ASSET PURCHASE AGREEMENT


     Agreement  made as of the 26th day of March,  1999 by and among  Unidigital
Inc., a Delaware  corporation with its principal office at 229 West 28th Street,
New York, New York 10001  ("UNIDIGITAL"),  its wholly owned  subsidiary,  Unison
(NY),  Inc., a Delaware  corporation with its principal office at c/o Unidigital
Inc.,  229 West 28th  Street,  New York,  New York (the  "BUYER"),  Peter  X(+C)
Limited,  a New York  corporation with its principal office at 200 Varick Street
(#600) New York, New York (the "SELLER") and Peter  Ksiezopolski,  the holder of
all the issued and outstanding capital stock of the Seller (the  "SHAREHOLDER").
The Seller and the Shareholder are sometimes  collectively referred to herein as
the "SELLING PARTIES."

                              Preliminary Statement
                              ---------------------

     The Seller is engaged  principally  in the digital  prepress  business (the
"BUSINESS").  The Buyer  desires to  purchase,  and the Seller  desires to sell,
certain of the assets and the Business of the Seller,  for the consideration set
forth below and the assumption of certain of the Seller's  liabilities set forth
below, subject to the terms and conditions of this Agreement.

     NOW,  THEREFORE,  in consideration  of the mutual promises  hereinafter set
forth and other good and valuable consideration,  the receipt of which is hereby
acknowledged, the parties hereby agree as follows:

         1.                Sale and Delivery of the Assets
                           -------------------------------

         1.1               Delivery of the Assets.
                           ----------------------

                  (a)  Subject  to and upon the  terms  and  conditions  of this
Agreement,  except as  specifically  provided in Section 1.1(b)  hereof,  at the
closing of the transactions contemplated by this Agreement (the "CLOSING"),  the
Seller shall sell,  transfer,  convey,  assign and deliver to the Buyer, and the
Buyer shall purchase from the Seller, free and clear of all liens,  liabilities,
security   interests,   leasehold  interests  and  encumbrances  of  any  nature
whatsoever  (except  as  otherwise  expressly  provided  herein),   all  of  the
properties, assets and other claims, rights and interests of the Seller or which
are used in the Business of whatever  kind,  character or  description,  whether
real, personal or mixed,  tangible or intangible,  wherever situated,  including
without limitation:

                    (i)    all inventories of raw  materials, work  in  process,
goods in  transit (i.e., inventories  purchased  by, but  not  delivered to, the
Seller),  finished   goods,  office  supplies, maintenance  supplies,  packaging
materials, spare parts and similar items (collectively, the "INVENTORY");

                    (ii)   all   accounts  receivable   and   notes   receivable
(including   any  security  held   by   the  Seller  for  the  payment  thereof)
(collectively, the "ACCOUNTS RECEIVABLE");

<PAGE>

                    (iii)  those prepaid  expenses  set forth in Schedule 1.1(a)
                                                                 ---------------
(iii);
-----

                    (iv)   all  rights under  the contracts, agreements, leases,
licenses, purchase orders, customer sales agreements  and  other instruments set
forth on Schedule 2.13(a) attached hereto (collectively, the "CONTRACT RIGHTS");
         ---------------

                    (v)    all  bank accounts  of  the Business and other assets
listed on Schedule 2.9;

                    (vi)   all books; payment records; accounts; customer lists;
environmental reports or studies; correspondence; production records; technical,
accounting, manufacturing and  procedural manuals; engineering data; development
and design  data; plans, blueprints, specifications and drawings; employment and
personnel  records;  and  other  useful business  records,  including electronic
media,  and  any  confidential or other information  which  has been  reduced to
writing, utilized in the conduct of  or relating to  the Business  or the Assets
as hereinafter defined), subject to the Seller's right to retain  copies thereof
which the Seller  reasonably requires for  its ongoing  operation, winding-up or
dissolution;

                     (vii)  all rights of  the Seller  under  express or implied
warranties  from the  suppliers of  the Assets  to the  extent transferable (but
excluding such rights insofar as the same pertain to liabilities retained by the
Seller hereunder);

                     (viii) the motor  vehicles  and other  rolling stock listed
on Schedule 1.1(a)(viii);
   ---------------------

                     (ix)   all  of  the   machinery,  equipment,  tools,  dies,
tooling,  production fixtures, maintenance machinery and  equipment,  computers,
telecommunication  systems,  fittings  and other office equipment and furniture,
whether or  not reflected  as capital  assets in the  accounting  records of the
Seller  which  are  owned  by  the Seller  and  used  or useful in the  Business
including but not limited to all of  the foregoing located at  the locations set
forth on Schedule 2.8 (collectively, the "FIXED ASSETS");
         ------------

                     (x)    all  right, title and interest of the  Seller in and
to all intangible property  rights relating  to  the Business, including but not
limited   to  inventions,  discoveries,  trade  secrets,  processes,   formulas,
know-how, United States and foreign patents, patent  applications, trade  names,
and those names  listed on  Schedule 2.20 attached hereto, trademarks, trademark
                            -------------
registrations, applications  for  trademark registrations, copyrights, copyright
registrations, certification  marks, industrial  designs,  technical  expertise,
research data and other similar property and the registrations  and applications
for registration  thereof owned by the Seller or,  where not owned,  used by the
Seller  in the  Business and all  goodwill associated therewith and all licenses
and other agreements to which the Seller is a party (as  licensor  or  licensee)
or by  which the  Seller is bound  relating to  any of the  foregoing  kinds  of
property  or  rights   to   any  "know-how"  or  disclosure  or  use   of  ideas
(collectively, the "INTANGIBLE PROPERTY");

                                       -2-
<PAGE>

                     (xi)   all     transferable    approvals,   authorizations,
certifications,  consents,  variances,  permissions,  licenses and permits to or
from, or filings, notices or recordings to or with, federal, state, foreign, and
local governmental  authorities as held  or effected by the Seller in connection
 with the Assets; 

                     (xii)  all  of  the  Seller's  goodwill  and the  exclusive
right to use the names of the Seller as all or part of a corporate name;

                     (xiii) except  as  specifically  provided in Section 1.1(b)
hereof, all other assets, properties, claims, rights and interests of the Seller
which  relate to the Business and exist  on the date  hereof,  of every kind and
nature and description, whether tangible or intangible, real, personal or mixed;
and 

                     (xiv)  cash or cash equivalents ("CASH").

                  (b)  Notwithstanding  the  provisions of Section 1.1(a) above,
the assets to be transferred to the Buyer under this Agreement shall not include
(i) any of Seller's rights or  consideration  under this Agreement,  or (ii) any
refunds of  federal,  state,  foreign  or local  income or other tax paid by the
Seller,  or (iii) any insurance  policies  (including  life insurance  policies)
currently  held  by the  Seller  and  related  premium  agreements  for  general
liability,  product  liability  and workers  compensation  insurance for periods
prior  to the  date of  Closing,  (iv) any real  estate  or  leases,  subleases,
licensing or other interests  relating to real property  (including  proceeds or
consideration  for the  surrender  thereof and the return of  security  deposits
related thereto),  or (v) those assets listed on Schedule 1.1(b) attached hereto
                                                 --------------
(collectively, the "EXCLUDED ASSETS").

                  (c)  The  Inventory,  Accounts  Receivable,  Contract  Rights,
Fixed  Assets,  Intangible  Property,  Cash and  other  properties,  assets  and
business  of the  Seller  described  in  Section  1.1(a)  above,  other than the
Excluded Assets, shall be referred to collectively as the "ASSETS."

         1.2               Further Assurances.
                           ------------------

                  (a)  At the  Closing, the Seller  shall  execute and deliver a
Bill of Sale (the "BILL OF SALE")  substantially  in the form attached hereto as
Exhibit A, and the assignments  described in Sections 7.14(b) and (c) hereof. At
---------
any time and from time to time after the  Closing,  at the  Buyer's  request and
without  further  consideration,  the  Selling  Parties  (or  their  successors)
promptly  shall  execute  and  deliver  such  assignments  of  leases  and other
instruments of sale, transfer, conveyance, assignment and confirmation, and take
such other  action,  as the Buyer may  reasonably  request  to more  effectively
transfer,  convey and assign to the Buyer,  and to confirm the Buyer's title to,
all of the Assets and the Business,  to put the Buyer in actual  possession  and
operating control thereof, to assist Buyer in exercising all rights with respect
thereto and to carry out the purpose and intent of this Agreement.

                                       -3-
<PAGE>

                  (b)  The Selling  Parties and the Buyer each will use its best
efforts to obtain as  promptly  as possible  written  consents to the  transfer,
assignment or sublicense to the Buyer of all agreements,  commitments,  purchase
orders, contracts,  licenses,  leases, rights and other contract documents being
transferred  pursuant  to Section  1.1(a)  hereof  where the  approval  or other
consent of any other person is required.  If any such approval or consent cannot
be  obtained,  or if the parties  hereafter  agree in writing  that it is not in
their  respective  best  interests to obtain any such approval or other consent,
the Selling Parties will cooperate with the Buyer in any reasonable  arrangement
designed to provide the Buyer with  substantially  the same  benefits as if such
approval or other  consent had been  obtained and the  transfer  effected at the
Closing.

         1.3               Assumption of Liabilities.
                           -------------------------

                  (a)  At the Closing,  the Buyer  shall  execute and deliver an
Instrument  of   Assumption  of   Liabilities   (the   "ASSUMPTION   AGREEMENT")
substantially  in the form  attached  hereto as Exhibit B,  pursuant to which it
                                                ---------
shall assume and agree to (i) perform,  pay and  discharge,  in accordance  with
their  respective  terms,  all those  liabilities  and  obligations set forth on
Schedule  1.3(a)  attached  hereto which were incurred in the ordinary course of
---------------
business of the Business and are outstanding at the time of the Closing,  not to
exceed $200,000 unless  otherwise agreed by the Buyer (the obligations set forth
in (i) are  collectively,  the "ASSUMED CURRENT  LIABILITIES");  (ii) perform in
accordance  with their terms those  obligations  outstanding  at the time of the
Closing under the Contract  Rights;  and (iii) perform in accordance  with their
terms those  liabilities  arising after the time of Closing from any  agreement,
contract,  commitment or other contract  documents which the Buyer has requested
be  transferred  to it  pursuant  to  Section  1.1(a)  but which has not been so
transferred  due to the  failure of the Seller to obtain the consent or approval
required for such transfer,  provided that the Buyer has received  substantially
the same  benefit  of such  contract  as if such  consent or  approval  had been
obtained (the  obligations  set forth in (i), (ii) and (iii) are,  collectively,
the "ASSUMED LIABILITIES").

                  (b)  Except as otherwise  provided herein, the Buyer shall not
assume any of the  liabilities  of the Selling  Parties and shall  purchase  the
Assets free and clear of all liens, mortgages, security interests,  encumbrances
and claims and the Selling  Parties each  represent,  warrant and agree that the
Buyer shall not be or become  liable for any  claims,  demands,  liabilities  or
obligations  not  expressly  assumed in this  Agreement  of any kind  whatsoever
arising  out of or  relating  to the  conduct of the  Business  by Seller or the
Assets or Assumed  Liabilities  prior to the date hereof.  Without  limiting the
foregoing, the Buyer shall not at the Closing assume or agree to perform, pay or
discharge,  and the Selling Parties shall remain unconditionally liable for, all
obligations,  liabilities and commitments,  fixed or contingent,  of the Selling
Parties other than the Assumed Liabilities, including but not limited to:

                    (i)     severance,   termination  or   other   payments   or
benefits  (including  but not  limited  to post-retirement  benefits)  including
but not  limited   to those  owing  under  the Seller's severance policy or  any
employment  agreement to  any  employees (union or non-union), sales  agents  or
independent  contractors  employed   by  the   Seller  prior   to   the  Closing
(collectively,  "SELLER'S EMPLOYEES"),  liabilities arising  under  any federal,
state, local  or  foreign

                                      -4-
<PAGE>

"plant closing law",  liabilities  accruing under the Seller's  employee benefit
plans, vacation pay plans or programs, retirement plans, and liabilities for any
Employee Plan (as defined in Section 2.21 except those  liabilities  to Seller's
Employees who become employees of the Buyer after the Closing relating solely to
and arising solely out of their term of employment with the Buyer);

                    (ii)    worker's  compensation  claims  arising  from events
prior to the Closing;

                    (iii)   profit  sharing, stock  option or  other stock-based
awards made to Seller's Employees;

                    (iv)    liabilities  for   any   federal,  state,  local  or
foreign income taxes (including interest, penalties and additions to such taxes)
or any deferred income taxes of the Selling Parties;

                    (v)     liabilities  for   any   payroll   taxes  (including
interest,  penalties and additions to such  taxes),  except those liabilities to
Seller's Employees who become employees of the Buyer after the Closing  relating
solely to and arising solely out of their term of employment with the Buyer;

                    (vi)    liabilities     incurred    for    violations     of
occupational safety, wage,  health,  welfare,  employee benefit or environmental
laws or regulations prior to the date hereof;

                    (vii)   liabilities  to  the extent  related to the Excluded
Assets;

                    (viii)  any  tax (including but  not limited to any federal,
state, local or foreign income, franchise, single business, value added, excise,
customs,  intangible,  sales, transfer,  recording,  documentary  or  other tax)
imposed upon, or incurred by, the Selling  Parties,  if any, in connection  with
or related to  the Business,  this  Agreement or the  transactions  contemplated
hereby (including interest, penalties and additions to such taxes);

                    (ix)    liabilities  for  any  commercial  rent taxes to the
extent accrued but not paid prior to the date hereof;

                    (x)     other    than    the   Assumed    Liabilities,   any
liabilities  of the  Seller  to third  parties arising out of the failure of the
Seller  to  obtain  any  necessary  consents  to the assignment  to the Buyer of
contracts or leases to which the Seller is a party (including  damages  asserted
by third  parties for breach of such  contracts or leases due  to the failure to
obtain such consents);

                    (xi)    liabilities,  contingent  or  otherwise,  which  are
not disclosed on Schedule 1.3(a);
                 ---------------

                                      -5-
<PAGE>

                    (xii)   liabilities  for  borrowed   money  or  liabilities,
other than the Assumed Liabilities, to creditors of the Selling Parties;

                    (xiii)  liabilities of  the Seller for  any state  franchise
taxes or annual  license or other fees relating  to  qualification  as a foreign
corporation or authorization to do business in such states (including  interest,
penalties  and additions to such taxes and fees);

                    (xiv)   liabilities   for    borrowed    money   or    other
liabilities of Seller to its  shareholder.  It is expressly  agreed that sellers
shareholder  hereby  releases  Seller from, and waives repayment of, any and all
obligations of Seller to its shareholder;

                    (xv)    any   liability  associated    with    that  certain
lawsuit  entitled  Aileen Kuo, Plaintiff vs. Pei, Cobb, Freed & Partners, Simon,
                   -------------------------------------------------------------
Martin-Vegue, et.al. filed  in  San  Francisco County Superior Court as Case No.
--------------------
992115; and

                    (xvi)   any  other   liabilities  of   any  kind  or  nature
whether now in existence or arising hereafter not expressly assumed by the Buyer
under Section 1.3(a) hereof.

