-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WbNYpvJHV7blbjuBMPzrAY+zUJYflJWldHBilS+3anuNeBbFwQfp3pMB0S5Li8t7 PnOhsRQ7QrF9SBXWO4qZQQ== 0000950115-97-000900.txt : 19970610 0000950115-97-000900.hdr.sgml : 19970610 ACCESSION NUMBER: 0000950115-97-000900 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970522 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970606 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIDIGITAL INC CENTRAL INDEX KEY: 0001003934 STANDARD INDUSTRIAL CLASSIFICATION: SERVICE INDUSTRIES FOR THE PRINTING TRADE [2790] IRS NUMBER: 133866725 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27664 FILM NUMBER: 97619949 BUSINESS ADDRESS: STREET 1: 20 WEST 20TH ST CITY: NEW YORK STATE: NY ZIP: 10011 BUSINESS PHONE: 2123370330 MAIL ADDRESS: STREET 1: 20 WEST 20TH ST CITY: NEW YORK STATE: NY ZIP: 10011 8-K 1 CURRENT REPORT CONFORMED COPY SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) May 22, 1997 Unidigital Inc. --------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-27664 13-3856672 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 20 West 20th Street, New York, New York 10011 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (zip code) (212) 337-0330 ---------------------------------------------- (Registrant's telephone number, including area code) ----------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 2. Acquisition or Disposition of Assets. On May 22, 1997, Unidigital Inc. (the "Company"), through its wholly-owned subsidiary, Elements (UK) Limited ("Elements"), consummated the acquisition of Libra City Corporate Printing Limited, a London-based financial printer (the "Seller"). The Seller provides printing services to the London financial community. The Company intends to continue such line of business. The Company, through Elements, acquired all of the issued and outstanding capital stock of the Seller and its subsidiaries. The purchase price included cash payments of (pound)1,823,750 (approximately $2,972,700) and a potential earn-out payment of up to (pound)500,000 (approximately $815,000) payable by March 31, 1998. In determining the purchase price, the Company considered, among other factors, (i) the composition of the Seller's assets, in particular, its cash position and the strength of the Seller's balance sheet; (ii) the business, operations and prospects of the Seller; (iii) the financial statements and other relevant financial and operating data of the Seller; (iv) the historical and projected financial information prepared by the management of the Seller; and (v) the past and projected revenues generated from the customers of the Seller. The Company funded the purchase price from the proceeds of five-year loans in the aggregate principal amount of $2,600,000 and a line of credit of up to $400,000 from Lloyds of London. The lenders under the $2,600,000 loans have a put option after one year. In connection with such loans, the Company granted five-year warrants to the lenders to purchase up to an aggregate amount of 260,000 shares of the Company's Common Stock at an exercise price of $4.00 per share. In addition, the Company granted "piggyback" registration rights, subject to certain limitations, to such lenders. Included among the lenders, were David Wachsman and Harvey Silverman, directors of the Company. Such directors loaned an aggregate of $300,000 to the Company and received warrants to purchase an aggregate of 30,000 shares of the Company's Common Stock. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Information of Business Acquired. To be filed by amendment. The Company believes that it is impracticable to provide such financial information as of the date hereof. Such information shall be filed with the Commission no later than August 5, 1997. (b) Pro Forma Financial Information (unaudited). To be filed by amendment. The Company believes that it is impracticable to provide such financial information as of the date hereof. Such information shall be filed with the Commission no later than August 5, 1997. (c) Exhibits. Exhibit No. Description of Exhibit ----------- ---------------------- 4.1 Form of Promissory Note dated May 21, 1997, together with Schedule of Holders. 4.2 Form of Warrant dated May 21, 1997, together with Schedule of Holders. 4.3 Form of Registration Rights Agreement dated May 21, 1997, together with Schedule of Holders. 10.1 Share Purchase Agreement by Way of Deed dated May 22, 1997 by and among Unidigital Inc., Elements (UK) Limited, Libra City Corporate Printing Limited, Francis Allen, Robin Bishop, Kenneth Dellow, Edward Tylee, Invesco English and International Trust, and Baronsmead Investment Trust. -3- SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. Unidigital Inc. By: /s/ William E. Dye -------------------------------- William E. Dye, President and Chief Executive Officer (Principal Executive Officer) By: /s/ Michael Brown -------------------------------- Michael Brown, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) Date: June 6, 1997 EX-4.1 2 PROMISSORY NOTE EXHIBIT 4.1 PROMISSORY NOTE $_____________ May 21, 1997 FOR VALUE RECEIVED, the undersigned, Unidigital Inc., a Delaware corporation (the "Obligor"), hereby promises to pay to the order of _________ (the "Holder"), the principal sum of __________ Dollars ($_________) payable as set forth below. The Obligor also promises to pay to the order of the Holder interest on the principal amount hereof at a rate per annum equal to (i) ten percent (10%) for the six-month period commencing on the date hereof; (ii) eleven percent (11%) for the six-month period commencing on the day immediately following the six-month anniversary of the date hereof; and (iii) twelve percent (12%) commencing on the day immediately following the first anniversary of the date hereof, which interest shall be payable at such time as the principal is due hereunder. Interest shall be calculated on the basis of a year of 365 days and for the number of days actually elapsed. Any amounts of interest and principal not paid when due shall bear interest at the maximum rate of interest allowed by applicable law. The payments of principal and interest hereunder shall be made in coin or currency of the United States of America which at the time of payment shall be legal tender therein for the payment of public and private debts. This Note shall be subject to the following additional terms and conditions: 1. Payments.Principal shall be payable on the earlier of (i) May 22, 2002 or (ii) the date on which the Obligor consummates an underwritten public offering in an amount sufficient to pay all amounts due and owing to the Holder under this Note. In the event that any payment to be made hereunder shall be or become due on a Saturday, Sunday or any other day which is a legal bank holiday under the laws of the State of New York, such payment shall be or become due on the next succeeding business day. 2. Prepayment. The Obligor shall have the right at any time to prepay the principal hereof in whole or in part, without premium or penalty, provided that interest on the principal hereof to be so prepaid, accrued to the date of such prepayment, shall be paid concurrently therewith. 3. Put Option. At any time after the first anniversary of the date hereof, the Holder shall have the right and option (but not the obligation) to require that the Obligor repay the principal hereof in whole, together with all interest accrued thereon, without premium or penalty (the "Put Option"). In the event that the Holder exercises the Put Option, the Obligor shall pay all amounts due and owing to the Holder under this Note within thirty (30) days of receipt of notice that the Holder has exercised the Put Option. 4. No Waiver. No failure or delay by the Holder in exercising any right, power or privilege under this Note shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. No course of dealing between the Obligor and the Holder shall operate as a waiver of any rights by the Holder. 5. Waiver of Presentment and Notice of Dishonor. The Obligor and all endorsers, guarantors and other parties that may be liable under this Note hereby waive presentment, notice of dishonor, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this Note. 6. Place of Payment. All payments of principal of this Note and the interest due thereon shall be made at ______________________ or at such other place as the Holder may from time to time designate in writing. 7. Events of Default. The entire unpaid principal amount of this Note and the interest due thereon shall, at the option of the Holder exercised by written notice to the Obligor, forthwith become and be due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, if any one or more of the following events (herein called "Events of Default") shall have occurred (for any reason whatsoever and whether such happening shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) and be continuing at the time of such notice, that is to say: a) if default shall be made in the due and punctual payment of the principal of this Note and the interest due thereon when and as the same shall become due and payable, whether at maturity, or by acceleration or otherwise, and such default shall have continued for a period of five days; b) if the Obligor shall: (i) admit in writing its inability to pay its debts generally as they become due; (ii) file a petition in bankruptcy or a petition to take advantage of any insolvency act; (iii) make an assignment for the benefit of creditors; (iv) consent to the appointment of a receiver of the whole or any substantial part of his property; (v) on a petition in bankruptcy filed against him, be adjudicated a bankrupt; or (vi) file a petition or answer seeking reorganization or arrangement under the Federal bankruptcy laws or -2- any other applicable law or statute of the United States of America or any State, district or territory thereof; (c) if a court of competent jurisdiction shall enter an order, judgment, or decree appointing, without the consent of the Obligor, a receiver of the whole or any substantial part of Obligor's property, and such order, judgment or decree shall not be vacated or set aside or stayed within 90 days from the date of entry thereof; and (d) if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the whole or any substantial part of Obligor's property and such custody or control shall not be terminated or stayed within 90 days from the date of assumption of such custody or control. 8. Remedies. In case any one or more of the Events of Default specified in Section 7 hereof shall have occurred and be continuing, the Holder may proceed to protect and enforce its rights either by suit in equity and/or by action at law, whether for the specific performance of any covenant or agreement contained in this Note or in aid of the exercise of any power granted in this Note, or the Holder may proceed to enforce the payment of all sums due upon this Note or to enforce any other legal or equitable right of the Holder. 