assert  against Brown in any suit,  action,  litigation or
proceeding  any matter  arising before the date hereof or covered by the release
set forth in Section 4.

     6. Property.  Brown agrees  promptly to return to the  Corporation any item
        --------
that is the property of the Corporation,  including  without  limitation any and
all  automobiles,  telephones,  telecopiers,  computers  and related  equipment,
documents,   books,  records,   memoranda,   plans,  computer  disks,  software,
addresses, telephone numbers, agreements, files and any other papers and written
data  relating to or in any way  connected  to the  business  and affairs of the
Corporation which are in the possession or control of Brown or in the possession
or  control  of a  member  of  Brown's  family  or an  entity  controlled  by or
affiliated with Brown.  Brown hereby agrees to make available to the Corporation
any such  material in either of their  possession  or control for review of such
item by the Corporation.

     7.  Ownership of Rights.  Any and all writings,  inventions,  improvements,
         -------------------
processes,  procedures  and/or  techniques  which  Brown  has  made,  conceived,
discovered  or  developed,  either  solely or jointly  with any other  person or
persons,  at any time during the term of his  employment  with the  Corporation,
whether  during working hours or at any other time and whether at the request or
upon the  suggestion  of the  Corporation  or  otherwise,  which  relate  to any
business carried on by the Corporation,  are the sole and exclusive  property of
the Corporation. Brown shall promptly make full disclosure to the Corporation of
all  such  writings,  inventions,   improvements,   processes,   procedures  and
techniques,  and shall do everything necessary or desirable to vest the absolute
title thereto in the Corporation.

     8. Non-Disclosure of Information.  Brown acknowledges that by virtue of his
        -----------------------------
position  he has  been  privy to the  Corporation's  and the  Affiliates'  trade
secrets  including  but not  limited to the  Corporation's  and the  Affiliates'
customers list and private  processes,  as they may exist or as the  Corporation
and the  Affiliates  may determine  from time to time, and that such secrets are
valuable,  special,  and unique assets of the  Corporation's and the Affiliates'
business  and  constitute  confidential  information  and trade  secrets  of the
Corporation   and   the   Affiliates   (hereafter   collectively   "Confidential
Information").  Brown  shall  not,  for a  period  of two (2)  years  after  the
execution  of this  Agreement,  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 Brown and any other person by,
through or with Brown,  and for a period of two (2) years after the execution of
this Agreement,  make use of any of the Confidential Information for any purpose
or for the benefit of any other person or entity,  other than the Corporation or
the Affiliates, as the case may be, under any circumstances. Additionally, Brown
shall  not take  any  action  which in any  manner  shall be  intended  to be or
reasonably be calculated to be injurious to the  Corporation or the

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<PAGE>

Affiliates.  The  Corporation  and Brown agree that a violation of the foregoing
covenants  will cause  irreparable  injury to the  Corporation,  and that in the
event of a breach  or  threatened  breach  by  Brown of the  provisions  of this
Section 8, the Corporation shall be entitled to an injunction  restraining Brown
from:

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

     (b)  Continuing  such  injurious  actions.  Nothing  herein stated shall be
construed as  prohibiting  the  Corporation  from  pursuing any other rights and
remedies,  at law or in equity,  available to the Corporation for such breach or
threatened breach, including the recovery of damages from Brown.

     9. Restrictive Covenant.
        --------------------

     (a) For a period of one (1) year  after the  execution  of this  Agreement,
Brown covenants and agrees that,  within a radius of twenty-five (25) miles from
each of the present places of the Corporation's and the Affiliates' 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  venturer,   officer,  director  or  shareholder  of  a
corporation  or other  entity,  of any business of the same kind as the business
currently  conducted by the  Corporation  or the  Affiliates  at the time of the
execution of this Agreement (a  "Competitive  Business"),  except that Brown may
own not more than two percent  (2%) of the  outstanding  shares of any  publicly
held  corporation  which is a Competitive  Business  which has shares listed for
trading on a securities  exchange  registered  with the  Securities and Exchange
Commission or through the automatic quotation system of a registered  securities
association.

     (b) For a period of one (1) year  after the  execution  of this  Agreement,
Brown  further  covenants  he shall not  interfere  with,  solicit or disrupt or
attempt to interfere with,  solicit or disrupt the relationship,  contractual or
otherwise, between the Corporation or the Affiliates and any customer, supplier,
lessee or employee of the Corporation or the Affiliates.

     (c) Brown  acknowledges  that the restrictions  contained in this Section 9
are  reasonable.  In that  regard,  it is the  intention  of the parties to this
Agreement that the provisions of this Section 9 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 Section 9
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.

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<PAGE>

     10.  Specific  Performance.  Brown  acknowledges  that any breach by him of
          ---------------------
Sections 7, 8 or 9 of this Agreement would  substantially  and materially impair
and  irreparably  harm  the  Corporation's  business  and  goodwill;  that  such
impairment  and  harm  would be  difficult  to  measure  and,  therefore,  total
compensation  in solely  monetary  terms would be  inadequate.  Brown  therefore
agrees that in the event of any breach or  threatened  breach by him of Sections
7, 8 or 9 of this Agreement,  the Corporation shall be entitled,  in addition to
monetary damages or other remedies,  to equitable relief,  including  injunctive
relief,  and  payment  by  Brown  of all  costs  and  expenses  incurred  by the
Corporation in enforcing said Section  against him,  including  attorneys'  fees
incurred  by  the  Corporation;   provided,  however,  that  in  the  event  the
Corporation  is  unsuccessful   in  obtaining  the  judicial  relief   requested
hereunder,  Brown shall be entitled to payment by the  Corporation  of all costs
and expenses incurred by Brown in defending the Corporation's  claims hereunder,
including reasonable attorney's fees incurred by Brown.