         1.4               Purchase Price.
                           --------------

                  (a)  The purchase price for the Assets shall be Three  Hundred
Seventy  Thousand  Dollars  ($370,000)  plus  certain  cash  proceeds  from  the
collection of Accounts  Receivable (as defined below) and a contingent  earnout,
all as  described  below,  plus  the  assumption  by the  Buyer  of the  Assumed
Liabilities (the "PURCHASE PRICE").

                  (b)  The Purchase Price shall be payable as follows:

                    (i)     At  the  Closing,  Buyer  shall  deliver  to  Seller
Forty  Thousand  (40,000)  shares  of restricted  Unidigital  common  stock (the
"UNIDIGITAL STOCK") (the "UNIDIGITAL STOCK CONSIDERATION");

                    (ii)    At  the  Closing, Buyer  shall pay to  Seller or its
designees  Seventy  Thousand  Dollars ($70,000) cash (together with the payments
referred to in Section 1.4(b)(iii) and 1.4(c) below, the "CASH CONSIDERATION");

                    (iii)   On  April 1, 2000,  Buyer shall pay to Seller or its
designees One Hundred  Thousand Dollars ($100,000); and

                    (iv)    Subject  to  the provisions of  this  Section 1.4(e)
(iv), an earnout payment (the "EARNOUT PAYMENT").  The Earnout  Payment shall be
due in  the event  that gross  sales less  discounts,  credits,  sales taxes and
delivery charges attributable to the sales efforts of  the Shareholder and Kathy
Wright for Unidigital and its  consolidated subsidiaries  (hereinafter  the "NET
SALES") for  any  of  the twelve (12) month periods ending March 31, 2000, March
31, 2001 and March 31, 2002 (each such twelve month period being  referred to as
an "EARNOUT  YEAR") exceed  $1,600,000 (the "BASE AMOUNT") as follows:

                                      -6-
<PAGE>

                         (A)  If the Net Sales for any  particular  Earnout Year
are greater than the Base Amount but less than Two Million Four Hundred Thousand
Dollars ($2,400,000),  then  the Seller shall  be paid an amount equal to twenty
percent (20%) of the sales in excess of the Base Amount for that Earnout Year.

                         (B)  If the Net Sales for any  particular  Earnout Year
are  equal  to or  greater  than  Two  Million  Four  Hundred  Thousand  Dollars
$2,400,000)  but  less   than   Three  Million  Two   Hundred  Thousand  Dollars
($3,200,000),  then  the  Seller  shall  be  paid an  amount equal to twenty-two
percent (22%) of the Net  Sales in excess  of the  Base Amount  for that Earnout
Year.

                         (C)  If the Net Sales for  any  particular Earnout Year
are  equal  to  or greater  than  Three  Million  Two  Hundred  Thousand Dollars
($3,200,000) but less than Four Million  Dollars ($4,000,000),  then  the Seller
shall be paid an  amount  equal  to twenty-four  percent (24%) of  the Net Sales
in excess of the Base Amount for that Earnout Year.

                         (D)  If the Net Sales for  any  particular Earnout Year
are  equal  to  or greater  than  Four Million  Dollars  ($4,000,000), then  the
Seller  shall  be  paid an amount equal to twenty-five  percent (25%) of the Net
Sales in excess of the Base Amount for that Earnout Year.

                         (E)  If the  Net Sales  for any particular Earnout Year
are  less  than  the Base  Amount, Seller  shall not  be entitled to any Earnout
Payment for that Earnout Year.

                         (F)  The Earnout Payment, if any, due in respect of the
Earnout Year ending  March 31, 2000 (the "FIRST EARNOUT YEAR")  shall be payable
in cash (or,  by further  mutual agreement of  the Buyer and the Seller, in some
combination  of  cash  and shares of  Unidigital stock) within  ninety (90) days
after the end of the First  Earnout Year or,  if disputed,  within ten (10) days
after  resolution  of the dispute as set forth below.

                         (G)  With respect to Earnout  Payments, if any, due for
the Earnout  Years ending March 31, 2001 and March 31, 2002  (respectively,  the
"SECOND  EARNOUT  YEAR" and "THIRD  EARNOUT  YEAR"),  fifty percent (50%) of the
Earnout Payment shall be paid to Seller in cash (or, by further mutual agreement
of the Buyer and the Seller in some combination of cash and shares of Unidigital
Sock) in twelve (12) equal monthly  installments.  Such  payments  shall be made
within thirty (30) days after the end of each calendar  month of the  applicable
Earnout Year but only to the extent  measured by Net Sales in excess of the Base
Amount which are actually  collected  prior to any such payment.  The balance of
the Earnout  Payments due for the Second Earnout Year and the Third Earnout Year
shall be paid within  ninety (90) days after the end of the  applicable  Earnout
Year, or, if disputed,  within ten (10) days after  resolution of the dispute as
set forth below.

                         (H)  Notwithstanding  anything  contained herein to the
contrary,  in  the  event   that  the  Shareholder  voluntarily  terminates  his
employment  with  the  Buyer, from  and 

                                      -7-
<PAGE>

after the date of such  termination,  the Seller  shall only be  entitled  to an
amount equal to one-half  (1/2) of the Earnout  Payment as set forth in Sections
1.4 (b)(iv)(A) through (D) above for the period after such termination.

                         (I)  Any  Earnout   Payment  made  hereunder  shall  be
accompanied by an accounting from the Buyer setting forth the basis on which the
calculation for the Earnout  payment was made. Also,  Seller  shall be  entitled
to audit  Unidigital's  books for the purposes of determining  the Net Sales for
any particular Earnout Year. In the event a dispute  regarding the amount of any
Earnout  Payment,  the Seller  shall  notify the Buyer in  writing (the "DISPUTE
NOTICE")  within sixty (60) days  after any such Earnout Payment shall have been
due. Within ten (10) days after receipt of the Dispute Notice, the parties shall
use their best efforts to resolve  such dispute.  Upon their  failure  to do so,
the  dispute  shall be  submitted  for arbitration as follows:

               (1)  The arbitrator  shall be a "Big Five" public accounting firm
located  in  the City  of New  York, State of New York (other than Ernst & Young
LLP), unless both parties agree on the  selection  of another arbitrator. In the
event the selected arbitrator declines or is unable to serve for any reason, the
parties shall select another  arbitrator. Upon their failure to agree on another
arbitrator, the jurisdiction of the Supreme Court of the State of New York shall
be invoked to make such selection.

               (2)  The  arbitrator   shall  follow  the  Commercial Arbitration
Rules of the American  Arbitration Association, except  as  otherwise   provided
herein. The arbitrator shall substantially comply  with  the rules of  evidence;
shall grant essential but limited  discovery;  shall provide for the exchange of
witness lists  and  exhibit  copies;  shall  conduct a   pretrial  and  consider
dispositive motions.  Each party shall have the right to request  the arbitrator
to make  findings  of specific factual issues.

               (3)  The arbitrator shall complete its proceedings and render its
decision  within forty (40) days  after submission  of the dispute to it, unless
both  parties  agree to  an  extension. Each  party  shall  cooperate  with  the
arbitrator  to comply  with  procedural  time requirements  and  the  failure of
either  to  do  so  shall  entitle  the  arbitrator  to  extend the  arbitration
proceedings accordingly and to impose sanctions on the party responsible for the
delay, payable to the other party.

               (4)  In   the  event  the  arbitrator  does   not   fulfill   its
responsibilities on a timely basis, either party shall have the right to require
a replacement and the appointment of a new arbitrator.

               (5)  The  decision of the  arbitrator  shall be final and binding
upon the parties and accordingly a judgment by a court of competent jurisdiction
may be entered in accordance therewith.

                                      -8-
<PAGE>

               (6)  Each  party shall be  responsible  for one-half (1/2) of the
fees of the arbitrator.  Additionally, if the arbitrator finds that the  Earnout
Payment  due  to  the Seller for any particular  Earnout  Year is three  percent
(3%) or more greater than the amount Buyer  has proposed  to pay, Buyer shall be
responsible  for the costs of Seller's audit of Net Sales.

                  (c)  Buyer  agrees to use   reasonable  efforts to collect the
accounts receivable of the Business existing as of the Closing Date as set forth
in Schedule  1.4(c) attached  hereto (the "ACCOUNTS  RECEIVABLE").  All proceeds
   ---------------
from the collection of the Accounts  Receivable  (net of third party  collection
costs) (the "ACCOUNTS RECEIVABLE PROCEEDS") shall be retained by the Buyer until
the Accounts  Receivable  Proceeds  equal the  aggregate  amount of the accounts
payable of the Business existing as of the Closing Date as set forth in Schedule
                                                                        --------
1.4(c)  attached  hereto  (the  "ACCOUNTS  PAYABLE").  All  Accounts  Receivable
------
Proceeds,  if any, in excess of an amount equal to the Accounts Payable shall be
paid to the Seller within ten (10) days after the end of each  calendar  quarter
in which they are  received,  beginning  with the quarter  ending June 30, 1999.
Notwithstanding  anything to the contrary  contained herein, no further Accounts
Receivable  Proceeds  shall be due to Seller with  respect to amounts  collected
after the quarter ending September 30, 2000 (the "PROCEEDS  TERMINATION  DATE"),
except for Accounts Receivable Proceeds collected after the Proceeds Termination
Date pursuant to litigation commenced prior to the Proceeds Termination Date. In
the event that, as of the Proceeds  Termination  Date,  the Accounts  Receivable
Proceeds  have been less  than the  Accounts  Payable  (as they  existed  on the
Closing Date) the Seller shall pay the Buyer the amount of the difference within
thirty (30) days.  If,  after such  payment,  Accounts  Receivable  Proceeds are
collected  pursuant  to  any  litigation  as  referenced  above,  such  Accounts
Receivable Proceeds shall be paid to Seller.

         1.5               The Closing.
                           -----------

                  (a)  The Closing shall take place at the  offices of the Buyer
(or at such other place as the parties may agree in writing) on March 30,  1999,
or such other date mutually  designated  by Seller and Buyer.  The date on which
the Closing is held is referred to in this Agreement as the "CLOSING  DATE".  At
the  Closing,  the  parties  shall make the  closing  deliveries  referred to in
Sections 7.14 and 8.6.

         1.6               Allocation of Purchase Price. The aggregate amount of
                           ----------------------------
the Purchase Price shall, for tax purposes  only, be allocated  among the Assets
and Assumed Liabilities  as the parties shall  mutually agree within thirty (30)
days of the Closing.  The Seller and the Buyer agree that they will not take any
position which  is materially  inconsistent  with  the allocations  thus  agreed
to in preparing income, capital or franchise tax returns.

         2.                Representations of the Selling Parties
                           --------------------------------------

                  The representations and warranties made by the Selling Parties
herein or in any instrument or document  furnished in connection  herewith shall
survive the Closing until (and  including) the third  anniversary of the Closing
Date.  The  representations  and warranties in this Section 2 or in any document
delivered to the Buyer  pursuant to this Agreement are deemed to be

                                      -9-
<PAGE>

material  and  the  Buyer  is  entering  into  this  Agreement  relying  on such
representations  and  warranties.  The Selling  Parties,  jointly and severally,
represent  and  warrant to the Buyer as follows  (it being  understood  that all
references  in this  Section 2 to the Seller  shall be deemed to include  any of
Seller's subsidiaries, unless the context otherwise requires):

         2.1               Organization.  The   Seller  is  a  corporation  duly
                           ------------
organized,  validly existing and in good standing under the laws of the state of
its  incorporation,  and has all requisite  power and authority  (corporate  and
other) to own its properties,  to carry on its business as now being  conducted,
to execute and deliver this  Agreement and the agreements  contemplated  herein,
and to consummate the transactions  contemplated hereby. Schedule 2.1 sets forth
                                                         ------------
the authorized and outstanding capital stock of the Seller as well as the record
and beneficial  owners thereof.  Except as set forth on Schedule 2.1, the Seller
                                                        ------------
does  not  own or  control  or  participate  in,  directly  or  indirectly,  any
corporation,  partnership,  association or business  entity.  The Seller is duly
qualified to do business and in good standing in all  jurisdictions in which its
ownership  of  property  or  the   character  of  its  business   requires  such
qualification. Schedule 2.1 contains a true, correct and complete list of all of
               ------------
the jurisdictions in which the ownership of the property used in the Business or
the nature of the Business requires qualification.

         2.2               Authorization.  The  execution  and  delivery of this
                           -------------

Agreement (and all other agreements  provided for herein) by the Seller, and the
consummation by the Seller of all  transactions  contemplated  hereby,  has been
duly  authorized  by  all  requisite  corporate  and  shareholder  action.  This
Agreement  and all  such  other  agreements  and  obligations  entered  into and
undertaken in connection with the transactions  contemplated hereby to which the
Seller is a party  constitutes the valid and legally binding  obligations of the
Seller, enforceable against it, in accordance with their respective terms except
as such enforceability may be limited by bankruptcy, insolvency,  reorganization
or similar laws affecting creditors' rights generally.  The execution,  delivery
and performance by the Seller of this Agreement and the agreements  provided for
herein,  and the  consummation  by the  Buyer of the  transactions  contemplated
hereby  and  thereby,  will not,  with or  without  the  giving of notice or the
passage  of time or  both,  (a)  violate  the  provisions  of any  law,  rule or
regulation  applicable  to  the  Seller;  (b)  violate  the  provisions  of  the
Certificate of Incorporation or Bylaws of the Seller;  (c) violate any judgment,
decree,  order or award of any court,  governmental  body or arbitrator;  or (d)
conflict  with or result in the breach or  termination  of any term or provision
of, or constitute a default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the properties or assets of the
Seller pursuant to, any indenture,  mortgage,  deed of trust or other instrument
or  agreement  to which any of them is a party or by which any of them or any of
their  properties is or may be bound,  other than with respect to obligations of
Seller which will be  discharged  at or prior to Closing.  Schedule 2.2 attached
                                                           ------------
hereto sets forth a true, correct and complete list of all consents,  approvals,
permissions,  licenses, authorizations and other requirements prescribed by law,
rule,  regulation  or by contract in  connection  with the  consummation  by the
Seller of the transactions  contemplated by this Agreement.  Except as indicated
on Schedule 2.2, all such items have been or will be, prior to the Closing Date,
   ------------
obtained and satisfied.