9. Severability. In the event that one or more of the provisions of this Note shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 10. Governing Law. This Note and the rights and obligations of the Obligor and the Holder shall be governed by and construed in accordance with the laws of the State of New York. 11. Unsecured Obligations. The Holder hereby acknowledges that the obligations of the Obligor hereunder are unsecured. IN WITNESS WHEREOF, the undersigned has caused this Note to be executed and delivered on the date first written above. UNIDIGITAL INC. By: ---------------------- William E. Dye President -3- SCHEDULE OF HOLDERS ------------------- Principal Number of Holder Amount of Note Warrants ------ -------------- -------- Lawrence & Company Inc. $1,000,000 100,000 Trans Euro Investments Ltd. 500,000 50,000 Alcamin Anstalt Vaduz 300,000 30,000 I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000 Henry Harris 200,000 20,000 David Wachsman 150,000 15,000 Harvey Silverman 150,000 15,000 Douglas Schwarzwaelder 100,000 10,000 ---------- ------- TOTAL: $2,600,000 260,000 ========== ======= EX-4.2 3 WARRANT TO PURCHASE EXHIBIT 4.2 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER. WARRANT TO PURCHASE SHARES OF COMMON STOCK OF UNIDIGITAL INC. Warrant Certificate Number: W 00 Dated: 5/21/97 ------ ------- This certifies that ________________ (the "Holder"), for value received is entitled, subject to the terms set forth below, to purchase from UNIDIGITAL INC., a Delaware corporation (the "Company"), ____ fully paid and nonassessable shares of the Company's Common Stock, par value $0.01 per share (the "Stock") at a price of $4.00 per share (the "Stock Purchase Price") at any time or from time to time but not earlier than the Commencement Date (as defined below) or later than 5:00 p.m. (New York Time) on the Expiration Date (as defined below), upon surrender to the Company at its principal office at 20 West 20th Street, New York, New York 10011, Attention: President (or at such other location as the Company may advise Holder in writing) of this Warrant properly endorsed with the form of Subscription Agreement attached hereto duly completed and signed and, unless the Conversion Right (as defined below) set forth in Section 1(c) is exercised, upon payment in cash or cashier's check of the aggregate Stock Purchase Price for the number of shares for which this Warrant is being exercised determined in accordance with the provisions hereof. The Stock Purchase Price and the number of shares purchasable hereunder are subject to adjustment as provided in Section 3 of this Warrant. This Warrant and all rights hereunder, to the extent not exercised in the manner set forth herein shall terminate and become null and void on the Expiration Date (as defined below). "Commencement Date" shall mean the date of this Warrant. "Expiration Date" shall mean the fifth anniversary of the Commencement Date. This Warrant is subject to the following terms and conditions: 1. Exercise; Issuance of Certificates; Payment for Shares; Conversion Right. (a) This Warrant is exercisable in the manner set forth above at the option of Holder at any time or from time to time but not earlier than the Commencement Date or later than 5:00 p.m. (New York Time) on the Expiration Date for all or a portion of the shares of Stock which may be purchased hereunder. The Company agrees that the shares of Stock purchased under this Warrant shall be and are deemed to be issued to Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares (unless the Conversion Right is exercised). Subject to the provisions of Section 2, certificates for the shares of Stock so purchased shall be delivered to Holder by the Company's transfer agent at the Company's expense within a reasonable time after the rights represented by this Warrant have been exercised. Each stock certificate so delivered shall be in such denominations of Stock as may be requested by Holder and shall be registered in the name of Holder or such other name as shall be designated by Holder, subject to the limitations contained in Sections 1(b) and 2. If, upon exercise of this Warrant, fewer than all of the shares of Stock evidenced by this Warrant are purchased prior to the Expiration Date of this Warrant, one or more new warrants substantially in the form of, and on the terms in, this Warrant will be issued for the remaining number of shares of Stock not purchased upon exercise of this Warrant. (b) No shares of Stock will be issued pursuant to the exercise of this Warrant unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange or automated quotation system upon which the Stock may then be listed. Assuming such compliance, for income tax purposes the Stock shall be considered transferred to the Holder on the date on which this Warrant is exercised with respect to such Stock. (c) In lieu of the payment of the Stock Purchase Price, the Holder shall have the right (but not the obligation), to require the Company to convert this Warrant, in whole or in part, into shares of Stock (the "Conversion Right") as provided for in this Section 1(c). Upon exercise of the Conversion Right, the Company shall deliver to the Holder (without payment by the Holder of any of the Stock Purchase Price) that number of shares of Stock equal to the quotient obtained by dividing (x) the value of the Warrant at the time the Conversion Right is exercised (determined by subtracting the aggregate Stock Purchase Price in effect immediately prior to the exercise of the Conversion Right from the aggregate Market Value (as defined in Section 1(e) below), for the shares of Stock issuable upon exercise of the Warrant immediately prior to the exercise of the Conversion Right) by (y) the Market Value of one share of Stock immediately prior to the exercise of the Conversion Right. (d) The Conversion Right may be exercised by the Holder on any business day between (i) the Commencement Date and (ii) the Expiration Date by delivering the Warrant Certificate with a duly executed Subscription Agreement in the form attached hereto with the conversion section completed to the Company, exercising the Conversion Right and specifying the total number of shares of Stock the Holder will purchase pursuant to such conversion. (e) For the sole purpose of determining the number of shares of the Stock which shall be delivered to the Holder by the Company pursuant to the Conversion Right as set forth in Section 1(c) above, Market Value shall mean the average of the daily high and low price of a share of the Stock as listed on the Nasdaq National Market (or such other exchange or quotation system on which the Stock may then be listed) for the ten (10) days of trading immediately preceding the date of exercise of such Conversion Right. 2. Shares to Be Fully Paid; Reservation of Shares. The Company covenants and agrees that all shares of Stock which may be issued upon the exercise of this Warrant (the "Warrant Shares") and all shares of common stock issuable upon conversion of the Warrant Shares (the -2- "Conversion Shares") will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any stockholder and free of all taxes (other than income taxes which may be applicable to Holder), liens and charges with respect to the issue thereof. The Company covenants that it will reserve and keep available a sufficient number of shares of its authorized but unissued Stock for such exercise and sufficient shares of common stock for such conversion. The Company will take all such reasonable action as may be necessary to assure that such shares of Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any domestic securities exchange or automated quotation system upon which the Stock may be listed. 3. Adjustment of Stock Purchase Price and Number of Shares. The Stock Purchase Price and, in some cases, the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3. 3.1 Subdivision or Combination of Stock and Stock Dividend. In case the Company shall at any time subdivide its outstanding shares of Stock into a greater number of shares or declare a dividend upon its Stock payable solely in shares of Stock, the Stock Purchase Price in effect immediately prior to such subdivision or declaration shall be proportionately reduced, and the number of shares issuable upon exercise of the Warrant shall be proportionately increased. Conversely, in case the outstanding shares of Stock of the Company shall be combined into a smaller number of shares, the Stock Purchase Price in effect immediately prior to such combination shall be proportionately increased, and the number of shares issuable upon exercise of the Warrant shall be proportionately reduced. 3.2 Notice of Adjustment. Promptly after adjustment of the Stock Purchase Price or any increase or decrease in the number of shares purchasable upon the exercise of this Warrant, the Company shall give written notice thereof, by first class mail, postage prepaid, addressed to the Holder at the address of such Holder as shown on the books of the Company. The notice shall be signed by an authorized officer of the Company and shall state the effective date of the adjustment and the Stock Purchase Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 3.3 Other Notices. If at any time: (a) the Company shall declare any cash dividend upon its Stock; (b) the Company shall declare any dividend upon its Stock payable in stock (other than a dividend payable solely in shares of Stock) or make any special dividend or other distribution to the holders of its Stock; -3- (c) there shall be any consolidation or merger of the Company with another corporation, or a sale of all or substantially all of the Company's assets to another corporation; or (d) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; then, in any one or more of said cases, the Company shall give, by certified or registered mail, postage prepaid, addressed to the registered holder of this Warrant at the address of such holder as shown on the books of the Company, (i) at least 10 days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such dissolution, liquidation or winding-up, (ii) at least 10 days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger or sale, and (iii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, at least 10 days' written notice of the date when the same shall take place. Any notice given in accordance with clause (i) above shall also specify, in the case of any such dividend, distribution or option rights, the date on which the holders of Stock shall be entitled thereto. Any notice given in accordance with clause (iii) above shall also specify the date on which the holders of Stock shall be entitled to exchange their Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, as the case may be. If the Holder of the Warrant does not exercise this Warrant prior to the occurrence of an event described above, except as provided in Sections 3.1 and 3.4, the Holder shall not be entitled to receive the benefits accruing to existing holders of the Stock pursuant to such event. 3.4 Changes in Stock. In case at any time prior to the Expiration Date, the Company shall be a party to any transaction (including, without limitation, a merger, consolidation, sale of all or substantially all of the Company's assets or recapitalization of the Stock) in which the previously outstanding Stock shall be changed into or exchanged for different securities of the Company or common stock or other securities of another corporation or interests in a noncorporate entity or other property (including cash) or any combination of any of the foregoing (each such transaction being herein called the "Transaction" and the date of consummation of the Transaction being herein called the "Consummation Date"), then, as a condition of the consummation of the Transaction, lawful and adequate provisions shall be made so that each Holder, upon the exercise hereof at any time on or after the Consummation Date, shall be entitled to receive, and this Warrant shall thereafter represent the right to receive, in lieu of the Stock issuable upon such exercise prior to the Consummation Date, the highest amount of securities or other property to which such Holder would actually have been entitled as a stockholder upon the consummation of the Transaction if such Holder had exercised such Warrant immediately prior thereto. The provisions of this Section 3.4 shall similarly apply to successive Transactions. -4- 4. Investment Representations. (a) By receipt of this Warrant, by its execution and by its exercise in whole or in part, the Holder represents to the Company the following: (i) the Holder understands that this Warrant and any Stock purchased upon its exercise are securities, the issuance of which requires compliance with federal and state securities laws; (ii) the Holder is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire such securities; (iii) the Holder is acquiring these securities for investment for the Holder's own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the Securities Act of 1933, as amended (the "Act"); (iv) the Holder acknowledges and understands that the securities constitute "restricted securities" under the Act and must be held indefinitely unless they are subsequently registered under the Act or an exemption from such registration is available. The Holder further acknowledges and understands that the Company is under no obligation hereunder to register the securities (other than pursuant to the Registration Rights Agreement (as defined below)); (v) the Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the undersigned's investment in this Warrant; (vi) the Holder has received all of the information the Holder has requested from the Company and considers necessary or appropriate for deciding whether to purchase this Warrant; (vii) the Holder has the ability to bear the economic risks of his prospective investment; (viii) the Holder is able, without materially impairing his financial condition, to hold this Warrant for an indefinite period of time and to suffer complete loss on his investment; (ix) the Holder