     11. Confidentiality.  The parties hereto agree that a material item of this
         ---------------
Agreement is an agreement to keep  confidential the terms and conditions of this
Agreement.  No disclosure  shall be made by any of the parties  hereto except to
the extent  that any of the  parties is  obligated  to make  disclosure  to such
party's attorneys and accountants in the rendering of professional  services, or
pursuant to the  securities  laws or any other laws of the United  States or any
other state.

     12.  Non-Disparagement.  Each of the  parties  agree  not to  engage in any
          -----------------
conduct or make any  statement  that would  disparage  the other  party or their
respective business interests in any way.

     13. Further Assurances; Cooperation.
         -------------------------------

     (a) The parties  hereto agree to execute and deliver such other  documents,
instruments  and  agreements  and to take such other action as may be necessary,
proper or appropriate to carry out the terms of this Agreement.

     (b) Brown agrees to use his reasonable  efforts to cooperate and assist the
Corporation  at its cost and expense  (including  any  reasonable  out-of-pocket
expenses  incurred by Brown in furtherance of this Section  13(b)),  but without
remuneration  to Brown,  upon the request of the  Corporation,  in defending any
claims, suits, actions, litigation,  demands, losses or controversies whatsoever
against the Corporation that arise from the activities of the Corporation  prior
to the date of the  effectiveness  of  Brown's  resignation  as an  officer  and
employee of the Corporation,  provided that the Corporation  provides reasonably
sufficient notice to Brown and that Brown's efforts will only be required during
normal business hours.

     14. Breach. The parties agree that in the event one party breaches any part
         ------
of this Agreement,  legal  proceedings may be instituted  against that party for
breach of contract.  The  non-prevailing  party in such legal  proceedings shall
reimburse the prevailing party for the reasonable 

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<PAGE>

costs and expenses,  including reasonable attorneys' fees, incurred. The parties
further  agree that the  "prevailing  party"  shall be  determined  by the judge
rendering the decision in such  proceeding and that the parties will be bound by
such judge's decision.

     15. Notices.  All notices  required or permitted under this Agreement shall
         -------
be in writing and delivered by any method  providing for proof of delivery.  Any
notice  shall be deemed to have been given on the date of delivery to a location
specified  by the other  party,  or by attempted  delivery  with proof  thereof.
Notices  shall be delivered to the parties at the  following  addresses  until a
different address has been designated by notice to the other party:

               If to the Corporation:

               Unidigital Inc.
               545 West 45th Street
               New York, New York  10036
               Attention:  William E. Dye, President and
                                Chief Executive Officer

               With a copy to:

               Buchanan Ingersoll
               500 College Road East
               Princeton, New Jersey 08540
               Attention:  David J. Sorin, Esq.

               If to Brown:

               450 West 24th Street
               Apt. 10E
               New York, New York 10011

               With a copy to:

               Shereff, Friedman, Hoffman & Goodman, LLP
               919 Third Avenue
               New York, New York 10022
               Attention:  David Hoffner, Esq.

     16.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
          ------------
counterparts,  each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

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<PAGE>

     17. Entire  Agreement.  This Agreement  contains the entire agreement among
         -----------------
the  parties  hereto  with  respect  to  the  subject  matter  hereof,   and  no
modification hereof shall be effective unless in writing and signed by the party
against  which it is sought to be  enforced.  Except  as set forth  above,  this
Agreement  supersedes  all prior  understandings,  negotiations  and  agreements
relating to the subject matter hereof. Brown and the Corporation affirm that the
only consideration for executing this Agreement are the terms stated herein, and
that no other  promises  or  agreements  of any kind  have  been made to or with
either of them by any  person or entity  whatsoever  to cause  them to sign this
Agreement. The Corporation represents that it has the corporate power, authority
and legal right to deliver this Agreement and that the  execution,  delivery and
performance of this Agreement by the Corporation has been duly authorized by all
necessary  corporate action.  Brown represents that he has had an opportunity to
discuss and review the terms of this  Agreement  fully with his attorney.  Brown
further  represents that he has carefully read this  Agreement,  understands the
contents hereof, and executes the same as his own free act.

     18.  Expenses.  Each of the  parties  hereto  shall bear such  party's  own
          --------
expenses in  connection  with this  Agreement and the  transaction  contemplated
hereby.

     19.  Governing Law;  Jurisdiction.  This Agreement shall be governed by and
          ----------------------------
construed in  accordance  with the laws of the State of New York  applicable  to
agreements  made and to be  performed  entirely  within such  State.  Any action
arising out of or relating to any of the provisions of this  Agreement  shall be
brought  and  prosecuted  only in the courts of, or located in, the State of New
York,  and the  parties  hereto  consent to the  jurisdiction  and venue of said
courts.

     20. Headings.  The headings in this Agreement are solely for convenience of
         --------
reference  and shall not  affect  the  interpretation  of any of the  provisions
hereof.

     21.  Severability.  If any provision  herein  contained shall be held to be
          ------------
illegal  or  unenforceable,  such  holding  shall not  affect  the  validity  or
enforceability of the other provisions of this Agreement.

     22. Binding  Effect.  This Agreement shall be binding upon and inure to the
         ---------------
benefit of the Corporation and the Affiliates,  and their respective  successors
and  assigns,   and  upon  Brown  and  his  executors,   administrators,   legal
representatives, heirs and assigns.

                                    * * * * *


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<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Separation
Agreement to be executed as of the date first above written.


                                   UNIDIGITAL INC.


                                   By/s/ Peter Saad
                                     -------------------------------------
                                     Peter Saad, Senior Vice President and
                                     Chief Operating Officer


                                     /s/ Michael Brown                    
                                     -------------------------------------
                                         Michael Brown




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