                                      -10-
<PAGE>

         2.3               Ownership  of the  Assets.  Except  as  set forth  on
                           -------------------------
Schedule 2.3 attached hereto, there are no claims, liabilities,  liens, pledges,
------------
charges,   encumbrances  and/or  equities  of  any  kind  affecting  the  Assets
(collectively,  the "ENCUMBRANCES").  The Seller is the true and lawful owner of
the  Assets,  and has the  right  to sell and  transfer  to the  Buyer  good and
marketable  title to all Assets,  which are free and clear of all  Encumbrances.
The  delivery  to  the  Buyer  of  the  instruments  of  transfer  of  ownership
contemplated by this Agreement will vest good and marketable title to all Assets
in the  Buyer,  free  and  clear  of all  liens,  mortgages,  pledges,  security
interests, restrictions, prior assignments,  encumbrances and claims of any kind
or  nature  whatsoever.  The  Assets  to be  conveyed  to  the  Buyer  hereunder
constitute all  properties,  assets,  rights and claims (except those related to
real  estate)  which are  necessary to or used in the conduct of the Business as
currently conducted by the Seller.

         2.4               Financial Statements.
                           ---------------------

                  (a)  The  Seller  has previously  delivered to  the  Buyer its
its  profit  and loss  statements  and a balance  sheet on a  compilation  basis
prepared by Fishman Ostroff Ruchowitz  Hausman,  PA for the years ended December
31, 1996 and 1997 and by Ruchowitz  Hausman  Palmieri &  Associates,  PA for the
year ended December 31, 1998, (collectively, the "FINANCIAL STATEMENTS").

                  (b)  The  Financial Statements   are  accurate  and  complete,
and fairly  present,  as of their  respective  dates,  the financial  condition,
retained  earnings  (deficit),  assets  and  liabilities  of the  Seller and the
results of  operations  of the  Seller's  business  for the  periods  indicated.
Nothing has come to the  attention of the Seller since the date of the Financial
Statements  which would lead it to believe that the reserves and accruals  shown
thereon are inadequate for all reasonably anticipated losses, costs and expenses
and the Seller reasonably  believes that such reserves and accruals are adequate
for all of such losses, costs and expenses.

         2.5               Litigation.  Except as set forth on Schedule 2.5, the
                           ----------                          ------------
Seller is not a party to, or to the Selling  Parties' best knowledge  threatened
with,  and none of the Assets are  subject  to, any  litigation,  suit,  action,
investigation  (to  the  best of the  Selling  Parties'  knowledge),  grievance,
arbitration,   proceeding,   or   controversy   or  claim   before   any  court,
administrative  agency or other governmental  authority relating to or affecting
the Assets or the business,  properties,  condition  (financial or otherwise) or
prospects of the Business.  The Seller is not in violation of or in default with
respect to any judgment,  order, award, writ, injunction,  decree or rule of any
court, governmental department, commission, agency, instrumentality, arbitrator,
administrative  agency  or  governmental  authority  or  any  regulation  of any
administrative agency or governmental authority, where such violation or default
would have a material adverse effect upon the Assets, the business,  properties,
condition  (financial  or  otherwise)  or  prospects  of  the  Business  or  the
consummation  of the  transactions  contemplated  hereby  (a  "MATERIAL  ADVERSE
EFFECT").  The Seller has not received  notice of any product  liability  claim,
warranty claim or other claim whatsoever which, if decided adversely, would have
a Material Adverse Effect.

                                      -11-
<PAGE>

         2.6               Insurance.  Schedule  2.6 sets forth a true,  correct
                           ---------   -------------
and complete list of all claims made since  January 1, 1996 on all fire,  theft,
casualty,  general  liability,  workers  compensation,   business  interruption,
environmental  impairment,  product  liability,  automobile and other  insurance
policies  insuring  the  Assets  or  business  of the  Business  and of all life
insurance policies maintained for any employees of the Business,  specifying the
type of  coverage,  the amount of  coverage,  the  premium,  the insurer and the
expiration date of each such policy  (collectively,  the "INSURANCE  POLICIES").
The Insurance  Policies are in full force and effect and are in amounts and of a
nature which are adequate and customary  for the business of the  Business.  All
premiums due on the  Insurance  Policies or renewals  thereof have been paid and
there is no default under any of the Insurance Policies.  Except as set forth on
Schedule 2.6, the Seller has not received any notice or other communication from
------------
any issuer of the Insurance Policies canceling or materially amending any of the
Insurance  Policies,  materially  increasing any deductibles or retained amounts
thereunder,  or  materially  increasing  the  annual or other  premiums  payable
thereunder,  and,  to  the  best  knowledge  of the  Selling  Parties,  no  such
cancellation,  amendment  or increase of  deductibles,  retainers or premiums is
threatened.

         2.7               [Intentionally Omitted]

         2.8               Fixed Assets. Schedule 2.8 sets forth a true, correct
                           ------------  ------------
and complete list of all Fixed Assets as of the date hereof.

         2.9               Bank Accounts; Securities.  Set forth in Schedule 2.9
                           -------------------------                ------------
is a list  of all  bank  accounts,  safe  deposit  boxes,  money  market  funds,
certificates of deposit,  stocks, bonds, notes and other securities in the names
of or owned or  controlled  by the  Seller,  all of which  are  included  in the
Assets.

         2.10              Change in Financial  Condition and Assets.  Except as
                           -----------------------------------------
set forth in Schedule 2.16,  since  December 31, 1998,  there has been no change
             -------------
which would result in a Material  Adverse  Effect.  The Selling  Parties have no
knowledge of any existing or threatened occurrence, event or development related
to the Assets or the business, properties, condition (financial or otherwise) or
prospects of the Business which could have a Material Adverse Effect.

         2.11              Accounts Receivable. Schedule 2.11 sets forth a true,
                           -------------------  -------------
correct and complete list of all Accounts Receivable, including an aging thereof
as of the  Closing  Date.  All  Accounts  Receivable  arose  out of the sales of
inventory  or services  in the  ordinary  course of business  and to the best of
Seller's  knowledge are collectible in the values set forth on Schedule 2.11 net
                                                               -------------
of the  respective  reserves  shown on the latest  balance sheet included in the
Financial Statements (which reserves are adequate and calculated consistent with
past  practice).  Except as set forth on  Schedule  2.11,  there is no  contest,
                                          --------------
claim,  or right of  set-off,  other  than  returns  in the  ordinary  course of
business,  under any contract or agreement with any account debtor of an Account
Receivable relating to the amount or validity of such Account Receivable.

         2.12              Books and Records. The general ledgers,  minute books
                           -----------------
and books of account of the Seller with  respect to the  Business,  all federal,
state, local and foreign income,

                                      -12-
<PAGE>

franchise,  property and other tax returns filed by the Seller,  with respect to
the Assets,  and all other  books and records of the Seller with  respect to the
Business,  all of which  have  been  made  available  to the  Buyer,  are in all
material  respects  complete and correct and have been  maintained in accordance
with good business  practice and in accordance  with all  applicable  procedures
required by laws and  regulations  other than any digression  from such practice
and  procedures  which has no material  and adverse  effect on the Assets or the
Business,  or the  valuations  thereof for the  purposes of this  Agreement,  as
conducted as of and prior to the Closing Date.

         2.13              Contracts and Commitments.
                           -------------------------

                  (a)  Schedule  2.13(a)  attached   hereto  contains   a  true,
                       -----------------
complete  and  correct  list and  description  of the  following  contracts  and
agreements, whether written or oral, which relate to the Business:

                    (i)    all   loan   agreements,  indentures,  mortgages  and
guaranties to which the Seller is a party or by which the Seller or its property
is bound;

                    (ii)   all  pledges,  conditional  sale  or  title retention
agreements, security agreements, equipment obligations, personal property leases
and lease purchase  agreements relating to any of the Assets to which the Seller
is a party or by which the Seller or any of its property is bound;

                    (iii)  all  contracts,  agreements,  commitments,   purchase
orders (other than  merchandise  deliveries to customers in the normal course of
business upon standard terms) or other  understandings  or arrangements to which
the  Seller is a party or by which  any of their  respective  property  is bound
which (A) involve  payments  or receipts by any of them of more than  $10,000 in
the  case  of any  single  contract,  agreement,  commitment,  understanding  or
arrangement  under  which  full  performance  (including  payment)  has not been
rendered  by all  parties  thereto or (B) may  materially  adversely  affect the
condition  (financial  or  otherwise)  or the  properties,  Assets,  business or
prospects of the Business;

                    (iv)    all collective bargaining agreements, employment and
consulting agreements,  non-competition agreements, trust agreements,  executive
compensation   plans,   bonus,   401(k),  or  profit-sharing   plans,   deferred
compensation agreements,  pension plans, retirement plans, employee stock option
or stock purchase plans and group life, health and accident  insurance and other
employee benefit plans, agreements, memoranda of understanding,  arrangements or
commitments  to which the Seller is a party or by which the Seller or any of its
property is bound;

                    (v)     all  agency,  distributor, sales  representative and
 similar agreements to which the Seller is a party;

                    (vi)    all   material   contracts,   agreements  or   other
understandings or arrangements, whether written or oral,  between the Seller and
any  shareholder,  employee, 

                                      -13-
<PAGE>

officer or director of the Seller which may affect the Assets or the Business as
conducted as of and prior to the date hereof;

                    (vii)   all  leases  (other  than  leases for  real estate),
whether  operating,  capital or  otherwise,  under which the Seller is lessor or
lessee, including, without limitation, all equipment leases;

                    (viii)  all contracts,  agreements  and  other documents  or
information  relating to past disposal of waste (whether or not hazardous) which
are available;

                    (ix)    all return policies and product warranties  relating
to products or goods manufactured or distributed by the Business as the same are
currently in effect or may have been in effect from time to time since  December
31, 1996, as well as any exception to such policies, all cooperative advertising
arrangements and all rebate, discount or allowance arrangements; and

                    (x)     any licensing  agreements, franchise  agreements and
 other material agreement or contract entered into by the Seller.

                  (b)  Schedule 2.13(b)  attached  hereto  sets  forth  a  true,
                       ----------------
correct and complete list of the contracts and  agreements,  whether  written or
oral,  which are to be  assigned  from the  Seller  to the Buyer at the  Closing
(collectively, the "Contracts").

                  (c)  Except   as   set   forth   on   Schedule  2.13(c),   the
                                                        -----------------
continuation,  validity and effectiveness of each Contract would not be affected
by the transfer thereof to the Buyer under this Agreement and all such Contracts
are assignable to the Buyer without a consent and:

                    (i)     each Contract is  a valid and  binding agreement  of
the Seller, enforceable against the Seller in accordance with its terms, and the
Selling  Parties have no knowledge  that any Contract is not a valid and binding
agreement of the other parties thereto:

                    (ii)    the Seller has fulfilled  all  material  obligations
required  pursuant to the  Contracts  to have been  performed by it prior to the
date hereof;

                    (iii)   the  Seller is not in breach of or default under any
Contract,  and no event has occurred which with the passage of time or giving of
notice or both would  constitute  such a default,  result in a loss of rights or
result  in the  creation  of any  lien,  charge or  encumbrance,  thereunder  or
pursuant thereto (an "INCHOATE DEFAULT"); and

                    (iv)    to the best knowledge of the Selling Parties,  there
is no  existing  breach or default by any other  party to any  Contract,  and no
Inchoate Default.

                  (d)  True, correct and complete copies of all of the foregoing
contracts  and  agreements  (other  than all  unfilled  purchase  orders and all
unfilled customer orders),

                                      -14-
<PAGE>

including but not limited to the Contracts,  and a list of all unfilled purchase
orders and all unfilled  customer  orders,  have been delivered by the Seller to
the Buyer prior to the date hereof.

         2.14              Compliance with Laws.  The Seller  has all  requisite
                           --------------------
licenses,  permits and certificates,  including health and safety permits,  from
federal,  state, local and foreign authorities necessary to conduct the Business
and own and operate the Assets (collectively, the "Permits"). Schedule 2.14 sets
                                                              -------------
forth a true,  correct and complete  list of all such  Permits,  copies of which
previously  have been  delivered by the Seller to the Buyer.  The Seller has not
engaged in any  activity  which would cause or, to the  knowledge of the Selling
Parties,  permit  revocation  or  suspension of any such Permit and no action or
proceeding  looking to or contemplating the revocation or suspension of any such
Permit is pending or  threatened.  There are no  existing  defaults  or Inchoate
Defaults by the Seller under any Permit.  The Selling  Parties have no knowledge
of any default or claimed or purported or alleged  default or Inchoate  Defaults
on the part of any party in the performance of any obligation to be performed or
paid by any party under any Permit.  Except as set forth in Schedule  2.14,  the
                                                            --------------
consummation of the  transactions  contemplated by this Agreement will in no way
affect the continuation, validity or effectiveness of the Permits or require the
consent of any third party under any such Permit. The Seller is not in violation
of any  law,  regulation  or  ordinance  (including  but not  limited  to  laws,
regulations  or  ordinances  relating to building,  zoning,  land use or similar
matters)  relating  to its  properties,  the  violation  of which  could  have a
material  adverse  effect on the Assets or the business,  properties,  condition
(financial or otherwise) or prospects of the Seller.  The business of the Seller
does not violate,  in any material  respect,  and the Seller is not in violation
of, any  federal,  state,  local or foreign  laws,  regulations  or orders,  the
violation or  enforcement  of which would have a material and adverse  effect on
the  Assets,  business,  properties,   condition  (financial  or  otherwise)  or
prospects of the Seller.  Except as set forth on Schedule  2.14,  the Seller has
                                                 --------------
not received any notice or communication from any federal,  state,  foreign,  or
local governmental or regulatory authority or otherwise of any such violation or
noncompliance  and  has not  received  any  notice  prior  to  such  time of any
violation that has not been cured.

         2.15              Employee Relations.
                           ------------------

                  (a)  The Seller is  in compliance  with  all material federal,
state,  local and foreign laws respecting  employment and employment  practices,
terms and conditions of employment,  and wages and hours,  and is not engaged in
any unfair labor  practice,  and there are no arrears in the payment of wages or
taxes or workers compensation assessments or penalties.