understands and agrees that (A) he may be unable to readily liquidate his investment in this Warrant and that the Warrant Shares and the Conversion Shares must be held indefinitely unless a subsequent disposition thereof is registered or qualified under the Act and applicable state securities or Blue Sky laws or is exempt from such registration or qualification, and that the Company is not required to register the same or to take any action or -5- make such an exemption available except to the extent provided pursuant to the Registration Rights Agreement and (B) the exemption from registration under the Act afforded by Rule 144 promulgated by the Securities and Exchange Commission ("Rule 144") depends upon the satisfaction of various conditions by the undersigned and the Company and that, if applicable, Rule 144 affords the basis for sales under certain circumstances in limited amounts, and that if such exemption is utilized by the undersigned, such conditions must be fully complied with by the undersigned and the Company, as required by Rule 144; and (x) the Holder either (A) is familiar with the definition of and the Holder is an "accredited investor" within the meaning of such term under Rule 501 of Regulation D promulgated under the Act, or (B) is providing representations and warranties reasonably satisfactory to the Company and its counsel, to the effect that the sale and issuance of Warrant may be made without registration under the Act or any applicable state securities and Blue Sky laws. (b) The Holder agrees, in connection with any underwritten public offering of the Company's securities, (1) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Stock of the Company held by Holder (other than those shares included in such registration or any other effective registration) without the prior written consent of the Company or the underwriters managing such underwritten public offering of the Company's securities for six months from the effective date of such registration, and (2) further agrees to execute any agreement reflecting the obligation of the Holder set forth in (1) above as may be requested by the underwriters at the time of the public offering. 5. Issue Tax. The issuance of certificates for shares of Stock upon the exercise of the Warrant shall be made without charge to the holder of the Warrant for any issue tax in respect thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the then holder of the Warrant being exercised. 6. No Voting or Dividend Rights; Limitation of Liability. Nothing contained in this Warrant shall be construed as conferring upon the holder hereof the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as a stockholder of the Company. Except for the adjustment to the Stock Purchase Price pursuant to Section 3.1 in the event of a dividend on the Stock payable in shares of Stock, no dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised. No provisions hereof, in the absence of affirmative action by the holder to purchase shares of Stock, and no mere enumeration herein of the rights or privileges of the holder hereof, shall give rise to any liability of such holder for the Stock Purchase Price or as a stockholder of the Company whether such liability is asserted by the Company or by its creditors. -6- 7. Restrictions on Transferability of Securities; Compliance With Securities Act. 7.1 Restrictions on Transferability. The Warrant Shares and the Conversion Shares shall not be transferable in the absence of the effectiveness of a registration statement with respect to such securities under the Act, or an exemption therefrom. This Warrant may not be transferred in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Holder only by the Holder. The terms of this Warrant shall be binding upon the executors, administrators, heirs, successors and assigns of the Holder. 7.2 Restrictive Legend. In the absence of the effectiveness of registration under the Act or an exemption therefrom as contemplated by Section 7.1, each certificate representing the Warrant Shares, the Conversion Shares or any other securities issued in respect of the Warrant Shares or the Conversion Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required under applicable state securities laws): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER. 8. Registration Rights. The Warrant Shares and the Conversion Shares are subject to the rights and obligations set forth in that certain Registration Rights Agreement by and between the Company and the Holder of even date herewith (the "Registration Rights Agreement"). 9. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 10. Notices. Any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered or shall be sent by certified or registered mall, postage prepaid, to each such holder at its address as shown on the books of the Company or to the Company at the address indicated therefor in the first paragraph of this Warrant. 11. Descriptive Headings and Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York without reference to the principles of conflicts of laws. -7- 12. Lost Warrants or Stock Certificates. The Company represents and warrants to Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant or stock certificate representing the Warrant Shares or the Conversion Shares and in the case of any such loss, theft, destruction or mutilation, upon receipt of an indemnity and, if requested, bond reasonably satisfactory to the Company, or in the case of any such mutilation, upon surrender and cancellation of such Warrant or stock certificate, the Company at its expense will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 13. Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share pay the holder entitled to such fraction a sum in cash equal to the fair market value of any such fractional interest as it shall appear on the public market, or if there is no public market for such shares, then as shall be reasonably determined by the Company. * * * * * * * * * * -8- IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer, thereunto duly authorized as of the date first written above. UNIDIGITAL INC. By: ---------------------------------- William E. Dye President and Chief Executive Officer -9- FORM OF SUBSCRIPTION AGREEMENT (To be signed and delivered upon exercise of Warrant) UNIDIGITAL INC. 20 West 20th Street New York, New York 10011 Attention: President The undersigned, the holder of the within Warrant (Warrant Certificate Number __________), hereby irrevocably elects to exercise the purchase right represented by such Warrant for, and to purchase thereunder,_______________ shares of Common Stock, par value $0.01 per share (the "Stock"), of UNIDIGITAL INC. (the "Company") and subject to the following paragraph, herewith makes payment of ___________________ Dollars ($________) therefor and requests that the certificates for such shares be issued in the name of, and delivered to, _____________ whose address is _____________________________________________. The undersigned does/does not (circle one) request the exercise of the within Warrant pursuant to the cashless exercise right set forth in Section 1(c) of the Warrant. If the exercise of this Warrant is not covered by a registration statement effective under the Securities Act of 1933, as amended (the "Securities Act"), the undersigned represents that: (i) the undersigned is acquiring such Stock for investment for his own account, not as nominee or agent, and not with a view to the distribution thereof and the undersigned has not assigned or otherwise arranged for the selling, granting any participation in, or otherwise distributing the same; (ii) the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the undersigned's investment in the Stock; (iii) the undersigned has received all of the information the undersigned has requested from the Company and considers necessary or appropriate for deciding whether to purchase the shares of Stock; (iv) the undersigned has the ability to bear the economic risks of his prospective investment; (v) the undersigned is able, without materially impairing his financial condition, to hold the shares of Stock for an indefinite period of time and to suffer complete loss on his investment; (vi) the undersigned understands and agrees that (A) he may be unable to readily liquidate his investment in the shares of Stock and that the shares must be held indefinitely unless a subsequent disposition thereof is registered or qualified under the Securities Act and applicable state securities or Blue Sky laws or is exempt from such registration or qualification, and that the Company is not required to register the same or to take any action or make such an exemption available except to the extent provided in the within Warrant and (B) the exemption from registration under the Securities Act afforded by Rule 144 promulgated by the Securities and Exchange Commission ("Rule 144") depends upon the satisfaction of various conditions by the undersigned and the Company and that, if applicable, Rule 144 affords the basis for sales under certain circumstances in limited amounts, and that if such exemption is utilized by the undersigned, such conditions must be fully complied with by the undersigned and the Company, as required by Rule 144; (vii) the undersigned either (A) is familiar with the definition of and the undersigned is an "accredited investor" within the meaning of such term under Rule 501 of Regulation D promulgated under the Securities Act, or (B) is providing representations and warranties reasonably satisfactory to the Company and its counsel, to the effect that the sale and issuance of Stock upon exercise of such Warrant may be made without registration under the Securities Act or any applicable state securities and Blue Sky laws; and (viii) the address set forth below is the true and correct address of the undersigned's residence. DATED: _______________ ------------------------------------ (Signature must conform in all respects to name of holder as specified on the face of the Warrant) ------------------------------------ ------------------------------------ (Address) -2- SCHEDULE OF HOLDERS ------------------- Principal Number of Holder Amount of Note Warrants ------ -------------- -------- Lawrence & Company Inc. $1,000,000 100,000 Trans Euro Investments Ltd. 500,000 50,000 Alcamin Anstalt Vaduz 300,000 30,000 I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000 Henry Harris 200,000 20,000 David Wachsman 150,000 15,000 Harvey Silverman 150,000 15,000 Douglas Schwarzwaelder 100,000 10,000 ---------- ------- TOTAL: $2,600,000 260,000 ========== ======= EX-4.3 4 REGISTRATION RIGHTS AGREEMENT EXHIBIT 4.3 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of the 21st day of May 1997 by and between UNIDIGITAL INC., a Delaware corporation (the "Company"), and ________________________ (the "Holder"). R E C I T A L S --------------- A. The Holder and the Company are parties to that certain Promissory Note of even date herewith (the "Promissory Note") pursuant to which the Holder has agreed to extend a loan to the Company. B. In partial consideration of the extension of the loan by the Holder to the Company pursuant to the Note, the Company has issued to the Holder a five-year warrant to purchase shares of common stock of the Company, par value $0.01 per share ("Common Stock") on the terms and conditions set forth in that certain Warrant between the Company and the Holder of even date herewith (the "Warrant"). C. The Company desires to grant to the Holder the registration rights set forth herein with respect to the shares of Common Stock for which may be issued to the Holder pursuant to the Warrant. 1. REGISTRATION RIGHTS. 1.1 Definitions. For purposes of this Section 1: (a) Registration. The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and the declaration or ordering of effectiveness of such registration statement. (b) Registrable Securities. The term "Registrable Securities" means: any shares of Common Stock of the Company issued or issuable to the Holder pursuant to the Warrant; provided, however, that with respect to any particular Registrable Security, such security shall cease to be a Registrable Security when, as of the date of determination, (i) it has been effectively registered under the Securities Act of 1933, as amended (the "Securities Act") and disposed of pursuant thereto, (ii) registration under the Securities Act is no longer required for the immediate public distribution of such security or (iii) it has ceased to be outstanding. The term "Registrable Securities" means any and/or all of the securities falling within the foregoing definition of a "Registrable Security." In the event of any merger, reorganization, consolidation, recapitalization or other change in corporate structure affecting the Common Stock, such adjustment shall be made in the definition of "Registrable Security" as is appropriate in order to prevent any dilution or enlargement of the rights granted pursuant to the Agreement. (c) SEC. The term "SEC" or "Commission" means the U.S. Securities and Exchange Commission. 