                  (b)  Except as set forth on Schedule 2.15:
                                              -------------

                    (i)    none of  Seller's  Employees  are represented by  any
labor union;

                                      -15-
<PAGE>

                    (ii)   there is no  unfair labor  practice complaint against
the Seller  pending  before the  National  Labor  Relations  Board or any state,
foreign, or local agency affecting the Seller;

                    (iii)  there is no pending  labor strike  or other  material
labor  trouble   affecting  the  Seller   (including  but  not  limited  to  any
organizational campaign);

                    (iv)   there is no material labor grievance pending  against
or affecting the Seller;

                    (v)    there    are   no   pending   organizing   activities
respecting the Seller's Employees;

                    (vi)   there are no pending  arbitration proceedings arising
out of or under any  collective  bargaining  agreement  to which the Seller is a
party,  or to the best knowledge of the Selling  Parties,  any basis for which a
claim may be made under any collective  bargaining agreement to which the Seller
is a party affecting the Seller's Employees;

                    (vii)  there is no pending  litigation, or other  proceeding
or basis for an unasserted  claim against the Seller by any employee or group of
employees or independent contractor or group of independent contractors which is
based on claims arising out of any employee's or group of employees'  employment
relationship  with  the  Seller  or any  independent  contractor's  or  group of
independent  contractors'  independent  consulting  relationship with the Seller
(insofar as such relationship pertains to the Business of the Seller), including
but not limited to claims for contract, tort, discrimination, employee benefits,
commissions, wrongful termination, age discrimination, sexual harassment, sexual
discrimination and any and all common law or statutory claims; and

                    (viii) since  March 1, 1999 there have been no new employees
or consultants hired by the Seller.

                  (c)  The  Seller  has  not violated  the Worker Adjustment and
Retraining  Notification Act, 29 U.S.C. Sections 2101-09 (the "WARN ACT") or any
similar state or local law. Since July 1, 1998, the Seller has terminated twelve
(12) employees.

         2.16              Absence of Certain Changes or Events. Since  December
                           ------------------------------------
31, 1998, the Selling  Parties have operated the Business in the ordinary course
and, except as set forth on Schedule 2.16, there has not been:

                  (a)  any   change  in  the  business,  financial condition  or
results  of  operations  of the  Business  that has had or could  reasonably  be
expected to have a Material Adverse Effect;

                                      -16-
<PAGE>

                  (b)  any  change  in  any  of the  Assets or any change in the
manner of conducting  the Business that has had or could  reasonably be expected
to have a Material Adverse Effect;

                  (c)  any  damage,  destruction or loss (whether or not covered
by  insurance)  that has had or could  reasonably be expected to have a Material
Adverse Effect;

                  (d)  any   material  change  in   the  accounting  methods  or
principles of the Seller that would be required to be disclosed  under generally
accepted accounting principles;

                  (e)  any material transaction  made by the Seller relating  to
the Assets or Business  (including  the  acquisition  or  disposition of Assets)
other than in the ordinary  course of business  consistent with past practice or
as otherwise permitted or contemplated by this Agreement;

                  (f)  any lien, security interest  or other Encumbrance created
or assumed by the Seller on any of the Assets;

                  (g)  any recall notices authorized or issued for any  products
relating  to the  Business  or any safety  investigations issued relating to the
Business;

                  (h)  any  notice  of  litigation,  warranty claim  or products
liability claim relating to the Business;

                  (i)  any  increases  in  salary  or  other  disbursements   or
distributions in any manner or form to shareholder, members, directors, officers
or employees  (or any related  party to any of the  foregoing)  of Seller or any
affiliated or related entities;

                  (j)  any  entering  into,  amendment  or  termination  of  any
material contract, agreement, lease, franchise,  security, instrument, permit or
license  between  the Seller and any party that has had or could  reasonably  be
expected to have a Material Adverse Effect; or

                  (k)  any existing agreement or arrangement made by the  Seller
to take any action  that would  cause any  representations  or  warranty in this
Section 2.16 to be untrue or incorrect.

         2.17              Customers.  The Seller has heretofore provided to the
                           ---------
Buyer a true,  correct  and  complete  list of the  names and  addresses  of all
customers of the Seller together with the annual dollar value of their accounts.
Except as set forth on Schedule  2.16  hereto,  none of the 15  customers  which
                       --------------
accounted  for the largest  dollar  volume of purchases  from the Seller for the
twelve  month   periods   ended   December  31,  1997  and  December  31,  1998,
respectively,  has  notified  the  Seller  that it intends  to  discontinue  its
relationship with the Seller nor, to the best of the Selling Parties' knowledge,
does  there  exist  any  actual  or  threatened  termination,   cancellation  or
limitation of, or any  modification  or change in, the business  relationship of
the Seller with any such  customer  nor does there exist a present  condition or
state of facts or  circumstances  known

                                      -17-
<PAGE>

to the Seller involving such customers which would  materially  adversely affect
the  Business  or  prevent  the Buyer from  conducting  the  Business  after the
consummation of the  transactions  contemplated by this Agreement in essentially
the same manner in which it has  heretofore  been  conducted by the Seller.  The
Seller has no consignment  sales in effect as of the date hereof and no customer
has any return rights except as set forth on Schedule 2.13(a).
                                             ----------------
         2.18              Suppliers.  Except  as set forth in Schedule 2.18 the
                           ---------                           -------------
Seller is not a party to any requirements  contract  relating to the purchase of
inventory, finished goods or other property used in the conduct of the Business.
None of the  Seller's  suppliers  has  notified  the  Seller  that it intends to
discontinue  its  relationship  with the  Seller,  nor raise its prices so as to
materially  adversely  affect  the  Business  nor,  to the  best of the  Selling
Parties'  knowledge,  does  there  exist any actual or  threatened  termination,
cancellation  or limitation of, or any  modification  or change in, the business
relationship  of the  Seller  with any such  supplier,  nor does  there  exist a
present  condition  or  state of facts  or  circumstances  known to the  Selling
Parties  involving such suppliers which would  materially  adversely  affect the
Business  or  prevent  the  Buyer  from   conducting   the  Business  after  the
consummation of the  transactions  contemplated by this Agreement in essentially
the same manner in which it has heretofore been conducted by the Seller.

         2.19              Prepayments  and  Deposits.  Except as  set  forth on
                           --------------------------
Schedule  2.19,  the Seller has no  prepayments  or deposits from  customers for
--------------
products to be shipped,  or services to be  performed,  by the Seller  after the
date hereof.

         2.20              Trade Names and Other Intangible Property.
                           -----------------------------------------

                  (a)  Schedule  2.20 attached hereto sets forth a true, correct
                       --------------
and complete list and a description of all Intangible  Property.  True,  correct
and  complete  copies of all  licenses  and  other  agreements  relating  to the
Intangible  Property have been previously  delivered by the Seller to the Buyer.
The Selling  Parties have no knowledge of any default or claimed or purported or
alleged  default or state of facts  which  with  notice or lapse of time or both
would  constitute a default on the part of any party in the  performance  of any
obligation  to be  performed  or paid by any  party  under any such  license  or
agreement. During the past five years the only name by which the Seller has been
known or  which  the  Seller  has used is its  corporate  name set  forth in the
preamble of this Agreement.

                  (b)  Except  as otherwise  disclosed in Schedule 2.20 attached
                                                          -------------
hereto, the Seller is the sole and exclusive owner, free and clear of all liens,
claims and restrictions,  of all Intangible  Property and all designs,  permits,
labels and packages used on or in connection therewith.  The Intangible Property
owned by the  Seller  is  sufficient  to  conduct  the  Business,  as  presently
conducted.  The Seller has  received no notice of, and has no  knowledge  of any
basis for, a claim against it that any of its operations,  activities,  products
or publications  infringes on any patent,  trademark,  trade name,  copyright or
other  property  right of a third  party,  or that it is  illegally or otherwise
using the trade secrets,  formulae or any property  rights of others.  Except as
otherwise  disclosed  in  Schedule  2.20,  the Seller  (i) has no disputes  with
                          --------------
or claims against any third party for  infringement  by such third party of  any
trade name or other Intangible Property of 

                                      -18-
<PAGE>

the Seller, and (ii) is not obligated or under any liability  whatsoever to make
any payments by way of royalties, fees or otherwise to any owner or licensee of,
or other  claimant  to, any patent,  trademark,  trade name,  copyright or other
property  right,  with  respect  to the use  thereof or in  connection  with the
conduct of the Business or otherwise.  The Seller has taken all steps reasonably
necessary  to protect its right,  title and  interest  in and to the  Intangible
Property.  Except  as set  forth  in  Schedule  2.20,  the  consummation  of the
                                      --------------
transactions  contemplated by this Agreement  (including any required financing)
will  in no way  affect  the  continuation,  validity  or  effectiveness  of the
Intangible  Property or require the consent of any third party in respect of the
Intangible Property.

         2.21              Employee Benefit Plans.
                           ----------------------

                  (a)  ERISA.  Except as set  forth   on  Schedule 2.21, neither
                       -----                               ------------
the Seller nor any person,  firm,  corporation or entity which is (or within the
past  five  years  has  been) a  member  with the  Seller  of a  "controlled  or
affiliated group", within the meaning of Section 414(b), (c), (m), (n) or (o) of
the Internal  Revenue Code of 1986,  as amended (the  "CODE"),  has  maintained,
sponsored or  contributed  to any  "pension  plan" within the meaning of Section
3(2)  of the  Employee  Retirement  Income  Security  Act of  1974,  as  amended
("ERISA"),  any "welfare  plan" within the meaning of Section 3(1) of ERISA,  or
any other employee benefit plan,  program,  practice or arrangement,  whether or
not subject to ERISA (a "NON-ERISA PLAN") (such pension plans, welfare plans and
non-ERISA plans of the Seller being herein referred to as the "EMPLOYEE PLANS").
Except as set forth on Schedule  2.21,  the Seller has provided the Buyer with a
                       --------------
true, correct and complete copy of each pension plan, each welfare plan and each
non-ERISA plan listed on such Schedule,  together with a copy of the most recent
summary plan  description and annual report (if applicable) with respect to each
such plan.  Except as set forth on Schedule  2.21,  each  pension plan listed on
                                   --------------
such  Schedule is a  "qualified  plan"  within the meaning of Section 401 of the
Code. Except as set forth on Schedule 2.21, each pension plan, each welfare plan
                             -------------
and each  non-ERISA  plan  listed  on such  Schedule  has been  administered  in
accordance  with its terms,  and each  pension  plan and  welfare  plan has been
operated and  administered  in accordance  with all applicable  requirements  of
ERISA and the  Code.  Without  limiting  the  generality  of the  foregoing,  no
trustee,  administrator,  sponsor,  or other  party-in-interest  or disqualified
person,  has engaged or participated in any  "prohibited  transaction",  as that
term is defined in Section  4975(c)(1) of the Code,  with respect to any pension
plan or welfare plan listed on Schedule 2.21. Without limiting the generality of
                               -------------
the  foregoing,  in  connection  with all welfare or  non-ERISA  plans which are
subject to  continuation  coverage  under Section 4980B of the Code, all notices
and elections  with respect to such  coverage have been made in compliance  with
the requirements of Section 4980B. With respect to each "defined benefit pension
plan",  as defined in Section 3(35) of ERISA,  identified on Schedule  2.21: (i)
                                                             --------------
the fair  market  value of the assets  thereof  as of the date  hereof is as set
forth  on  such  Schedule;  (ii)  the  present  value  of all  accrued  benefits
thereunder, determined as if such pension plan terminated on the date hereof, is
as set forth on Schedule 2.21; (iii) if any such plan is a "multiemployer plan",
                -------------
as  defined in  Section  3(37) of ERISA,  the  present  value of the  contingent
liability of the Seller both in the event of the termination of such plan and in
the event that the Seller withdraws  therefrom is as set forth on Schedule 2.21;
                                                                  -------------
(iv) no such plan has incurred an "accumulated funding deficiency", as such term
is defined in Section 302 of ERISA,

                                      -19-
<PAGE>

and (v) no such pension plan has  terminated,  nor has any  "reportable  event",
within the meaning of Section 4043 of ERISA, occurred with respect to such plan.
All  contributions  for all periods  ending prior to the date hereof  (including
periods  from the first day of the current plan year to the date hereof) will be
made prior to the date  hereof by the Seller in  accordance  with past  practice
with respect to pension plans,  welfare plans and non-ERISA plans. All insurance
premiums (including  premiums to the Pension Benefit Guaranty  Corporation) have
been paid in full,  subject  only to  normal  retrospective  adjustments  in the
ordinary course of business, with regard to applicable plans for policy years or
other applicable policy periods ending on or before the date hereof.

                  (b)  Claims and  Litigation.  Except as set forth on  Schedule
                       ----------------------                           --------
2.21, to the best of the Selling  Parties'  knowledge,  there are no  threatened
----
or pending claims,  suits or other proceedings by present or former employees of
Seller,  plan  participants,  beneficiaries  or spouses of any of the above, the
Internal Revenue Service, the Pension Benefit Guaranty Corporation, or any other
pension or entity  involving any Employee  Plan,  including  claims  against the
assets of any trust,  involving  any  Employee  Plan,  or any rights or benefits
thereunder, other than ordinary and usual claims for benefits to participants or
beneficiaries,  including claims pursuant to domestic relations orders and there
is no basis for any legal action,  proceeding or  investigation  with respect to
such plans.

         2.22              Disclosure.  No  representation  or  warranty  by the
                           ----------
Selling  Parties in this  Agreement  or in any exhibit  hereto,  or in any list,
statement,  document or  information  set forth in or  attached to any  Schedule
delivered  or to be  delivered  pursuant  to this  Agreement,  contains  or will
contain  any  untrue  statement  of a  material  fact or omits or will  omit any
material fact  necessary in order to make the statements  contained  therein not
misleading.  The Selling  Parties have disclosed to the Buyer all material facts
pertaining to the transactions contemplated by this Agreement.

         2.23              Brokers.  All   negotiations   relative    to    this
                           -------
Agreement and the transactions  contemplated  hereby have been carried on by the
Seller  without the  intervention  of any other person in such manner as to give
rise to any valid claim for a finder's fee,  brokerage  commission or other like
payment.

         2.24              Preservation  of  Assets.  The  Seller  has not sold,
                           ------------------------
assigned or transferred any of the Assets,  other than in the ordinary course of
business,  or declared or paid any dividend or other  distribution in respect of
shares of capital stock or made any purchase,  redemption or other  acquisition,
directly or indirectly,  of any outstanding  shares of its capital stock,  since
January  1,  1997.  Since  January  1,  1999 all of the Fixed  Assets  have been
maintained  and  serviced  in  accordance   with  normal  practice  and  repairs
maintenance  and  betterments  to such Fixed Assets have been made in the normal
course of business.


                                      -20-
<PAGE>

         2.25              Environmental Compliance.
                           ------------------------

                  (a)  The Seller has obtained  all permits,  licenses and other
authorizations  required  under  Federal,  state and  local  laws,  relating  to
protection of the Environment (as defined below), including laws relating to any
Release  (as  defined  below) of or presence  of  pollutants,  contaminants,  or
hazardous  or  toxic  materials  or  wastes  into or in  soil,  surface  waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air,
and/or  any  environmental   medium  (the  "ENVIRONMENT")  or  relating  to  the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport  or  handling  of  pollutants,  contaminants  or  hazardous  or  toxic
materials or waste. Schedule 2.25 hereto sets forth a complete and accurate list
                    -------------
of all such permits,  licenses and other authorizations  obtained by the Seller,
copies  of which  have  been  delivered  to the  Buyer.  The  Seller  is in full
compliance  with all terms and  conditions of such  permits,  licenses and other
authorizations.  To the best of the Selling  Parties'  knowledge,  except as set
forth on Schedule 2.25, there are no proposed or pending changes in the federal,
         -------------
state, county or local laws, regulations, standards, or in the Seller's permits,
licenses  or   authorizations   relating  to  pollution  or  protection  of  the
Environment  that would increase the present costs of compliance  with such laws
or change any methods of operation.

                  (b)  Except   as   indicated  on  Schedule   2.25 neither  the
                                                    ---------------
Seller nor, to the best of the Selling  Parties'  knowledge,  after due inquiry,
any of the Seller's,  employees,  agents,  contractors or  subcontractors  have,
used, generated, processed, stored, transported, recycled, Released or otherwise
handled any Hazardous  Materials (as defined  below) except as permitted by law,
on or about any real property related to the Seller's business,  including,  but
not  limited  to,  real  property   formerly  owned  or  leased  by  the  Seller
(collectively,  the "SELLER REAL  PROPERTY")  and the facilities now or formerly
leased or  operated  by the  Seller  (collectively,  the  "Seller  Facilities").
Additionally,  except  as  indicated  on  Schedule  2.25,  neither  the   Seller
                                          --------------
Facilities  nor the Seller Real  Property  is being used or has ever  previously
been  used  for  the  generation,  use,  processing,  storage,   transportation,
recycling,  Release or handling of any Hazardous Materials. In addition,  except
as  indicated on Schedule 2.25,  neither the Seller Facilities  nor  the  Seller
                 -------------
Real Property has ever been affected by any Hazardous Materials Contamination or
Environmental  Condition. The Seller, in the conduct of its business, is and has
been in compliance with all Environmental Laws. Notwithstanding any statement or
representation  to the contrary in any affidavit or other  document,  the Seller
affirmatively  represents  that as of the date  hereof,  the Seller has made all
filings  required  by RCRA and that there have been no failures by the Seller to
timely  report under CERCLA ss. 103 or RCRA ss. 304. The Seller has not received
any  written  notice  from  any  governmental  authority  or  any  other  person
respecting or related to any actual, threatened or potential Release or presence
of any Hazardous  Materials or any non-compliance with any Environmental Laws as
to which any such claimed  noncompliance  presently exists.  Notwithstanding the
preceding sentence, the Seller has not received any notice from any governmental
authority  respecting  noncompliance with RCRA and has not been notified that it
is a  potentially  responsible  party in  connection  with any site or  facility
governed  thereby or has any  liability  for offsite  disposal of any  Hazardous
Material.  No  investigation,   administrative  proceeding,   consent  order  or
agreement,  limitation  or  settlement  with  respect  to  Hazardous  Materials,
Hazardous Materials  Contamination or Environmental Condition is, to the best of
the

                                      -21-
<PAGE>

Selling Parties' knowledge, proposed,  threatened,  anticipated or in force with
respect to its business, nor has such property ever been on any Federal or state
"Superfund" or "Super Lien" list.

     As used in this Section 2.25, "DUE INQUIRY" shall mean that Selling Parties
have  made  inquiry  of all  of  Seller's  executives,  corporate  officers  and
directors  and  any  employee  or  agent  of  Seller  with   responsibility  for
environmental matters.

     As used herein "HAZARDOUS  MATERIALS"  include any (i) "HAZARDOUS WASTE" as
defined by The Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section
6901  et  seq.),  as  amended  from  time  to  time  ("RCRA"),  and  regulations
      -------
promulgated   thereunder;   and   "Hazardous   Substance"   as  defined  by  The
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C.  Section  9601 et seq.),  as amended  from time to time  ("CERCLA"),  and
                      ------
regulations  promulgated  thereunder;   (ii)  asbestos;   (iii)  polychlorinated
biphenyls;  (iv) any  substance,  the  presence of which on the  premises of the
Seller's  business,  is prohibited by applicable law; (v) oil,  petroleum or any
petroleum products or by-products;  (vi) any other substance which, according to
applicable law, requires special handling or notification of any Federal,  state
or local governmental entity in its collection,  processing,  handling, storage,
transport, treatment or disposal or exposure thereto; (vii) any substance, which
if not  properly  disposed  of,  may  pollute,  contaminate,  harm or  have  any
detrimental effect on the Environment; (viii) underground storage tanks, whether
empty,  filled  or  partially  filled  with any  substance;  and (ix) any  other
pollutant,  toxic substance,  hazardous  substance,  hazardous waste,  hazardous
material or hazardous substance as regulated by or defined in or pursuant to any
Environmental  law or any other  Federal,  state,  or local  environmental  law,
regulation, ordinance, rule, or by-law, whether existing on or prior to the date
hereof.

     As used  herein,  "HAZARDOUS  MATERIALS  CONTAMINATION"  shall  mean,  with
respect  to  any  premises,   building  or  facilities   or,  the   Environment,
contamination by a Release or the presence of Hazardous Materials.

     As used herein,  "ENVIRONMENTAL  CONDITION"  shall mean any condition  with
respect  to the  Environment  on or off the  Seller  Real  Property  and  Seller
Facilities,  whether or not yet  discovered,  which  could or does result in any
damage, loss, cost, expense,  claim,  demand,  order, or liability to or against
the  parties  hereto by any third  party  (including,  without  limitation,  any
government entity), including,  without limitation, any condition resulting from
the operation of Seller's  business  and/or the operation of the business of any
other property owner or operator in the vicinity of the Seller Real Property and
Seller  Facilities  and/or any activity or operation  formerly  conducted by any
person or entity on or off the Seller Real Property and Seller Facilities.

     As used  herein,  "RELEASE"  shall  mean any  spilling,  leaking,  pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing.

                                      -22-
<PAGE>

     As used herein, "ENVIRONMENTAL LAWS" shall mean any environmental or health
and/or  safety-related  law,  regulation,  rule,  ordinance,  or  by-law  at the
Federal,  state,  or  local  level,  whether  existing  as of the  date  hereof,
previously enforced, or subsequently enacted,  including but not limited to: (i)
Comprehensive Environmental Response,  Compensation,  and Liability Act of 1980,
as amended by the Superfund  Amendments and Reauthorization Act of 1986, 42 USCA
601 et  seq.;  (ii)  Solid  Waste  Disposal  Act,  as  amended  by the  Resource
    -------
Conservation  and Recovery Act of 1976,  as amended by the  Hazardous  and Solid
Waste  Amendments of 1984, 42 USCA 6901 et seq.;  (iii) Federal Water  Pollution
                                        ------
Control  Act of 1972 as amended by the Clean Water Act of 1977,  as amended,  33
USCA 1251 et seq.;  (iv) Toxic  Substances  Control Act of 1976, as amended,  15
          ------
USCA 2601 et seq.;  (v) Emergency  Planning and Community  Right-to-Know  Act of
          ------
1986, 42 USCA 11001 et seq.; (vi) Clean Air Act of 1966, as amended by the Clean
                    ------
Air Act of 1986,  as amended by the Clean Air Act  Amendments  of l990,  42 USCA
7401 et seq.; (vii) National  Environmental  Policy Act of 1970, as amended,  42
     ------
USCA 4321 et seq.;  (viii) Rivers and Harbors Act of 1970,  as amended,  33 USCA
          ------
401 et seq.; (ix) Endangered  Species Act of 1973, as amended,  16 USCA 1531, et
    ------                                                                    --
seq; (x) Occupational  Safety and Health Act of 1970, as amended, 29 USCA 651 et
---                                                                           --
seq.; (xi) Safe Drinking Water Act of 1974, as amended, 42 USCA 300 et seq., and
---                                                                 ------
any other federal,  state, or local law,  regulation,  rule,  ordinance or order
currently in existence which governs:

                    (i)     the  existence, cleanup  and/or remediation of toxic
or hazardous materials;

                    (ii)    the  Release,  emission,  discharge or  presence  of
Hazardous  Materials  into or in the Environment;

                    (iii)   the  control of Hazardous Materials; or

                    (iv)    the  use, generation, transport, treatment, storage,
disposal,  removal or  recovery of Hazardous Materials.

         2.26              Purchase for  Investment.  The Shareholder represents
                           ------------------------
that he is an  "accredited  investor",  within the meaning of Regulation D under
the  Securities  Act of 1933, as amended (the "1933 ACT"),  and is acquiring the
Unidigital Stock for his own account, for investment purposes only, and not with
a view to the resale or distribution of all or any part thereof. The Shareholder
has not offered or sold any portion of the  Unidigital  Stock and has no present
plan or intention of dividing such Unidigital  Stock with others or reselling or
otherwise  disposing of any portion of the Unidigital Stock, either currently or
after  the  passage  of a fixed or  determinable  period  of  time,  or upon the
occurrence or nonoccurrence  of any  predetermined  event or  circumstance.  The
Shareholder  agrees not to distribute or to transfer any of the Unidigital Stock
in the United  States  except in compliance  with all  applicable  United States
federal and state securities laws. The Shareholder  further  recognizes that the
Unidigital  Stock will not be  registered  under the 1933 Act or the  securities
laws of any state,  and the transfer of the same will be  restricted  under such
laws,  and the Unidigital  Stock cannot be sold except  pursuant to an effective
registration  statement  under  such laws or an  available  exemption  from such

                                      -23-
<PAGE>

registration, and the certificates representing the Unidigital Stock will bear a
legend  to such  effect.  The  Shareholder  acknowledges  and  understands  that
Unidigital  is under  no  obligation  to  register  the  Unidigital  Stock.  The
Shareholder is aware of Unidigital's  business affairs and financial  condition,
has had the opportunity to ask questions of Unidigital's management with respect
to its business  affairs and  financial  condition  and has acquired  sufficient
information  (including,  but not limited to,  Unidigital's  Form 10-KSB for the
fiscal year ended August 31, 1998, Unidigital's 1998 annual report, Unidigital's
1998 proxy statement and  Unidigital's  Form 10-Q for the quarter ended November
30, 1998) about  Unidigital to reach an informed and  knowledgeable  decision to
acquire the Unidigital Stock.

         2.27              Solvency.  The Seller  is not now insolvent, and will
                           --------
not be  rendered  insolvent  by any of the  transactions  contemplated  by  this
Agreement.  In addition,  immediately after giving effect to the consummation of
the transactions  contemplated by this Agreement, (i) the Seller will be able to
pay its debts as they become due,  (ii) the  property of the Seller does not and
will not  constitute  unreasonably  small  assets,  and the Seller will not have
unreasonably  small assets and will not have  insufficient  assets with which to
conduct its  present or proposed  business,  and (iii)  taking into  account all
pending and threatened litigation, final judgments against the Seller in actions
for money damages are not reasonably  anticipated to be rendered at a time when,
or in amounts such that, the Seller will be unable to satisfy any such judgments
promptly  in  accordance  with their  terms  (taking  into  account  the maximum
probable  amount  of  such  judgments  in any  such  actions  and  the  earliest
reasonable  time at which such judgments might be rendered) as well as all other
obligations of the Seller.  The cash available to the Seller,  after taking into
account all other anticipated uses of the cash of the Seller, will be sufficient
to pay all such judgments  promptly in accordance  with their terms.  As used in
this  Section  2.27,  (x)  "insolvent"  means that the sum of the  present  fair
saleable value of the Seller's  assets is less than the Seller's debts and other
probable  liabilities,  and (ii) the term "debts"  includes any legal liability,
whether matured or unmatured,  liquidated or  unliquidated,  absolute,  fixed or
contingent, disputed or undisputed or secured or unsecured.

         3.                Representations of the Buyer and Unidigital
                           -------------------------------------------

                  Representations   and   warranties   made  by  the  Buyer  and
Unidigital  herein or in any  instrument  or document  furnished  in  connection
herewith shall survive the Closing until (and  including) the third  anniversary
of the  Closing  Date.  The Buyer and  Unidigital  represent  and warrant to the
Seller as follows:

         3.1               Organization  and  Authority.  Each  of the Buyer and
                           ----------------------------
Unidigital is duly organized and validly existing and in good standing under the
laws of the state of Delaware,  and has requisite power and authority to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Buyer and Unidigital has full power to execute and deliver this  Agreement,  and
the  Instrument of Assumption and to consummate  the  transactions  contemplated
hereby and thereby.

                                      -24-
<PAGE>

         3.2               Authorization.  The  execution and  delivery  of this
                           -------------
Agreement by the Buyer and Unidigital and the agreements  provided for herein to
which each is a party,  and the  consummation by the Buyer and Unidigital of all
transactions  contemplated  hereby,  have been duly  authorized by all requisite
corporate  action.  This  Agreement  and all such other  agreements  and written
obligations  entered into and  undertaken  in connection  with the  transactions
contemplated   hereby  constitute  the  respective  valid  and  legally  binding
obligations of the Buyer and Unidigital,  enforceable against them in accordance
with their  respective  terms  except as such  enforceability  may be limited by
bankruptcy,  insolvency,  reorganization  or similar  laws  affecting  creditors
rights generally. The execution,  delivery and performance of this Agreement and
the  agreements  provided  for  herein,  and the  consummation  by the Buyer and
Unidigital of the transactions  contemplated hereby and thereby,  will not, with
or without the giving of notice or the passage of time or both,  (a) violate the
provisions of any law, rule or regulation applicable to the Buyer or Unidigital;
(b) violate  the  provisions  of the  organizational  documents  of the Buyer or
Unidigital;  (c)  violate  any  judgment,  decree,  order or award of any court,
governmental  body or arbitrator  applicable to the Buyer or Unidigital;  or (d)
except as set  forth in  Schedule  3.2  hereof,  conflict  with or result in the
breach or  termination  of any term or  provision  of, or  constitute  a default
under,  or cause any  acceleration  under,  or cause the  creation  of any lien,
charge or  encumbrance  upon the properties or assets of the Buyer or Unidigital
pursuant  to,  any  indenture,  mortgage,  deed of trust or other  agreement  or
instrument  to which it or its  properties  is a party or by which  the Buyer or
Unidigital is or may be bound.  Schedule 3.2 attached  hereto sets forth a true,
                                ------------
correct and complete  list of all consents and  approvals of third  parties that
are required of the Buyer and Unidigital in connection with the  consummation by
the Buyer and Unidigital of the transactions contemplated by this Agreement.