1.2 Registrations. (a) Piggyback Registration Rights. The Company shall notify the Holder in writing at least twenty (20) days prior to filing any registration statement under the Securities Act for purposes of effecting a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to a merger, an acquisition or pursuant to Form S-8 or successor form, collectively the "Excluded Registrations") and will afford the Holder an opportunity to include in such registration statement all or any part of the Registrable Securities then held by the Holder. If the Holder desires to include in any such registration statement all or any part of the Registrable Securities held by the Holder, it shall, within twenty (20) days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such notice shall inform the Company of the number of Registrable Securities the Holder wishes to include in such registration statement. If the Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, the Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities (other than with respect to Excluded Registrations), all upon the terms and conditions set forth herein. (b) Underwriting. If a registration statement under which the Company gives notice under Section 1.2(a) is for an underwritten offering, then the Company shall so advise the Holder in writing. In such event, the right of the Holder to have its Registrable Securities included in a registration pursuant to this Section 1.2(b) shall be conditioned upon the Holder's participation in such underwriting and the inclusion of the Holder's Registrable Securities in the underwriting to the extent provided herein. Notwithstanding any other provision of this Agreement, if the managing underwriter or underwriters determine(s) in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriter(s) may exclude shares (including Registrable Securities) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to the Company in full, and second, to the Holder and to any other security holders of the Company whose securities are being offered for sale pursuant to such registration statement or whose securities are required to be included in such registration statement pursuant to registration rights granted to such security holders by the Company (collectively, the "Other Holders") pro-rata based on the total number of shares of Common Stock originally requested to be sold by the Holder and 2 the Other Holders pursuant to such registration statement. If the Holder disapproves of the terms of any such underwriting, the Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten (10) business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. The Holder hereby agrees that, in connection with any underwritten offering by the Company, if requested by the managing underwriter, it will not sell any of its Registrable Securities pursuant to a registration statement in which it is not included pursuant to this Section 1.2, for a period of up to six months from the effective date of any such registration statement, without the prior written consent of the managing underwriter, if any, of the public offering to which such registration statement may relate. Further, in connection with any underwritten public offering of Common Stock by the Company, the Holder shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. (c) Expenses. All expenses incurred in connection with a registration pursuant to Section 1.2(a) (excluding underwriters' and brokers' discounts and commissions), including, without limitation all federal and "blue sky" registration and qualification fees, printers' and accounting fees, fees and disbursements of counsel for the Company and reasonable fees and disbursements of counsel for the Holder, shall be borne by the Company. The Holder shall bear its proportionate share (based on the total number of shares sold in such registration) of all discounts, commissions or other amounts payable to underwriters or brokers in connection with such registration. 1.3 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities under this Agreement, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holder, keep such registration statement effective for up to ninety (90) days. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Holder such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as the Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Holder that are included in such registration. 3 (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. (f) Notify the Holder at any time when a prospectus relating to such registration statement is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. (g) Furnish, at the request of the Holder, on the date that its Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to the Holder, addressed to the underwriters, if any, and to the Holder, and (ii) a "comfort" letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to the Holder, addressed to the underwriters, if any, and to the Holder requesting registration of Registrable Securities. 1.4 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 1.2 that the Holder shall furnish to the Company such information regarding the Holder, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to timely effect the registration of its Registrable Securities. 1.5 Delay of Registration. The Holder shall not have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1. 4 1.6 Indemnification. In the event any Registrable Securities are included in a registration statement under Section 1.2: (a) By the Company. To the extent permitted by law, the Company shall indemnify and hold harmless the Holder or any underwriter (as defined in the Securities Act) for the Holder and each person, if any, who controls the Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the "1934 Act") (collectively, "Indemnitees"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the l934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the 1934 Act, any federal or state securities law or any rule or regulation promulgated under the Securities Act, the 1934 Act or any federal or state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each of the Indemnitees for any legal or other expenses reasonably incurred by them, as incurred, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 1.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with any information furnished expressly for use in connection with such registration by any Indemnitee, including without limitation, any information furnished by the Holder to the Company pursuant to Section 1.4 hereof. 5 (b) By the Holder. To the extent permitted by law, the Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, and each person, if any, who controls the Company within the meaning of the Securities Act or the 1934 Act (collectively, "Company Indemnitees"), against any losses, claims, damages or liabilities (joint or several) to which the Company or any such Company Indemnitee may become subject under the Securities Act, the 1934 Act or other federal or state law, but only, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Holder, and known by the Holder to be furnished, expressly for use in connection with such registration, including without limitation any information furnished by the Holder to the Company pursuant to Section 1.4 hereof; and the Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such Company Indemnitee as incurred in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this subsection 1.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder which consent shall not be unreasonably withheld; and provided further, that the total amounts payable in indemnity by the Holder under this Section 1.6(b) in respect of any Violation shall not exceed the net proceeds received by the Holder in the registered offering out of which such Violation arises. (c) Notice. Promptly after receipt by an indemnified party under this Section 1.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.6, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.6. (d) Defect Eliminated in Final Prospectus. The foregoing indemnity agreements of the Company and the Holder are subject to the condition that, insofar as they relate to any Violation made in a preliminary prospectus but eliminated or remedied in the 6 amended prospectus on file with the SEC at the time the registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity agreement shall not inure to the benefit of any person if a copy of the Final Prospectus was furnished to the indemnified party and was not furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act. (e) Survival. The obligations of the Company and the Holder under this Section 1.6 shall survive the completion of any offering of Registrable Securities in a registration statement, and otherwise. 1.7 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Registrable Securities to the public without registration, the Company agrees to make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, and to use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the 1934 Act. 2. ASSIGNMENT AND AMENDMENT. 2.1 Assignment. The registration rights granted to the Holder shall not be assignable to any subsequent holder of the Registrable Securities. 2.2 Amendment of Rights. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holder. 2.3 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed to have been delivered when delivered personally (including by means of telex, telecopier or telefax systems), or the day following delivery to a reputable overnight courier service which guarantees delivery within 24 hours, charges prepaid (or upon the date mailed, if sent certified mail, postage prepaid, return receipt requested, and delivery is refused or returned as undeliverable) to the parties to this Agreement as follows: (a) If to the Company: Unidigital Inc. 20 West 20th Street New York, New York 10011 Attn: William E. Dye, President 7 with a copy to: David J. Sorin, Esquire Buchanan Ingersoll 500 College Road East Princeton Forrestal Center Princeton, NJ 08540 (b) If to the Holder: --------------------------------- --------------------------------- --------------------------------- --------------------------------- with a copy to: --------------------------------- --------------------------------- --------------------------------- or at such other address as any party may designate by giving ten (10) days advance written notice to the other party. 2.4 Entire Agreement. This Agreement constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting the subject matter hereof. 2.5 Governing Law. This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of New York without regard to any law relating to conflict of laws and choice of law. 2.6 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 2.7 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement. 2.8 Captions. The captions to sections of this Agreement have been inserted for identification and reference purposes only and shall not be used to construe or interpret this Agreement. 8 2.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 2.10 Costs And Attorneys' Fees. In the event that any action, suit or other proceeding is instituted concerning or arising out of this Agreement or any transaction contemplated hereunder, the prevailing party shall recover all of such party's costs and attorneys' fees incurred in each such action, suit or other proceeding, including any and all appeals or petitions therefrom. * * * * * * 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. THE COMPANY: THE HOLDER: UNIDIGITAL INC. [ ] By:________________________ By:_________________________ Title:_____________________ Title:______________________ 10 SCHEDULE OF HOLDERS Principal Number of Holder Amount of Note Warrants ------ -------------- -------- Lawrence & Company Inc. $1,000,000 100,000 Trans Euro Investments Ltd. 500,000 50,000 Alcamin Anstalt Vaduz 300,000 30,000 I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000 Henry Harris 200,000 20,000 David Wachsman 150,000 15,000 Harvey Silverman 150,000 15,000 Douglas Schwarzwaelder 100,000 10,000 ---------- ------- TOTAL: $2,600,000 260,000 ========== ======= EX-10.1 5 SHARE PURCHASE AGREEMENT EXHIBIT 10.1 DATED 22nd MAY 1997 FRANCIS EDWARD ALLEN AND OTHERS - and - ELEMENTS (UK) LIMITED - and - LIBRA CITY CORPORATE PRINTING LIMITED - and - UNIDIGITAL INC. SHARE PURCHASE AGREEMENT BY WAY OF DEED relating to the acquisition by Elements (UK) Limited of the entire issued share capital of Libra City Corporate Printing Limited WILDE SAPTE LONDON TABLE OF CONTENTS No Clause Page No. 1. INTERPRETATION....................................................2 2. SALE AND PURCHASE................................................10 3. CONDITIONS PRECEDENT.............................................10 4. CONSIDERATION....................................................11 5. COMPLETION.......................................................15 6. DELIVERY TO SOLICITORS...........................................19 7. WARRANTIES.......................................................19 8. WARRANTIES IN RELATION TO SUBSIDIARIES...........................21 9. LIMITATION OF WARRANTORS' LIABILITY..............................21 10. RESTRICTIVE COVENANTS............................................24 11. POWER OF ATTORNEY................................................25 12. GUARANTEE OF PURCHASER'S OBLIGATIONS.............................26 13. WAIVERS..........................................................26 14. POST-COMPLETION OPERATION........................................27 15. COSTS AND WITHHOLDINGS...........................................27 16. ASSIGNMENT.......................................................28 17. ANNOUNCEMENTS....................................................28 18. JURISDICTION.....................................................29 19. NOTICES..........................................................29 20. INVALIDITY.......................................................30 21. FURTHER ASSURANCE................................................30 22. ENTIRE AGREEMENT.................................................30 23. COUNTERPARTS.....................................................31 SCHEDULE 1 - The Vendors..................................................32 SCHEDULE 2 Part 1 - The Company and the Subsidiaries......................33 SCHEDULE 2 Part 2 - The Subsidiaries......................................34 SCHEDULE 3 - Confirmation of no Claims....................................39 SCHEDULE 4 - The Warranties...............................................42 SCHEDULE 5 - The Property.................................................77 Agreed Form Documents...... Clause reference Deed of Tax Covenant Clause 5.2.3 Disclosure Letter Clause 5.2.11 Service Agreement(s) Clause 5.2.12 Waiver of pre-emption rights Clause 3.1.1 Board minutes of the Company and Subsidiaries Clause 5.3 Stock Transfer Forms and any Powers of Attorney required to transfer the Shares Clause 5.2.1 THIS DEED is made the day of 1997 BETWEEN: (1) THE SEVERAL PERSONS whose names and addresses are set out in Schedule 1 (together the "Vendors"); (2) ELEMENTS (UK) LIMITED a company incorporated in England and Wales with registered number 02888039 and having its registered office at 48 Margaret Street, London WIN 7D (the "Purchaser"); (3) LIBRA CITY CORPORATE PRINTING LIMITED a company incorporated in England and Wales with registered number 2339001 and having its registered office at Truscott House, 32-32 East Road, London N1 6AD further information about which is contained in Schedule 2 (the "Company"); and (4) UNIDIGITAL INC. is a Delaware corporation having its principal place of business at 20 West 20th Street, New York, NY 10011, United State of America (the "Guarantor"). WHEREAS: (A) The Vendors are together the beneficial owners of the whole of the issued and allotted share capital in the Company and each of the Vendors is the beneficial owner of the number of shares in the Company set against his name in Schedule 1. (B) The Purchaser is a wholly owned subsidiary of the Guarantor. (C) The Vendors have now agreed to sell and the Purchaser has agreed to buy the whole of the issued and allotted share capital in the Company on the terms and conditions hereinafter contained. NOW IT IS HEREBY AGREED as follows: 1. INTERPRETATION In this Deed (including the Recitals and Schedules), unless the context otherwise requires or except as otherwise expressly provided: 1.1 Definitions "1996 Accounts" means the consolidated audited accounts of the Company and its Subsidiaries for the period to 31st December 1996; "1996 Turnover Figure" means the sum shown in the 1996 Accounts as the turnover as defined therein of the Company and the Subsidiaries during the period to which the 1996 Accounts relate, generated on sales on an arm's length basis to third party customers and which, for the avoidance of doubt, was (pound)3,964,753; "1997 Turnover Figure" means the sum for all turnover of the Company and its Subsidiaries, stated on the same basis as the 1996 Turnover Figure, for the period from 1st January to 31st December 1997 save that such turnover as is attributable to (a) sales to any company within the Unidigital Group, (b) sales to any new customers introduced to the Company and/or the Subsidiaries by any member of the Unidigital Group, or (c) sales attributable to any new employees of the Company and/or its Subsidiaries (other than a new international sales executive and new employees replacing existing employees of the Company and/or its Subsidiaries after Completion) shall be excluded for the purpose of calculating of the 1997 Turnover Figure; "1997 Statement" means the statement to be issued by the Accountants indicating the 1997 Turnover Figure; "Accounts" means the consolidated audited financial statements of the Company and the Subsidiaries including without limitation the Balance Sheet, an audited profit and loss account (including any notes thereto) for the financial year ended on the Last Accounts Date and all reports. accounts, consolidated accounts and other documents required by law to be included in or attached thereto; -2- "Accountants" means Ernst & Young, Rolls House. 7 Rolls Buildings, Fetter Lane, London EC4A 1NH; "Agreed Form" means in a form approved by the Parties and initialed for identification by the Vendors' Solicitors and the Purchaser's Solicitors; "Allen Shares" means the 7,263 ordinary shares in the capital of the Company held by Mr. Allen; "Auditors" means Moore Stephens of St. Paul's House, London, EC4P 4BN; "Balance Sheet" means a consolidated audited balance sheet of the Company and the Subsidiaries as at the Last Accounts Date (including the notes thereto); "Baronsmead" means Baronsmead Investment Trust plc of Princes Court, 7 Princes Street, London EC2R 8AQ; "Bishop Shares" means the 704 ordinary shares in the capital of the Company held by Mr. Bishop; "Business" means the business of the Company as carried on up to the Completion Date; "Business Day" means any day (other than a Saturday or a Sunday) which is not a public or bank holiday in England; "Claim" means any claim brought by the Purchaser against the Vendors (or any of them) pursuant to the warranties and indemnities given by the Vendors to the Purchaser and contained in Clause 7 and Schedule 4 to this Deed, the Deed of Covenant (Tax) and all other provisions of this Deed and all deeds and documents entered into pursuant to this Deed and "Claims" shall be construed accordingly; "Chase Shares" means the 4,569 ordinary shares in the capital of the Company held by Chase Nominees on behalf of Invesco; "Chase Nominees" means Chase Nominees Limited of Woolgate House, Coleman Street, London EC2P 2HD; -3- "Companies Act" means the Companies Act 1985 as amended from time to time; "Completion" means the completion of the sale and purchase of the Shares in accordance with Clause 5; "Completion Accounts" means the Completion Balance Sheet and the unaudited profit and loss account of the Company for the period ending on 30th April 1997 to be prepared by the existing management of the Company and to be reviewed by the Auditors and the Accountants in accordance with Clause 4.3; "Completion Balance Sheet" means the unaudited balance sheet (including the notes thereto) of the Company ant its Subsidiaries as at 30th April 1997 to be prepared in accordance with Clause 4 ant, if such balance sheet shall be adjusted pursuant to the provisions of Clause 4, means such balance sheet as so adjusted; "Completion Date" means the date hereof; "Conditions Precedent" means the conditions set out in Clause 3; "Deed of Tax Covenant" means a deed of covenant in the Agreed Form to be executed by the Vendors and delivered on Completion in accordance with Clause S.2.3; "Dellow Shares" means the 312 ordinary shares in the capital of the Company held by Mr. Dellow; "Disclosure Letter" means the letter of even date herewith in the Agreed Form expressly referring to Clause 7 and which is delivered to the Purchaser by or on behalf of the Vendors before the signing of this Deed; "Group" means a holding company and its subsidiaries as the same are defined in section 736 of the Companies Act 198S; "Intellectual Property Rights" means all patents, trade marks and service marks (whether registered or not), registered design rights, utility models, applications for any of the foregoing and the right to apply for any of the foregoing in any part of the world, copyright, design rights, inventions, confidential information, trade secrets, know-how, production data, business or trade names and any other -4- intellectual property rights or similar rights situated in any country and the benefit (and burden) of any and all licenses in connection with any of the foregoing; "Invesco" means Invesco English and International Trust plc of 11 Devonshire Square, London EC2M 4YR; "Investors" means Baronsmead and Invesco; "Last Accounts Date" means 31st December 1996; "Lease" means the lease of the Property dated 24th January 1994 between ( 1) the Haberdashers Company (Governors of Robert Aske's Charity) and (2) Libra City Corporate Printing Limited; "Libra Group" means the Group of companies of which the Company is the holding company; "MIMDC" means Baronsmead Ventures Nominees Limited (previously MIMDC Nominees Limited and Invesco Ventures Nominees Limited) of Princes Court, 7 Princes Street, London EC2R 8AQ; "MIMDC Shares" means the 2,538 ordinary, shares in the capital of the Company held by MIMDC on behalf of Baronsmead; "Mr. Allen" means Francis Edward Allen of The Croft High Road, Wilmington, Kent DA2 7EG; "Mr. Bishop" means Robin David Bishop of Mallard Cottage, The Street, Corpusty, Norfolk NR11 6QP; "Mr. Dellow" means Kenneth Dellow of 55 Saville Road, Chadwell Heath, Romford, Essex RM6 6DS; "Mr. Tylee" means Edward David Tylee of 5 Hotham Close, Sutton at Hore, Dartford, Kent DA4 9ET; -5- "Net Asset Value" means the aggregate of the value of the assets of the Company (after the deduction of the amount of any dividend paid pursuant to Clause 3.4 of this Agreement including all taxes payable by the Company in respect thereof) and the Subsidiaries less the aggregate of the value of its liabilities (whether actual, contingent or deferred) as at 30th April 1997 as calculated in accordance with Clause 4 and as shown in the Completion Balance Sheet; "Property" means the property short details of which are set out in Schedule 5; "Purchaser" means Regent Communications (UK) Limited or its successors in title and assigns (as the case may be); "Purchaser's Solicitors" means Wilde Sapte of 1 Fleet Place, London EC4M 7WS; "Relevant Percentage" means in relation to each Vendor. the following percentage: 100% x A --- B Where: A is the consideration to be paid to that Vendor as listed in Clause 4.1; and B is the total consideration to be paid to the Vendors as listed in Clause 4.1; "Restricted Period" means, in the case of Mr. Allen the period commencing on the date hereof and ending two (2) years from the date hereof and in all other cases the period commencing on the date hereof and ending one (1) year from the date hereof; "Review" means the review required to be given by the Auditors and the Accountants pursuant to Clause 4.3 and. if such review shall be adjusted pursuant to the provisions of Clause 4 means such review as so adjusted; "Service Agreements" means the service agreements in the Agreed Form to be executed by the Company and Mr. Bishop and Mr. Dellow together with the side letter to the Service Agreement between the Company and Mr. Allen