         3.3               Regulatory  Approvals.  All   consents,    approvals,
                           ---------------------
authorizations and other requirements  prescribed by any law, rule or regulation
which must be obtained or  satisfied by the Buyer and  Unidigital  and which are
necessary for its  consummation by the Buyer and Unidigital of the  transactions
contemplated by this Agreement have been obtained and satisfied.

         3.4               Brokers.  All negotiations relative to this Agreement
                           -------
and the transactions  contemplated  hereby have been carried on by the Buyer and
Unidigital  without the  intervention  of any other  person in such manner as to
give rise to any valid claim for a finder's fee,  brokerage  commission or other
like payment.

         3.5               No Material Change.  Since Unidigital's  Form 10Q for
                           ------------------
the quarter ended November 30, 1998, Unidigital has suffered no Material Adverse
Effect.

         3.6               No Violation.  Unidigital has received no notice that
                           ------------
it is in violation of any laws, rules or regulations relating to the 1993 Act or
the Securities Exchange Act of 1934.

                                      -25-
<PAGE>

         4.                Confidentiality; Public Announcements
                           -------------------------------------

         4.1               Confidentiality.  None   of   the   information   not
                           ---------------
previously  disclosed to the public or not generally known to persons engaged in
the  business of the Seller or the Buyer which shall have been  furnished by the
Buyer or the  Seller  to the other  party in  connection  with the  transactions
contemplated  hereby shall be disclosed  by such  receiving  party to any person
other than their  respective  employees,  directors,  attorneys,  accountants or
financial  advisors or other than as contemplated  herein. In the event that the
transactions  contemplated by this Agreement shall not be consummated,  all such
information  which shall be in writing shall be returned to the party furnishing
the  same,  including,  to the  extent  reasonably  practicable,  all  copies or
reproductions  thereof which may have been prepared,  and neither party shall at
any time thereafter  disclose to third parties,  or use, directly or indirectly,
for its own benefit,  any such information,  written or oral, about the business
of the other party hereto.

         4.2               Public Announcements.  Any public announcement, press
                           --------------------
release or similar  publicity with respect to this Agreement or the transactions
contemplated  hereby shall be issued, if at all, at such time and in such manner
as the Buyer determines. Unless consented to by the Buyer in advance or required
by applicable  law,  prior to the Closing,  the Selling  Parties shall keep this
Agreement strictly  confidential and may not make any disclosure related to this
Agreement to any person.  The Selling  Parties and the Buyer shall  consult with
each other  concerning  the means by which the  Seller's  Employees,  customers,
suppliers and others  having a business  relationship  with the Selling  Parties
will be informed of the transactions  contemplated  hereby,  and the Buyer shall
have the right to be  present  for any such  communication.  The  Seller  hereby
acknowledges  that this  Agreement  may be filed by  Unidigital as an exhibit to
certain registration  statements and/or reports filed by it pursuant to the 1933
Act or the Securities Exchange Act of 1934, as amended.

         5.                Employee Matters
                           ----------------

         5.1               Seller's Employees.  The Seller has  furnished to the
                           ------------------
Buyer a list  containing  the names of Seller's  Employees,  including each such
employee's status, social security number and current compensation.  The Selling
Parties hereby  acknowledge  that the Buyer and Unidigital have no current plans
to  offer  employment  to  all  of  the  Seller's   Employees  affected  by  the
transactions  contemplated  hereby.  The Buyer and/or  Unidigital may,  however,
offer  employment  to  some of the  Seller's  Employees  under  such  terms  and
conditions  as may be set by the Buyer or  Unidigital,  as the case may be.  The
Selling  Parties  agree and  acknowledge  that neither the Buyer nor  Unidigital
shall assume any collective  bargaining  agreement between the Seller and any of
the  Seller's  Employees,  notwithstanding  any  specific  terms to the contrary
contained in any such collective bargaining agreement.

         5.2               Future Changes. Except as otherwise set forth herein,
                           --------------
nothing in this  Section 5 shall  require  the Buyer to retain  any of  Seller's
Employees for any period of time after the date hereof.  Subject to requirements
of  applicable  law,  the Buyer  reserves  the right at any

                                      -26-
<PAGE>

time after the date hereof to terminate  such  employment  and amend,  modify or
terminate any term or condition of employment, including without limitation, any
employee benefit plan, program, policy, practice or arrangement.

         5.3               Plant  Closing.  None of  the  Selling  Parties  has,
                           --------------
directly or indirectly,  taken or omitted to take any action which may result in
the  Seller's or the Buyer's  liability  to any person or entity  under the WARN
Act.  The  term  "any  action"  does  not  include  the  sale  and   acquisition
contemplated  by this  Agreement and the  liability  under the WARN Act, if any,
which results from the Seller's termination of employees in connection with such
sale and acquisition is the sole responsibility of the Seller.

         5.4               Reporting  of Data.  The  Buyer and the Seller  shall
                           ------------------
compile and furnish to each other such  actuarial  and employee data as shall be
required from time to time for each party to perform and fulfill its obligations
under this Section 5.

         5.5               Pending  Litigation.  With respect to  any litigation
                           -------------------
pending, or to the knowledge of the Selling Parties threatened,  as set forth in
Schedule  2.21 hereto,  which claim alleges  violation of any  nondiscrimination
--------------
laws,  collective  bargaining  agreements,  employment  contract and termination
thereof or wage and hour laws,  the Seller  shall fully  defend such claim.  The
Seller shall be  responsible  for any  monetary  damages  awarded in  connection
therewith.  It is understood by the parties that if the Seller chooses to settle
any matter relating to any of the foregoing,  including the terms and conditions
thereof of any back pay claims,  such settlement shall be at the sole discretion
of the Seller  and the Seller  shall be solely  responsible  for the  payment or
performance of any such settlement terms.

         6.                Further Agreements of the Parties
                           ---------------------------------

         6.1               Access to  Information.  Prior to the Closing,  Buyer
                           ----------------------
may make such  investigation  of the  business and  properties  of the Seller as
Buyer may desire, and upon reasonable notice, Seller shall give to Buyer and its
counsel,  accountants and other representatives reasonable access, during normal
business  hours  throughout  the period prior to the Closing,  to the  property,
books, commitments,  agreements, records, files and personnel of the Seller, and
Seller shall  furnish to Buyer  during that period all copies of  documents  and
information  concerning the Business as Buyer may reasonably  request subject to
applicable law.

         6.2               Other Action.  Each of the parties shall use its best
                           ------------
efforts to cause the  fulfillment at the earliest  practicable  date but, in any
event,  prior to the Closing Date, of all of the conditions to their  respective
obligations to consummate the transactions under this Agreement.

         6.3               Expenses.  Except as otherwise specifically  provided
                           --------
in this  Agreement,  Buyer and Seller shall bear their own  respective  expenses
incurred  in  connection   with  this  Agreement  and  in  connection  with  all
obligations required to be performed by each of them under this Agreement.

                                      -27-
<PAGE>

         6.4               Transfer  Taxes.  Any   sales  taxes,  real  property
                           ---------------
transfer or gains taxes,  recording  fees or any other taxes payable as a result
of the sale of the Assets or any other  action  contemplated  by this  Agreement
shall be paid by the Seller.

         6.5               Insurance - Risk of Loss.  The Seller  will  maintain
                           ------------------------
adequate  insurance  on the Fixed  Assets  until they are  delivered  to a place
designated by the Buyer.  The risk of loss to the Fixed Assets shall remain with
Seller until delivery to Buyer.

         6.6               Arbitration. All claims, demands and disputes between
                           -----------
the  parties  to this  Agreement  shall be  arbitrated  by a  single  arbitrator
appointed by the  American  Arbitration  Association  ("AAA") from its roster of
individuals  who  have  at  least  ten  (10)  years  experience  in  arbitrating
commercial  matters,  unless  both  parties  agree on the  selection  of another
arbitrator  who agrees to serve.  The parties  shall share the fees and costs of
the arbitrator equally. The arbitration shall be conducted in Manhattan,  NY and
except  as  otherwise  provided  herein,  shall be  governed  by the  Rules  for
Commercial  Arbitration  issued by the AAA,  including those rules applicable to
the selection of arbitrators. The Arbitrator shall grant essential discovery and
shall  provide  for the  exchange  of  witness  lists and  exhibit  copies.  The
arbitrator  shall also  conduct a  pretrial  conference  and permit  dispositive
motions.  The arbitrator shall make findings of fact and shall state conclusions
of law  sufficient to explain and support its  disposition of the matters before
it. The arbitrator shall complete its proceedings and render its decision within
40 days after  submissions  of the dispute to it. The decision of the arbitrator
shall be final and  binding on the  parties  and may be entered as a judgment by
any court of competent jurisdiction.

         7.                Conditions to Obligations of the Buyer
                           --------------------------------------

                  The  obligations of the Buyer under this Agreement are subject
to the fulfillment,  at the Closing, of the following conditions precedent, each
of which may be waived in writing in the sole discretion of the Buyer:

         7.1               Continued Truth of Representations  and Warranties of
                           -----------------------------------------------------
the  Selling   Parties:   Compliance   with  Covenants  and   Obligations.   The
-------------------------------------------------------------------------
representations  and warranties of the Selling Parties shall be true and correct
in all  material  respects  at and as of the time of the  Closing  with the same
effect as though  made again at, and as of,  that  time.  The Seller  shall have
performed and complied in all material  respects with all covenants  required by
this Agreement to be performed or complied with by it prior to or at the time of
the Closing.

         7.2               Corporate and Shareholder Proceedings. All corporate,
                           -------------------------------------
shareholder and other proceedings required to be taken on the part of the Seller
to authorize or carry out this  Agreement  and to convey,  assign,  transfer and
deliver the Assets shall have been taken.

         7.3               Other  Governmental  Approvals.  All  courts  of law,
                           ------------------------------
governmental agencies, departments, bureaus, commissions and similar bodies, the
consent,  authorization  or approval of which is necessary  under any applicable
law,  rule,  order or  regulation  for the  consummation  by the  Seller  of the
transactions  contemplated  by this  Agreement and the operation of the Seller's

                                      -28-
<PAGE>

business  by the Buyer,  shall  have  consented  to,  authorized,  permitted  or
approved  such  transactions   including  but  not  limited  to,  all  clearance
certificates  required  pursuant to any applicable  retail sales tax legislation
required in  connection  with the  completion of the  transactions  contemplated
herein.

         7.4               Consents of Lenders, Lessors and Other Third Parties.
                           ----------------------------------------------------
The Seller  shall have  received  the  consents  and  approvals  of all lenders,
lessors and other third  parties  whose consent or approval is required in order
for the Seller to consummate the transactions contemplated by this Agreement.

         7.5               Adverse Proceedings.  No action  or proceeding  by or
                           -------------------
before any court or other  governmental  body shall have been  instituted by any
governmental body or person whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or which might affect
the right of the Buyer to own or use the Assets after the Closing.

         7.6               Opinion of Counsel.  The Buyer shall have received an
                           ------------------
opinion of Richard Feldman, Esq., counsel to the Seller, dated as of the Closing
Date,  substantially  in the form attached  hereto as Exhibit C (the "OPINION OF
                                                      ---------
SELLER'S COUNSEL").

         7.7               Board  of  Directors  and Shareholder  Approval.  The
                           -----------------------------------------------
directors  and  shareholder  of  the  Seller  shall  have  duly  authorized  the
transactions contemplated by this Agreement.

         7.8               Title to  Assets.  At  the  Closing  the  Buyer shall
                           ----------------
receive good and  marketable  title to all Assets,  free and clear of all liens,
mortgages,  pledges,  security  interests,   restrictions,   prior  assignments,
encumbrances and claims of any kind or nature whatsoever.

         7.9               Environmental  Reports;  Compliance  with   Laws. The
                           ------------------------------------------------
Buyer shall not have  received  unsatisfactory  environmental  reports  from its
environmental  consultants  and at any time prior to the Closing  shall not have
discovered that any Seller Real Property fails to comply in any material respect
with all applicable federal,  foreign, state or local environmental and wetlands
laws, rules and regulations.

         7.10              Fire,  Casualty  or  Eminent  Domain. If  any of  the
                           ------------------------------------
Assets  are,  prior to the  Closing,  either  damaged by fire or other  casualty
insured  against or taken,  in whole or in part, by eminent domain  proceedings,
then the Buyer shall have the right to accept  said  Assets in their  damaged or
diminished  condition  together  with an  assignment  to Buyer of all  insurance
and/or condemnation proceeds payable with respect to such fire, casualty or loss
or terminate this Agreement.

         7.11              Due Diligence Review.  The Buyer shall have completed
                           --------------------
a due  diligence  review  of the  Business,  the  results  of which  review  are
satisfactory to the Buyer in Buyer's sole discretion.

                                      -29-
<PAGE>

         7.12              Employment  Agreements. The  Shareholder  and  Kathy
                           ----------------------
Wright  shall  have  entered  into  an  Employment   Agreement  with  the  Buyer
substantially  in the form attached hereto as Exhibit D and D-1 (the "EMPLOYMENT
                                              -----------------
AGREEMENT"), which shall include, without limitation, confidentiality, invention
assignment, non-solicitation and non-competition provisions.

         7.13              Seller's Employees. Each of Seller's Employees listed
                           ------------------
on Schedule  7.13  attached  hereto has agreed to be employed by the Buyer as of
   --------------
the Closing  Date and has executed an  agreement  with the Buyer which  contains
invention  assignment,  non-competition  and  non-solicitation  provisions  (the
"SELLER'S EMPLOYEES AGREEMENTS".)

         7.14              Closing  Deliveries.  The Buyer shall  have  received
                           -------------------
at or prior to the Closing each of the following documents:

                  (a)  the Bill of Sale;

                  (b)  such  instruments of conveyance, assignment and transfer,
and motor vehicle transfers and safety inspection certificates,  if any, in form
and substance  satisfactory  to the Buyer,  as shall be  appropriate  to convey,
transfer and assign to, and to vest in, the Buyer,  good and marketable title to
the Assets other than the Intangible Property;

                  (c)  such  instruments of conveyance, assignment and  transfer
in form and substance  satisfactory  to the Buyer and in a form  appropriate  to
file,  if required,  with the United  States  Office of Patents and  Trademarks,
sufficient  to convey,  transfer and assign to, and to vest in, the Buyer,  good
and marketable title to the Intangible Property;

                  (d)  [Intentionally Omitted];

                  (e)  all technical  data, formulations, product literature and
other documentation relating to the Seller's business, all in form and substance
satisfactory to the Buyer;

                  (f)  such  contracts,  files  and  other  data  and  documents
pertaining to the Assets or the Business as the Buyer may reasonably request;

                  (g)  copies  of the  general  ledgers and  books of account of
the Seller related to the Business,  and all federal,  state,  local and foreign
income,  franchise,  capital, property and other tax returns filed by the Seller
with respect to the Assets since January 1, 1996.