dated 18th July 1989 in the Agreed Form to be executed by the Company and Mr. Allen, all of which are to be delivered on Completion in accordance with Clause 5. -6- "Shares" means the Allen Shares, the Bishop Shares, the Chase Shares, the Dellow Shares, the MIMDC Shares and the Tylee Shares; "Statement" means the statement to be prepared jointly by the Accountants and the Auditors in accordance with Clause 4.4; "Subsidiaries" means the companies listed in Part 2 of Schedule 2; "Tax" includes all present and future taxes, charges, imposts, duties, levies, deductions, withholdings or fees of any kind whatsoever, or any amount payable on account of or as security for any of the foregoing, payable at the instance of or imposed by any statutory, governmental, international, state, federal, provincial, local or municipal authority, agency, body or department whatsoever or European Union institution, in each case whether in the United Kingdom or elsewhere, together with any penalties, additions, fines. surcharges or interest relating thereto, and "Taxation" and cognate expressions shall be construed accordingly; "Taxes Act" means the Income and Corporation Taxes Act 1988; "TCGA 1992" means the Taxation of Chargeable Gains Act 1992; "Tylee Shares" means the 234 ordinary shares in the capital of the Company held by Mr. Tylee; "Unidigital Group" means the group of companies of which the Guarantor is the holding company; "United Kingdom" means England, Wales, Scotland and Northern Ireland as defined in Schedule 1 to the Interpretation Act 1978 and includes the territorial sea of the United Kingdom and any area designated by Order in Council under sub-section 1(7), Continental Shelf Act 1964; "VAT" means value added tax as provided for in VATA 1994 and legislation (or purported legislation and whether delegated or otherwise) supplemental thereto and any tax similar or equivalent to value added tax imposed by any country other than the United Kingdom and any similar or turnover tax replacing or introduced in addition to any of the same; -7- "VATA 1994" means the Value Added Tax Act 1994; "Vendors" means the several persons whose names and addresses are set out in Schedule 1 or their respective personal representatives and estates; "Vendors' Solicitors" means Brough Skerrett of One Dyers Buildings, London EC 1 N 2S X; "Warranties" means the representations, warranties and understandings referred to in Clause 7.1 and set out in Schedule 4; "Warrantors" means Mr. Allen, Mr. Bishop, Mr. Dellow and Mr. Tylee. 1.2 Interpretation 1.2.1 any reference to the provisions of any statute or subordinate legislation or of any rule made by a local authority and having the effect of law shall be deemed to refer to: 1.2.1.1 the same as in force (including any amendment or re-enactment or consolidation before or after the date hereof) for the time being; and 1.2.1.2 the provisions of any earlier statute or subordinate legislation or of any rule made by a local authority of which the said reference is itself an amendment or re-enactment or consolidation; 1.2.2 any reference to a person being "connected with" another person means: 1.2.2.1 any person connected with such other person (and "connected with" bears the meaning set out in section 839 of the Taxes Act); and/or 1.2.2.2 any company under the control of such other person (and "control" bears the meaning set out in section 840 of the Taxes Act); 1.2.3 words and expressions defined in the Companies Act 1985 and/or the Companies Act 1989 shall bear the same meanings herein; -8- 1.2.4 words denoting one gender include all genders, words denoting individuals or persons include corporations and trusts and vice versa, words denoting the singular include the plural and vice versa, and words denoting the whole include a reference to any part thereof; 1.2.5 clause and paragraph headings are inserted for ease of reference only and shall not affect construction; 1.2.6 references to Recitals, Clauses, Paragraphs and Schedules are to the recitals, clauses, paragraphs and schedules of and to this Deed; 1.2.7 references to this Deed mean this Deed together with its Recitals and Schedules and reference to this Deed or any document or agreement includes references to such document or agreement as amended, novated, supplemented, varied or replaced from time to time with the agreement of the Parties; 1.2.8 references to a Party means a party to this Deed and shall include that person's permitted assigns, transferees or successors in title in accordance with the teens of this Deed; 1.2.9 the words "including", "include" and "in particular" shall be construed as being by way of illustration only and shall be construed as limiting the generality of any foregoing words; 1.2.10 references to any English legal term any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any other legal concept shall, in respect of any jurisdiction other than England, be deemed to include the legal concept which most nearly approximates in that jurisdiction to the English legal term; and 1.2.11 any reference to an amount in pounds sterling shall include the equivalent in any other currency or combination of currencies. -9- 2. SALE AND PURCHASE 2.1 Each of the Vendors shall sell or procure the sale with full title guarantee with effect from Completion the number of the Shares set out opposite his or her name in Schedule 1 and the Purchaser relying on the representations, warranties and undertakings herein contained and the covenants contained in Clause 10 but subject to Clause 2.2 shall buy the Shares together with all dividends, distributions and rights declared, paid, created or arising after the Completion Date or attaching thereto and free from all claims, charges, liens, encumbrances, options, equities, rights of pre-emption or other third party rights. 2.2 The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the purchase of all the Shares is completed simultaneously in accordance with this Deed. 2.3 The covenants implied herein pursuant to the Law of Property (Miscellaneous Provisions) Act 1994 ("LP(MP)A") shall apply: 2.3.1 as modified or extended by the express terms of the Warranties; 2.3.2 as if the covenant set out in section 3(1) of LP(MP)A ended after the word "parties"; and 2.3.3 as if section 6(2) of LP(MP)A did not apply. 3. CONDITIONS PRECEDENT 3.1 Completion of the sale and purchase of the Shares shall be conditional upon the following conditions having been fulfilled: 3.1.1 the delivery to the Purchaser of the waivers in the Agreed Form by each of the Vendors (and by any nominee of any of the Vendors) of all and any rights of pre-emption to which he (or any nominee) may be entitled under the Articles of Association of the Company, by agreement, by statute or otherwise in respect of and transfer of Shares contemplated by this Deed; 3.1.2 the repayment of all sums (if any) owing to the Company by (a) the Vendors or the directors of the Company or any of them or (b) by any -10- person connected with any of the Vendors or director or any company directly or indirectly controlled by such persons or any of them or (c) any partnership in which such persons or company is a partner and whether or not such sums are due for repayment including but not limited to the repayment of all sums (if any) outstanding in respect of the director's loan account; 3.1.3 the release of the Company (without payment of compensation) from any debenture, charge, guarantee, cross-guarantee, indemnity, counter-indemnity, bond, security, assurance or other contingent liability of whatsoever nature or other similar obligation which relates or could be made to relate in whole or in part to debts or other liabilities or obligations, whether actual or contingent and whether now or hereinafter incurred, of any other person; and 3.1.4 the release of the Company ( without payment of compensation) from all agreements and arrangements (other than as required by the Purchaser and other than those entered into with the Investors in the ordinary course of business) between the Company on the one hand, and any Vendor or person connected with any of the Vendors on the other hand. 3.2 Each of the Vendors undertakes to use his reasonable endeavours to ensure that the Conditions Precedent are fulfilled as soon as reasonably practicable and, in any event, by Completion. 3.3 The Purchaser shall be entitled in its absolute discretion, by written notice to the Vendors, to waive any or all of the Conditions Precedent either in whole or in part. 3.4 The Company shall be entitled to make a pre-completion dividend of an amount not totalling more than (pound)70,000 provided that such dividend shall only be paid in accordance with the provisions of the Companies Act and all other applicable legislation. 4. CONSIDERATION 4.1 Subject to the remaining provisions of this Clause 4 the consideration for the Shares shall be as follows: -11- 4.1.1 in respect of the Allen Shares, the payment to Mr. Allen of an amount equal to the sum of (pound)807,213; 4.1.2 in respect of the Bishop Shares, the payment to Mr. Bishop of an amount equal to the sum of (pound)85,635; 4.1.3 in respect of the Chase Shares, the payment to lnvesco of an amount equal to the sum of (pound)555,768; 4.1.4 in respect of the Dellow Shares, the payment to Mr. Dellow of an amount equal to the sum of (pound)37,951, 4.1.5 in respect of the MIDMC Shares, the payment to Baronsmead of an amount equal to the sum of (pound)308,719; and 4.1.6 in respect of the Tylee Shares, the payment to Mr. Tylee of an amount equal to the sum of (pound)28,464. 4.2 The Purchaser shall procure that the Accountants issue to the Purchaser and the Vendors the 1997 Statement, stating the 1997 Turnover Figure, by 31st March 1998. Thereafter: 4.2.1 the Vendors shall have the right within one month of receipt of the 1997 Statement to require the Auditors to consider the 1997 Statement and the Vendors shall notify the Purchaser's Solicitors in writing within such one month period if they wish to exercise their right contained in this Clause 4.2.1. The Purchaser shall instruct the Accountants to make available to the Vendors and the Auditors all papers, documents and other information necessary to enable the Auditors properly to consider the 1997 Statement. 4.2.2 If the Auditors and the Accountants shall disagree as to the 1997 Turnover Figure but shall be able to resolve their difference or dispute concerning the same prior to the appointment of an expert pursuant to Clause 4.2.3, then in such event the Auditors and the Accountants shall jointly certify the 1997 Turnover Figures. 4.2.3 If the Auditors and the Accountants shall be unable to agree as to the 1997 Turnover Figure, the Vendors or the Purchaser shall be entitled, on five (5) Business Days' notice in writing to the other of its intention to do so, at -12- any time after one month following notification by the Vendors to the Purchaser's Solicitors of its wish to exercise its right contained in Clause 4.2.1 and before the Auditors and the Accountants shall have jointly certified the amounts of the 1997 Turnover Figure pursuant to Clause 4.2.2, to refer the matter to an independent chartered accountant (who shall act as expert and not as arbitrator) appointed for the purpose jointly by the Parties or, in the absence of agreement as to the appointment of such independent chartered accountant within ten (10) Business Days, on the application by either Party, by the President for the time being of the Institute of Chartered Accountants in England and Wales, and who shall be instructed to settle the differences between the Auditors and the Accountants relating to 1997 Turnover Figure. The costs of such independent chartered accountant shall be borne by the Vendors and the Purchaser in such proportions as the said independent chartered accountant shall direct at his sole discretion. 4.2.4 The said independent chartered accountant shall be requested to certify the amount of the 1997 Turnover Figure to the Parties, which certificate shall be final and binding on the Parties for the purposes of this Clause 4.2. 4.2.5 In addition to the consideration set out in Clause 4.1, if the 1997 Turnover Figure (as finally determined pursuant to Clauses 4.2.1 to 4.2.4 above) is greater than (pound)3,250,000, the Purchaser will pay to the Vendors a further sum of up to (pound)500,000 as additional consideration for the Shares in accordance with the following formula: (pound)500,000 x X - (pound)3,250,000 -------------------- (pound) 650,000 where: X = the 1997 Turnover Figure 4.2.6 Any payment to be made pursuant to this Clause 4.2 by the Purchaser to the Vendors shall be made within 10 Business Days of the final determination of the 1997 Turnover Figure to Clauses 4.2.1 to 4.2.4 above. 4.3 The Vendors shall procure as soon as possible following Completion and in any event by the date that is three (3) months after the Completion Date the -13- preparation by the Company of accounts of the Company as at 30th April 1997 and for the period from the Last Accounts Date to 30th April 1997 and the review by the Auditors and the Accountants of such accounts which shall be prepared in accordance with the accounting policies, principles and practices on which the Accounts and the accounts of the Company and the Subsidiaries for each of the two immediately preceding financial years of the Company and the Subsidiaries were prepared (without any reevaluation of assets). In particular, the Completion Accounts shall include accruals for any holiday pay, pension or bonus entitlement and any other sums or rights to which any employee of the Company may be entitled as at 30th April 1997. For the purposes of preparing such accounts a valuation of the stock-in-trade held by the Company and the Subsidiaries as at Completion for use in the operation of its business shall be made at or immediately following 30th April 1997 by the Parties jointly such valuation to be agreed by the Parties on the basis that: 4.3.1 the value of each item of stock and each item of work-in-progress shall be the lower of cost (on a first in, first out valuation) or net realisable value; and 4.3.2 all redundant, obsolete, used, damaged or unsaleable stock and irrecoverable work-in-progress costs shall be given no value. 4.4 The Vendors shall procure that, if the Auditors and Accountants agree the Review and the Net Asset Value. the Auditors and the Accountants shall, as soon as possible following completion of the preparation of the Completion Accounts pursuant to Clause 4.3 and in any event by the date that is three (3) months after the Completion Date, jointly produce a statement stipulating: 4.4.1 the amount of the Net Asset Value after the deduction of the amount of any dividend (including all taxes payable by the Company in respect thereof) paid pursuant to Clause 3.4; and 4.4.2 that the Completion Accounts have been prepared in accordance with Clause 4.3. 4.5 If the Auditors and the Accountants shall disagree as to the Net Asset Value but shall be able to resolve their difference or dispute concerning the same prior to the appointment of an expert pursuant to Clause 4.6, then in such event the Auditors and the Accountants shall jointly certify, the amounts of the Net Asset Value. -14- 4.6 If the Auditors and the Accountants shall be unable to agree as to the Net Asset Value, the Vendors or the Purchaser shall be entitled, on five (5) Business Days' notice in writing to the other of its intention to do so, at any time after the expiry of the three (3) month period referred to in Clause 4.3 and before the Auditors and the Accountants shall have jointly reported the amounts of the Net Asset Value pursuant to Clause 4.5, to refer the matter to an independent chartered accountant (who shall act as expert and not as arbitrator) appointed for the purpose jointly by the Parties or, in the absence of agreement as to the appointment of such independent chartered accountant within ten (10) Business Days, on the application by either Party, by the President for the time being of the Institute of Chartered Accountants in England and Wales, and who shall be instructed to settle the differences between the Auditors and the Accountants relating to Net Asset Value. The costs of such independent chartered accountant shall be borne by the Vendors and the Purchaser in such proportions as the said independent chartered accountant shall direct at his sole discretion. 4.7 The said independent chartered accountant shall be requested to certify the amount of the Net Asset Value to the Parties, which certificate shall be final and binding on the Parties for the purposes of this Clause 4.7. 4.8 On the day which falls ten (10) Business Days after the Net Asset Value has been finally agreed in accordance with the above provisions of Clause 4, if the Net Asset Value is less than (pound)823,750 the Vendors shall pay to the Purchaser the amount by which the Net Asset Value is less than (pound)823,750 which shall be treated as a reduction in the consideration. 4.9 Any payment to be made pursuant to Clause 4.2 by the Purchaser to the Vendors shall be effected by the payment by the Purchaser to each of the Vendors of that Vendor's Relevant Percentage of the total sum to be paid. 4.10 Any payment to be made pursuant to Clause 4.8 by the Vendors to the Purchaser shall be effected by payment to the Purchaser by each of the Vendors of that Vendor's Relevant Percentage of the total sum to be paid. 5. COMPLETION 5.1 Completion shall take place on the date hereof at the offices of the Purchaser's Solicitors (or as otherwise agreed between the Parties). -15- 5.2 At Completion the Vendors shall deliver (where appropriate as agent for the Company and the Subsidiaries) to the Purchaser: 5.2.1 transfers in Agreed Form in respect of the Shares duly executed by the registered holders thereof in favour of the Purchaser or its nominees; 5.2.2 certificates for the Shares (or an indemnity, in a form acceptable to the Purchaser, for any lost certificate in respect thereof) and any other documents (including any necessary waivers or consents) which may be required to give good title to the Shares and to enable the Purchaser to procure registration of the same in its name or as it may direct; 5.2.3 the Deed of Tax Covenant duly executed by each of the Warrantors; 5.2.4 the Disclosure Letter duly executed by or on behalf of the Warrantors; 5.2.5 the resignations under seal of all the directors and the secretary of the Company and the Subsidiaries substantially in the form set out in Part I of Schedule 3 and confirmation under seal by each of the Vendors in the form set out in Part 2 of Schedule 3 that they have no claims against the Company or any of the Subsidiaries; 5.2.6 cheque books in respect of all bank accounts operated by the Company and the Subsidiaries together with bank balances as at the close of business on 21st May 1997 relating to such accounts and a reconciliation of such bank statements to the cash books of the Company and the Subsidiaries; 5.2.7 the certificate of incorporation, certificate of incorporation on change of name, common seal, statutory register, minute book, share certificate book and all other books of the Company (all duly written up to date save for matters relating to the sale and purchase referred to herein); 5.2.8 all title deeds and documents relating to the Property which comprises the Lease and copy Court Order preceding it; 5.2.9 the resignation of the Auditors in the form set out in Part 3 of Schedule 3 together with a duplicate thereof; -16- 5.2.10 the Service Agreements duly executed by Messrs. Allen. Bishop and Dellow; 5.2.11 any power of attorney under which any document required to be delivered under this Clause 5 has been executed. 5.3 The Vendors shall procure that resolutions of the Board of Directors of the Company and each of the Subsidiaries arc passed and the Vendors shall deliver to the Purchaser certified copies of such board resolutions, in the Agreed Form, at Completion: 5.3.1 authorising the execution of and the performance by the Company and each of the Subsidiaries of its obligations under each of the documents to be executed by it; 5.3.2 recording acceptance of the migration from office of all the directors and the secretary and the auditors of the Company and each of the Subsidiaries; 5.3.3 revoking all existing authorities in respect of all bank accounts operate by the Company and each of the Subsidiaries and approving the opening of such new bank accounts at such banks as the Purchaser shall nominate and the transfer of such funds to such new accounts from existing bank accounts of the Company and each of the Subsidiaries as the Purchaser shall specify; 5.3.4 approving (subject only to proper stamping) the transfers of the Shares delivered hereunder and any shares in the Subsidiaries; 5.3.5 approving (subject only to proper stamping) the placing on the register of members of the Company and the Subsidiaries (as the case may be) of the names of the transferees for registration in accordance with the share transfer forms referred to above and authorizing the issue of appropriate share certificates; 5.3.6 recording the appointment of such persons as the directors (within the maximum number permitted by the articles of association of the relevant company), secretaries and auditors of the Company and the Subsidiaries as the Purchaser shall nominate; -17- 5.3.7 changing the situation of the registered office of the Company and the Subsidiaries to such place as the Purchaser may direct; and 5.3.8 adopting a new accounting reference date of the Company and the Subsidiaries. 5.4 Provided that the Vendors comply with all their obligations under Clauses 5.1, 5.2 and 5.3 (subject only to the Purchaser fulfilling its obligations under this Clause 5.4) the Purchaser shall at Completion: 5.4.1 pay to each of the Vendors the sums set out in Clause 4.1 as consideration for the Shares held by that Vendor, such payment to be made either by way of a banker's draft in favour of or by way of telegraphic transfer to the client account of the Vendor's Solicitors and provided that such payment shall be subject to the provisions of Clause 4.8; 5.4.2 deliver to the Vendors duplicates of the Deed of Tax Covenant executed by the Purchaser and the Company; 5.4.3 deliver to each of Messrs. Allen, Bishop and Dellow a duplicate of the relevant Service Agreement duly executed by the Company. 5.5 If for any reason the provisions of Clauses 5.1 to 5.3 are not fully complied with the Purchaser shall be entitled (in addition and without prejudice to any other right or remedy available to it) to elect: 5.5.1 to rescind this Deed without any liability on the part of the Purchaser; or 5.5.2 to fix a new date for Completion in which event the provisions of this Clause 5.5 shall apply, mutatis mutandis, if the Vendors fail or are unable to perform any such obligations on such other date; or 5.5.3 to proceed to Completion so & as practicable, the Vendors then being obliged to use their best endeavours to perform or procure the performance of any of the outstanding provisions of Clauses 5.1 and 5.3 by such later date as is specified by the Purchaser. -18- 6. DELIVERY TO SOLICITORS The solicitors to any Party are authorized to take delivery on behalf of such Party of any items hereunder and their receipt shall be a good discharge therefor to the Party and the solicitors to the Party making delivery. 7. WARRANTIES 7.1 The Warrantors hereby jointly and severally represent to, warrant to and undertake with the Purchaser that, save for and to the extent that any relevant fact, matter, event or circumstance giving rise to a claim under the relevant Warranty was fairly and accurately disclosed in the Disclosure Letter in respect thereof. or was done or omitted to be done at the written request of the Purchaser, each of the Warranties is as at Completion true and correct and not misleading and so that: 7.1.1 each Warranty shall be, and shall be construed as. a separate representation, warranty and undertaking by each of the Warrantors to and with the Purchaser and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Deed the Deed of Tax Covenant and the Disclosure Letter other than the factual disclosure letter; 7.1.2 each Warranty is a fundamental condition of this Deed on the basis of, and in reliance upon, which the Purchaser has entered into its obligations hereunder; 7.1.3 to the extent that any Warranty relates to present or past matters of fact the Warrants shall be deemed to constitute a representation on the faith of, and in reliance upon, which the Purchaser has entered into this Deed; 7.1.4 the rights and remedies of the Purchaser in respect of the Warranties and the liability of the Warrantors under the Warranties shall not be confined to breaches discovered before Completion, or in any way affected, modified or discharged by Completion. -19- 7.2 Where any statement in the Warranties is qualified by the expression "to the best of the knowledge, information and belief of the Warrantors" or "so far as the Warrantors are aware" or any similar expression: 7.2.1 each Warrantor shall be deemed to have knowledge of: (a) anything of which any of the other Warrantors has knowledge, or is deemed by Clause 7.2.1 (b) to have knowledge of; (b) where applicable, anything of which he ought reasonably to have knowledge given his responsibilities to the Company; and (c) anything of which he would have had knowledge had he made due and careful enquiry immediately before giving the Warranties; and 7.2.2 such expression shall be construed as a separate warranty that each Warrantor shall have made full and proper enquiries as to the accuracy, completeness and correctness of that statement. 