                  (h)  such certificates of the Seller's officers and such other
documents evidencing  satisfaction of the conditions specified in this Section 7
as the Buyer shall reasonably request;

                  (i)  certificate  of the  Secretary of the Seller attesting to
the incumbency of the Seller's officers,  respectively,  and the authenticity of
the resolutions  authorizing the transactions  contemplated by the Agreement and
the organizational documents of the Seller;

                                      -30-
<PAGE>

                  (j)  the  Employment  Agreements, executed by the Shareholder;

                  (k)  the Seller's Employees  Agreements,  executed by each  of
the Seller's Employees listed on Schedule 7.13;
                                 -------------

                  (l)  the Opinion of Seller's Counsel;

                  (m)  the Amendment of the Certificate of Incorporation  of the
Seller to discontinue  the use of the name "Peter X(+C) Limited" and to file any
instruments as may be necessary with any governmental  authority to change their
corporate names and foreign qualifications; and

                  (n)  such other documents, instruments or certificates  as the
Buyer may  reasonably  request in order to evidence  the accuracy of the Selling
Parties' representations or compliance by Seller with its covenants hereunder.

         8.                Conditions to Obligations of the Seller
                           ---------------------------------------

                  The obligations of the Seller under this Agreement are subject
to the fulfillment,  at the Closing, of the following conditions precedent, each
of which may be waived in writing at the sole discretion of the Seller:

         8.1               Continued Truth of Representations  and Warranties of
                           -----------------------------------------------------
the Buyer  and  Unidigital;  Compliance  with  Covenants  and  Obligations.  The
--------------------------------------------------------------------------
representations  and  warranties of the Buyer and  Unidigital in this  Agreement
shall be true and correct in all material  respects at and as of the time of the
Closing with the same effect as though made again at, and as of, that time.  The
Buyer and  Unidigital  shall have  performed  and  complied  with all  covenants
required by this  Agreement  to be  performed  or complied  with by each of them
prior to the time of the Closing.

         8.2               Corporate and Shareholder Proceedings. All corporate,
                           -------------------------------------
shareholder, legal and other proceedings required to be taken on the part of the
Buyer and  Unidigital to authorize or carry out this  Agreement  shall have been
taken.

         8.3               Approvals.  All    other   governmental     agencies,
                           ---------
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is  necessary  under any  applicable  law,  rule,  order or
regulation for the  consummation by the Buyer and Unidigital of the transactions
contemplated by this Agreement shall have consented to, authorized, permitted or
approved such transactions.

         8.4               [Intentionally Omitted]

         8.5               Adverse  Proceedings. No  action  or proceeding by or
                           --------------------
before any court or other  governmental  body shall have  been instituted by any
governmental body or person  whatsoever  which shall seek to restrain,  prohibit
or invalidate the transactions  contemplated  by

                                      -31-
<PAGE>

this  Agreement  or which might  affect the right of the Seller to transfer  the
Assets or would affect the right of the Buyer to acquire the Assets.

         8.6               Closing  Deliveries.  The Seller shall have  received
                           -------------------
at or prior to the Closing each of the following documents:

                  (a)  such  certificates of the Buyer's officers and such other
documents evidencing  satisfaction of the conditions specified in this Section 8
as the Seller shall reasonably request;

                  (b)  a  certificate of the Secretary or Assistant Secretary of
the Buyer attesting to the incumbency of the Buyer's officers,  the authenticity
of the resolutions  authorizing the transactions  contemplated by this Agreement
and the organizational documents of the Buyer;

                  (c)  such certificates of Unidigital's officers and such other
documents evidencing  satisfaction of the conditions specified in this Section 8
as the Seller may reasonably request;

                  (d)  a certificate  of the Secretary or Assistant Secretary of
Unidigital  attesting  to the  incumbency  of  Unidigital's  officers,  and  the
authenticity of the resolutions  authorizing  the  transactions  contemplated by
this Agreement and the organizational documents of Unidigital;

                  (e)  the  Assumption  Agreement  executed  by  the  Buyer  and
accepted by the Seller;

                  (f)  the Unidigital Stock;

                  (g)  the Employment Agreements, executed  by the Buyer;

                  (h)  the Seller's Employees Agreements, executed by the Buyer;

                  (i)  such other documents, instruments or certificates as  the
Seller may reasonably request; and

                  (j)  the  opinion  of  Buyer's Counsel  in  the  form attached
hereto as Exhibit E.
          ---------

         9.                Post-Closing Agreements
                           -----------------------

         9.1               Proprietary Information.
                           -----------------------

                  (a)  The Seller shall  hold in  confidence,  and  use its best
efforts to have all  officers,  shareholder,  directors  and  personnel  hold in
confidence,  all knowledge and  information of a secret or  confidential  nature
with respect to the Business, and shall not disclose,

                                      -32-
<PAGE>

publish or make use of the same without the consent of the Buyer,  except to the
extent that such  information  shall have become public  knowledge other than by
breach of this  Agreement by the Seller or by any other  persons who have agreed
not to disclose, publish or make use of such information.

                  (b)  The Seller agrees that the remedy at law  for any  breach
of this Section 9.1 would be  inadequate  and that the Buyer  and/or  Unidigital
shall be entitled to  injunctive  relief in addition to any other  remedy it may
have upon breach of any provision of this Section 9.1.

                  (c)  The  foregoing  to   the  contrary  notwithstanding,   no
information,  written or oral,  shall be  construed or  considered  confidential
information and thereby subject to the  restrictions of this Section 9.1 if such
information was (i) generally  available to the public other than as a result of
a  disclosure  by the  Seller  or  anyone  to  whom  the  Seller  transmits  the
information in violation  hereof,  (ii) in the possession of the Seller or known
to the Seller on a non-confidential basis prior to its disclosure to the Seller,
(iii)  available to the Seller on a  non-confidential  basis from a source other
than the Buyer or  Unidigital  who is not bound by a  confidentiality  agreement
with the Buyer or  Unidigital,  as the case may be, or (iv)  available  in trade
publications,  reference  books or other  resources and which may be compiled by
any  person's  decisions  of preparing a report or  memorandum  containing  such
information.

         9.2               Solicitation or  Hiring of Former  Employees.  Except
                           --------------------------------------------
as  provided by law or with the  written  consent of the Buyer,  for a period of
three years after the date hereof,  the Seller and any persons or entities  that
are not  natural  persons,  that  directly  or  indirectly,  through one or more
intermediaries,  control,  are  controlled by, or are under common control with,
the Seller (the "CORPORATE AFFILIATES"),  shall not solicit any person who was a
Seller's Employee on the date hereof, and has been employed,  and not terminated
without cause,  by the Buyer,  to terminate his employment  with the Buyer or to
become an employee of the Seller or its Corporate  Affiliates or hire any person
who was such an employee on the date hereof.

         9.3               Non-Competition Agreement.
                           -------------------------

                  (a)  For  a period of five (5)  years  after the  date hereof,
neither the Shareholder,  the Seller nor any Corporate  Affiliate  thereof shall
directly or indirectly (i) manufacture, market or sell any product which has the
same or substantially the same function and primary  application as any existing
or proposed product manufactured,  marketed or sold by the Seller on or prior to
the date hereof or (ii) engage in, manage, operate, be connected with or acquire
any interest in, as an employee,  consultant,  advisor,  agent, owner,  partner,
co-venturer, principal, director, shareholder, lender or otherwise, any business
competitive  with  the  business  of the  Seller,  Unidigital  or the  Buyer  as
conducted on the date hereof (a "COMPETITIVE BUSINESS"), in the United States or
any  other  country  in which the  Seller,  Unidigital  or the  Buyer  conducted
business  during  the two  years  prior  to the  date  hereof,  except  that the
Shareholder,  the Seller and its Corporate Affiliates may own, in the aggregate,
not more than 1% of the  outstanding  shares of any  publicly  held  corporation
which is a Competitive Business which has shares listed for trading

                                      -33-
<PAGE>

on a securities  exchange registered with the Securities and Exchange Commission
or  through  the  automatic   quotation   system  of  a  registered   securities
association.

                  (b)  The parties hereto agree that the duration and geographic
scope  of the  non-competition  provision  set  forth  in this  Section  9.3 are
reasonable.  In the event that any court  determines  that the  duration  or the
geographic  scope, or both, are  unreasonable and that such provision is to that
extent  unenforceable,  the parties hereto agree that the provision shall remain
in full force and effect for the greatest  time period and in the greatest  area
that  would  not  render  it   unenforceable.   The  parties  intend  that  this
non-competition  provision shall be deemed to be a series of separate covenants,
one for each and every  county of each and every  state of the United  States of
America  and each and every  political  subdivision  of each and  every  country
outside  the United  States of America  where this  provision  is intended to be
effective.  The Seller  agrees  that  damages are an  inadequate  remedy for any
breach of this provision and that the Buyer shall, whether or not it is pursuing
any  potential  remedies at law, be entitled to equitable  relief in the form of
preliminary  and permanent  injunctions  without bond or other security upon any
actual or threatened breach of this non-competition  provision. If the Seller or
any  Corporate  Affiliate  shall  violate this Section 9.3, the duration of this
Section 9.3 automatically  shall be extended as against such violating party for
a period  equal to the  period  during  which  such  party  shall  have  been in
violation of this Section 9.3. The  covenants  contained in this Section 9.3 are
deemed to be material and the Buyer is entering into this  Agreement  relying on
such covenants.

                  (c)  The parties  hereto  agree that if, during the first five
years after the date  hereof the Buyer is in  material  default in respect of an
obligation to the Selling  Parties which  default  continues  after notice and a
reasonable  opportunity  to cure the Selling  Parties  shall not be bound by the
provisions  of this Section 9.3 only as it applies to customers of the Buyer for
whom Seller would receive credit towards an Earnout Payment.

         9.4               Sharing of Data.  The Seller shall have the right for
                           ---------------
a period of seven years following the date hereof to have  reasonable  access to
such books,  records and  accounts,  including  financial  and tax  information,
correspondence,   production  records,  employment  records  and  other  similar
information  as are  transferred  to the  Buyer  pursuant  to the  terms of this
Agreement for the limited purposes of concluding its involvement in the business
of the Seller prior to the date hereof and for  complying  with its  obligations
under applicable securities,  tax,  environmental,  employment or other laws and
regulations.  The Buyer and/or  Unidigital  shall have the right for a period of
seven years following the date hereof to have reasonable  access to those books,
records and accounts,  including financial and tax information,  correspondence,
production  records,  employment records and other records which are retained by
the Seller pursuant to the terms of this Agreement to the extent that any of the
foregoing  relates to the  Business  transferred  to the Buyer  hereunder  or is
otherwise  needed by the Buyer  and/or  Unidigital  in order to comply  with its
obligations under applicable securities, tax, environmental, employment or other
laws and regulations.

         9.5               Cooperation in  Litigation.  Each  party  hereto will
                           --------------------------
fully  cooperate  with the other in the defense or prosecution of any litigation
or proceeding already instituted or which may

                                      -34-
<PAGE>

be instituted  hereafter  against or by such party relating to or arising out of
the  conduct  of the  Business  prior to or after the date  hereof  (other  than
litigation  arising out of the  transactions  contemplated by this Agreement and
except as  otherwise  expressly  provided  herein).  The party  requesting  such
cooperation  shall pay the  out-of-pocket  expenses  (including  legal  fees and
disbursements)  of the party  providing  such  cooperation  and of its officers,
directors, employees and agents reasonably incurred in connection with providing
such cooperation,  but shall not be responsible to reimburse the party providing
such cooperation for such party's time spent in such cooperation or the salaries
or costs of fringe benefits or similar expenses paid by the party providing such
cooperation to its officers, directors,  employees and agents while assisting in
the defense or prosecution of any such litigation or proceeding.

         9.6               Customer   and   Other  Business  Relationships.  The
                           -----------------------------------------------
Selling  Parties  will  cooperate  with the Buyer in its efforts to continue and
maintain,  with lessors,  licensors,  customers,  suppliers  and other  business
associates of any of the Selling Parties,  the same business  relationships with
the Buyer after the Closing as  maintained  with such  Selling  Party before the
Closing,  with respect to the  business to be carried on by the Buyer  utilizing
the Assets.  The Selling Parties will refer to the Buyer all inquiries  relating
to the Business from customers and all such other persons.  The Selling  Parties
will not take any action designed or intended to have the effect of discouraging
any customer or such other person from  continuing or maintaining  the same such
business with the Buyer after the Closing.  The Selling  Parties shall use their
best  efforts to satisfy any  liability or  obligation  not assumed by the Buyer
hereunder in a manner which is not detrimental to the Buyer's relationships with
suppliers and vendors.

         9.7               Subrogation.  If  the  Buyer  or  Unidigital  becomes
                           -----------
liable for or suffers any damage with  respect to any matter that was covered by
insurance  maintained by the Selling Parties at or before the Closing, the Buyer
and  Unidigital,  as the case may be, shall be and hereby are  subrogated to any
rights of the Selling Parties under such insurance coverage. The Selling Parties
shall  promptly  remit to the  Buyer  or  Unidigital,  as the  case may be,  any
insurance  proceeds any of them may receive on account of any such  liability or
damage.

         10.               Indemnification and Reimbursement
                           ---------------------------------

         10.1              Indemnification.
                           ---------------

                  (a)  The  Selling Parties  shall  indemnify,  defend  and hold
harmless  the Buyer and any  parent,  subsidiary  or  affiliate  thereof and all
directors,  officers, employees, agents and consultants of each of the foregoing
(collectively,  the "BUYER GROUP") from and against all demands, claims, actions
or  causes  of  action,  assessments,   losses,  damages,  liabilities  (whether
absolute, accrued, contingent or otherwise),  costs and expenses,  including but
not  limited  to,   interest,   penalties  and  attorneys'   fees  and  expenses
(collectively,  "DAMAGES"),  asserted  against,  imposed upon or incurred by the
Buyer  Group or any member  thereof,  directly  or  indirectly,  by reason of or
resulting from or relating to any of the following  (but in any event  excluding
the Assumed Liabilities):

                                      -35-
<PAGE>

                    (i)     liability  and obligation  of either of the  Selling
Parties;

                    (ii)    misrepresentation or breach of warranty or  covenant
or  agreement  by  either  of the  Selling  Parties  made or  contained  in this
Agreement or in any certificate, document, writing or instrument furnished or to
be furnished to the Buyer under this Agreement;

                    (iii)   failure  to  comply  with  any bulk sales or similar

laws applicable to the transactions contemplated hereby; and

                    (iv)    litigation or other claim  of any nature  whatsoever
arising from acts, failures to act or events which occurred prior to the time of
the Closing including,  without limitation, (A) Environmental Conditions and (B)
claims for product  failure or defect  (including  but not limited to claims for
personal  injury,  property  damages and breach of warranty) which relate to any
product manufactured or sold prior to the date hereof.

                  (b)  The Buyer and Unidigital shall indemnify, defend and hold
harmless  the Seller and any parent,  subsidiary  or  affiliate  thereof and all
directors,   officers,  employees,  agents  and  consultants  of  the  foregoing
(collectively,  the  "SELLER  GROUP")  from and  against  all  Damages  asserted
against,  imposed  upon or incurred by the Seller  Group or any member  thereof,
directly  or  indirectly,  by reason of or  resulting  from or  relating  to the
Assumed Liabilities.

         10.2              CERCLA.  Nothing  contained in this  Agreement  shall
                           ------
be deemed a waiver of the right of the Buyer to  maintain  a private  party cost
recovery action under the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq.
                                      ------

         10.3              Notice  and  Defense  of Claims. The Selling Parties'
                           -------------------------------
obligations and liabilities  hereunder with respect to claims resulting from the
assertion  of liability  by the Buyer or third  parties  shall be subject to the
following terms and conditions:

                  (a)  Notice.  The  party  seeking   indemnification  hereunder
(each,  an  "INDEMNIFIED  PARTY") shall give prompt  written notice to the party
from whom indemnification is being sought (each, an "INDEMNIFYING PARTY") of any
claim  or  event  known  to it  which  does or may  give  rise to a claim by the
Indemnified Party against the Indemnifying Party for which the Indemnified Party
believes it is entitled to  indemnification  pursuant to this Section 10 of this
Agreement, stating the nature and basis of said claims or events and the amounts
thereof,  to the extent  known,  and in the case of any claim,  action,  suit or
proceeding  brought by any third  party,  a copy of any claim,  process or legal
pleadings with respect thereto promptly after any such documents are received by
the Indemnified  Party. Such notice shall be given in accordance with Section 12
hereof.

                                      -36-
<PAGE>

                  (b)  Third Party Claims or Actions.
                       -----------------------------

                    (i)     In the event any claim, action, suit or   proceeding
is made or  brought by any third  party  against  the  Indemnified  Party,  with
respect to which the  Indemnifying  Party may have  liability  for Damages under
this Section 10 of this  Agreement,  the  Indemnifying  Party shall,  at its own
expense,  be entitled to  participate  in and, to the extent that it shall wish,
jointly  and with any other  indemnifying  party,  to assume the  defense,  with
independent counsel reasonably  satisfactory to the Indemnified Party,  provided
that in  assuming  the defense of any such third party  claim,  action,  suit or
proceeding,  the Indemnifying  Party  acknowledges in writing to the Indemnified
Party that the Indemnifying Party shall thereafter be liable for any Damage with
respect to such claim, action, suit or proceeding.

                    (ii)    If the Indemnifying  Party elects to assume  control
of such defense or settlement,  they shall conduct such defense or settlement in
a manner reasonably  satisfactory and effective to protect the Indemnified Party
fully;  the Indemnifying  Party and its counsel will keep the Indemnified  Party
fully advised as to its conduct of such defense or settlement, and no compromise
or  settlement  shall be agreed  or made  without  the  written  consent  of the
Indemnified  Party. In any case, the  Indemnified  Party shall have the right to
employ its own counsel and such counsel may participate in such action,  but the
reasonable  fees and  expenses  of such  counsel  shall be at the expense of the
Indemnified Party, when and as incurred, unless (A) the employment of counsel by
the Indemnified Party has been authorized in writing by the Indemnifying  Party,
(B) the Indemnified  Party shall have  reasonably  concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified Party in
the conduct of the defense of such action,  (C) the Indemnifying Party shall not
in  fact  have  employed  independent  counsel  reasonably  satisfactory  to the
Indemnified  Party to assume the  defense of such  action and shall have been so
notified  by the  Indemnified  Party,  (D)  the  Indemnified  Party  shall  have
reasonably  concluded and specifically  notified the  Indemnifying  Party either
that there may be specific defenses  available to it which are different from or
additional  to  those  available  to it or  that  such  claim,  action,  suit or
proceeding  involves or could have a material  adverse effect upon it beyond the
financial resources of the Indemnifying Party or the scope of this Agreement, or
(E) the  Indemnifying  Party fails to conduct  such defense or  settlement  in a
manner reasonably satisfactory to protect the Indemnified Party fully. If clause
(B), (C), (D) or (E) of the preceding sentence shall be applicable, then counsel
for the  Indemnified  Party  shall have the right to direct the  defense of such
claim,  action,  suit or proceeding on behalf of the  Indemnified  Party and the
reasonable  fees and  disbursements  of such counsel  shall  constitute  Damages
hereunder.

                    (iii)  If the  Indemnifying  Party does not elect to  assume
the  defense  of any such  claim,  or if they fail to  conduct  said  defense or
settlement in a manner reasonably  satisfactory to protect the Indemnified Party
fully,  the Indemnified  Party may engage  independent  counsel  selected by the
Indemnified  Party to  assume  the  defense  and may  contest,  pay,  settle  or
compromise any such claim on such terms and conditions as the Indemnified  Party
may  determine.  The  reasonable  fees and  disbursements  of such counsel shall
constitute Damages hereunder.

                                      -37-
<PAGE>

                    (iv)   The Indemnified Party  and  the Indemnifying   Party,
as the case may be, shall be kept fully informed of such claim,  action, suit or
proceeding at all stages thereof whether or not such party is represented by its
own counsel.

         10.4              Cooperation. The  parties hereto  agree  to render to
                           -----------
each other such  assistance as they may reasonably  require of each other and to
cooperate  in good  faith  with each  other in order to ensure  the  proper  and
adequate defense of any claim,  action,  suit or proceeding brought by any third
party.  Where  counsel  has been  selected by the  Indemnifying  Party or by the
Indemnified  Party  pursuant  to Section  10.3,  the  Indemnifying  Party or the
Indemnified Party, as the case may be, shall be entitled to rely upon the advice
of such counsel in the conduct of the defense.

         10.5              Confidentiality.  The  parties agree  to cooperate in
                           ---------------
such a manner as to preserve  in full the  confidentiality  of all  confidential
business  records  and  the  attorney-client  and  work-product  privileges.  In
connection  therewith,  each party agrees that (a) it will use its best efforts,
in any action, suit or proceeding in which it has assumed or participated in the
defense,  to avoid  production  of  confidential  business  records  and (b) all
communications   between  any  party  hereto  and  counsel  responsible  for  or
participating  in the defense of any action,  suit or proceeding  shall,  to the
extent  possible,  be made so as to preserve any applicable  attorney-client  or
work-product privilege.

         10.6              Right of Offset.  The  Buyer  may  offset any and all
                           ---------------
Damages owed by the Selling  Parties to the Buyer Group pursuant to this Section
10 against  any Cash  Consideration,  Accounts  Receivable  Proceeds  or Earnout
Payment  due to Seller  hereunder.  Neither  the  exercise of nor the failure to
exercise  such right or to give  notice of a claim  under the  Escrow  Agreement
shall constitute an election of remedies or limit the Buyer in any manner in the
enforcement  of any other legal or equitable  remedies  that may be available to
the Buyer. Unless the parties can agree as to the amount of a reserve to be held
from those sums due Sellers hereunder, pending the resolution of an unliquidated
claim against Buyer for which Seller is entitled to  indemnification  hereunder,
the amount of such reserve shall be arbitrated pursuant to Paragraph 6.6 hereof.

         11.               Notices. Any notices or other communications required
                           -------
or permitted  hereunder  shall be  sufficiently  given if in writing  (including
telecommunications)  and  delivered  personally  or  sent by fax or  other  wire
transmission  (with  request for  assurance in a manner  typical with respect to
communications  of that type),  federal  express or other  overnight air courier
(postage  prepaid),  registered or certified  mail (postage  prepaid with return
receipt  requested),  addressed as follows or to such other address of which the
parties may have given notice:

         To the Seller:                     Peter X(+C) Limited
                                            130 Beekman Street
                                            New York, NY 10038
                                            Attn:  Peter Ksiezopolski
                                            Tel. No.: (917) 749-7812
                                            Fax No.:  (___) ___-_____

                                      -38-
<PAGE>

         With a copy to:                    Feldman Grodeck
                                            3 ADP Boulevard
                                            Roseland, NJ 07068
                                            Attn:  Richard A. Feldman, Esq.
                                            Tel. No.: (973) 535-0900
                                            Fax No.:  (973) 535-9070

         To the Buyer or Unidigital:        Unidigital Inc.
                                            229 West 28th Street
                                            New York, New York  10001
                                            Attn:  Mr. William Dye,
                                                   Chief Executive Officer
                                            Tel. No.: (212) 244-7820
                                            Fax No.:  (212) 244-7815

         With a copy to:                    Buchanan Ingersoll Professional
                                            Corporation
                                            500 College Road East
                                            Princeton, New Jersey  08540
                                            Attn:  David J. Sorin, Esq.
                                            Tel. No.: (609) 987-6800
                                            Fax No.:  (609) 520-0360

Unless otherwise specified herein, such notices or other communications shall be
deemed  received (a) on the date delivered,  if delivered  personally or by wire
transmission;  (b) on the next  business  day after  mailing or deposit  with an
overnight  air courier;  or (c) five  business days after being sent, if sent by
registered or certified mail.

         12.               Successors  and  Assigns.  This  Agreement  shall  be
                           ------------------------
binding upon and inure to the benefit of the parties hereto and their respective
heirs successors and assigns. Neither the Seller nor the Buyer may assign all or
a portion of its rights and  obligations  hereunder  without  the prior  written
consent of the other party, except that the Buyer may assign all or a portion of
its rights and obligations hereunder to an Affiliate of the Buyer, provided that
the Buyer shall remain  liable for the  performance  of the Buyer's  obligations
under this Agreement. Any assignment in contravention of this provision shall be
void.

         13.               Entire Agreement; Amendments; Attachments.
                           -----------------------------------------

                  (a)  This  Agreement, all  Schedules and exhibits  hereto, and
all agreements and  instruments to be delivered by the parties  pursuant  hereto
represent the entire understanding and agreement between the parties hereto with
respect to the subject  matter  hereof and  supersede all prior oral and written
and  all  contemporaneous  oral  negotiations,  commitments  and  understandings
between such  parties  except as expressly  provided  herein.  The Buyer and the
Seller,  by the consent of their  respective  Boards of  Directors,  or officers
authorized by such

                                      -39-
<PAGE>

Boards,  may amend or modify  this  Agreement,  in such  manner as may be agreed
upon, by a written instrument executed by the Buyer and the Seller.

                  (b)  If the provisions of any   schedule  or exhibit  to  this
Agreement are inconsistent with the provisions of this Agreement, the provisions
of the Agreement shall prevail. The exhibits and schedules attached hereto or to
be  attached  hereafter  are  hereby  incorporated  as  integral  parts  of this
Agreement.

         14.               Expenses.  Except  as  otherwise  expressly  provided
                           --------
herein, the Buyer and the Seller shall each pay their own expenses in connection
with this Agreement and the transactions contemplated hereby.

         15.               Governing Law. This  Agreement shall  be governed  by
                           -------------
and  construed  in  accordance  with the laws of the State of New York,  without
reference to conflicts of laws rules or principles.

         16.               Section  Headings.  The section  headings are for the
                           -----------------
convenience  of the  parties  and in no way  alter,  modify,  amend,  limit,  or
restrict the contractual obligations of the parties.

         17.               Severability.  The invalidity or  unenforceability of
                           ------------
any provision of this Agreement shall not affect the validity or  enforceability
of any other provision of this Agreement.

         18.               Counterparts.  This  Agreement  may  be  executed  in
                           ------------
one or more counterparts,  each of which shall be deemed to be an original,  but
all of which shall be one and the same document.

         19.               Currency.  Unless  otherwise  indicated,  all  dollar
                           --------
amounts referred to in this Agreement are in United States funds.

         20.               Waiver.  The  rights and  remedies of  the parties to
                           ------
this Agreement are cumulative and not  alternative.  Neither the failure nor any
delay by any party in  exercising  any right,  power,  or  privilege  under this
Agreement  or the  documents  referred to in this  Agreement  will  operate as a
waiver of such right, power, or privilege,  and no single or partial exercise of
any such right,  power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege.  To the maximum extent  permitted by applicable  law, (a) no claim or
right  arising  out of  this  Agreement  or the  documents  referred  to in this
Agreement can be  discharged  by one party,  in whole or in part, by a waiver or
renunciation  of the claim or right unless in writing signed by the other party,
(b) no  waiver  that may be given by a party  will be  applicable  except in the
specific  instance for which it is given,  and (c) no notice to or demand on one
party  will be deemed to be a waiver of any  obligation  of such party or of the
right of the party giving such notice or demand to take further  action  without
notice or demand as provided in this  Agreement or the documents  referred to in
this Agreement.

                                      -40-
<PAGE>

         21.               Ambiguity  in  Drafting.  Each party  shall have been
                           -----------------------
deemed to have  participated  equally in the drafting of this  Agreement and the
agreements contemplated hereby and any ambiguity in any such contracts shall not
be construed against any purported author thereof.


                            [SIGNATURE PAGE FOLLOWS]
















                                      -41-
<PAGE>

     IN WITNESS  WHEREOF,  this  Agreement has been duly executed by the parties
hereto as of and on the date first above written.

(Corporate Seal)                            SELLER:

ATTEST:                                     PETER X(+C) LIMITED



/s/Kathy Wright                             By:/s/Peter X. Ksiezopolski
-----------------------------                  ---------------------------------
Assistant Secretary                            Name:  Peter X. Ksiezopolski
                                               Title: President



                                            SHAREHOLDER:

                                            /s/Peter X. Ksiezopolski
                                            --------------------------------
                                            Peter X. Ksiezopolski


(Corporate Seal)                            BUYER:

ATTEST:                                     UNISON (NY), INC.



/s/Peter Saad                               By:/s/William E. Dye
-----------------------------                  ------------------------------
Secretary                                      Name:   William E. Dye
                                               Title:  Chairman of the Board

(Corporate Seal)

ATTEST:                                     UNIDIGITAL INC.



/s/Peter Saad                               By:/s/William E. Dye
-----------------------------                  ------------------------------
Assistant Secretary                            Name:   William E. Dye
                                               Title:  Chief Executive Officer

                                      -42-