7.3 The Investors hereby severally represent to, warrant to and undertake with the Purchaser that each of the Warranties contained in paragraphs 2.1 and 3 of Part 1 of Schedule 4 so far as they relate to their own shareholding is as at Completion true and correct and not misleading and so that: 7.3.1 each such Warranty shall be, and shall be construed as, a separate representation, warranty and undertaking by each of the Investors to and with the Purchaser and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Deed the Deed of Tax Covenant and the Disclosure Letter other than the factual disclosure letter; 7.3.2 each such Warranty is a fundamental condition of this Deed on the basis of, and in reliance upon, which the Purchaser has entered into its obligations hereunder; 7.3.3 to the extent that any such Warranty relates to present or past matters of fact the Warranty shall be deemed to constitute a representation on the faith of, and in reliance upon, which the Purchaser has entered into this Deed; -20- 7.3.4 the rights and remedies of the Purchaser in respect of such Warranties and the liability of the Investors under the Warranties shall not be confined to breaches discovered before Completion, or in any way affected, modified or discharged by Completion. 8. WARRANTIES IN RELATION TO SUBSIDIARIES In addition to and without prejudice to the Warranties referred to in Clauses 7.1 and 7.2 and set out in Schedule 4, the Warrantors further jointly and severally represent to. warrant to and undertake with the Purchaser in respect of each of the Subsidiaries as if Clauses 7.1 and 7.2 and Schedule 4 had been set out herein in full for each of the Subsidiaries but with the substitution therein of the name of the relevant Subsidiary in place of the words "the Company" wherever the same appear. 9. LIMITATION OF WARRANTORS' LIABILITY 9.1 The liability of the Warrantors for breach of or under any of the Warranties shall be limited as follows: 9.1.1 no claim may be made against the Warrantors in respect of any such liability unless notice of such claim is served on the Warrantors in writing specifying in reasonable detail the nature of the claim as soon as reasonably practicable after the Purchaser becomes aware that circumstances giving rise to such claim have arisen and in any event before 31st December 1998 (or with respect to any Warranty relating to Tax within six years of Completion); 9.1.2 the Warrantors shall not be liable to the extent that the amount of the claim or claims against them in respect of any such liability exceeds (or would when aggregated with the amount of all previous claims against any of the Warrantors in respect of any such liabilities exceed) the total consideration received by them pursuant to this Deed for the Shares; 9.1.3 the Warrantors shall not in any event be liable to the Purchaser unless a claim or claims can be validly made against them exceeding in aggregate -21- the sum of (pound)15,000 but, in the event such sum is exceeded, the Warrantors shall be liable for the entire amount thereof and not only for the excess; and 9.1.4 the Purchaser shall promptly reimburse to the relevant Warrantor(s) an amount equal to any sum paid by such Warrantor(s) in respect of any such liability which is subsequently recovered by the Purchaser or the Company (as the case may be) from any third party. 9.2 No liability of the Warrantors in respect of any breach of or claim in respect of any Warranty or Indemnity shall arise to the extent the subject matter of the claim is taken into account in computing any payment to be made to the Warrantors (or any of them) pursuant to Clause 4.2 or any adjustment in the consideration to be paid for the Shares pursuant to Clause 4.10. 9.3 If the Purchaser is entitled to make a claim against the Warrantors in respect of a matter by reason of the Warranties. undertakings. representations and obligations contained in this Deed and a claim may be made in respect of the same matter under the Deed of Tax Covenant, it is agreed that to the extent that recovery in respect of that matter may be obtained under this Deed a claim shall be made only under the terms of this Deed and not under the Deed of Tax Covenant. 9.4 The Purchaser and the Company shall not be entitled to recover the same sum or for the same loss more than once in respect of any claim under or breach of any of the Warranties or Deed of Tax Covenant and shall not otherwise obtain reimbursement or restitution more than once in respect of any cause of action giving rise to any breach of the Warranties or claim under the Deed of Tax Covenant. 9.5 Notwithstanding anything expressed or implied in this Deed to the contrary, any payment by the Warrantors pursuant to this Deed or the Deed of Tax Covenant shall be treated for all purposes by the Parties as a reduction in the consideration payable for the Shares and Clause 4 shall be modified accordingly. 9.6 Each of the Warrantors shall be jointly and severally liable in the event of any breach of the warranties. representations, undertakings, indemnities, covenants, agreements and obligations of the Warrantors under this Deed provided that the Purchaser may release or compromise the liability of any of the Warrantors hereunderor grant to any of the -22- Warrantors time or other indulgence without affecting the liability of any other of the Warrantors hereunder. 9.7 As soon as reasonably practicable after becoming aware of a claim or a matter or circumstance comes to the attention of the Purchaser for which the Warrantors ma' be liable under the Warranties, the Purchaser shall notify the Warrantors in writing and provide them with all reasonably available supporting documentation and evidence relating to such claim and shall allow the Warrantors to inspect the files and records of the Company relating to the same and to take copies of relevant documents. Subject to the Warrantors first providing the Company and the Purchaser with satisfactory security or indemnity in respect of all costs, losses, damages or claims which may thereby be incurred, the Purchaser and/or the Company shall take such action as the Warrantors may reasonably request to avoid, dispute, resist, compromise, defend or appeal against such claim including (without prejudice to the generality of the foregoing) instructing professional advisers nominated by the Warrantors to act in the name of or on behalf of the Purchaser and/or the Company but in accordance with the instructions of the Warrantors so that such action shall be delegated entirely to the Warrantors, save that the Warrantors shall not pay or settle or appeal any such claim against an ongoing customer of the Company without the prior written consent of the Purchaser (such consent not to be unreasonably withheld or delayed), and provided always that if following intimation of any such claim by the Purchaser, the Warrantors shall fail to pursue the defense thereof with prompt dispatch, the Purchaser shall be free to pay or settle same on such terms and conditions as they think fit, and to recover the amount of such claim and relative expenses from the Warrantors. 9.8 The Warrantors shall not be liable for any claim which would not have arisen but for an act or omission or transaction of the Company or the Purchaser occurring after the Completion Date, otherwise than in the ordinary course of business. 9.9 The Warrantors shall not be liable for any claim which would not have arisen but for legislation passed after Completion which is retrospective in effect. 9.10 The amount of any claim shall take into account any tax benefit accruing to the Purchaser or the Company or the amount of any relief from or deduction available to the Purchaser or the Company in respect of Taxation directly or specifically arising by virtue of the loss and damage in respect of which the claim is made. -23- 10. RESTRICTIVE COVENANTS 10.1 Each of the Warrantors save in respect of Clauses 10.1. I to 10.1.3 inclusive which shall relate only to Mr Allen hereby covenants with the Purchaser and the Company that he will not, either alone or jointly with others, whether as principal, agent, director, shareholder, independent contractor, employee or in any other capacity, whether directly or indirectly through any other person, firm or company and whether for his own benefit or that of others: 10.1.1 for the Restricted Period within fifty (50) miles of the City of London be engaged in or carry on or be interested in or concerned in (except as the holder together with any connected persons of not more than three (3) per cent. in aggregate of any class of securities of a company which class is listed or dealt in on a recognized stock exchange in the United Kingdom or elsewhere) any business in competition with the Business unless previously agreed in writing between the relevant Vendor and the Purchaser; 10.1.2 for the Restricted Period solicit for a business similar to or competing with the Business the custom or business of any person, firm or company from whom the Company has within two (2) years before the date received an order for goods or services and who has for that purpose had contact with any of the Vendors nor attempt to discourage any such person, firm or company from whom the Company has within two (2) years before Completion received an order for services from dealing with the Company; 10.1.3 for the Restricted Period solicit or entice away any officer or employee of the Company or do any act whereby any such officer or employee is encouraged to leave the employ of the Company, whether or not such officer or employee would by reason of leaving the service of the Company, commit a breach of his contract of employment; 10.1.4 at any time after the date hereof use the names "Libra City Corporate Printing", "Libra City Printers", "Libra City Printers (International)", "Libra City (Annual Reports)", "Cityset", "Cityset Communications" or "Cityset Print" or any colourable imitation thereof or any name likely to cause confusion therewith in the minds of members of the public for the purposes of a business similar to or competing with the Business whether by using such name as part of a corporate name or otherwise; -24- 10.1.5 at any time after the date hereof make use of or disclose any secret or confidential information relating to the Company or to the Business which may have been acquired by him in his capacity as a shareholder, officer or employee of the Company; or 10.1.6 at any time after the date hereof do or say anything harmful to the reputation of the Business or which leads or may lead any person, firm or company to cease to do business with the Company on substantially equivalent terms to those previously offered or not to engage in business with the Company, save that nothing contained in this Clause 10.1 shall prevent any of the Warrantors from performing his duties under any service agreement with the Company for so long as such service agreement remains in force. 10.2 Each of the Vendors will provide promptly such information within his knowledge, possession or control as the Purchaser or the Company may reasonably require in relation to the Business or the activities of any person, firm or company competing with the Business. 10.3 Each of the covenants contained in Clause 10.1 shall be a separate covenant by each of the Vendors and shall be enforceable by the Purchaser and by the Company independently of any right to enforce any other covenant or obligation howsoever arising. 10.4 Each of the restrictions contained in Clause 10.1 is considered reasonable by the Parties for the legitimate protection of the Business and goodwill of the Company, but in the event that any such restriction shall be found to be void but would be valid if some part thereof was deleted or the scope, period or area of application were reduced, such restriction shall apply with the deletion of such words or such reduction of scope, period or area of application as may be required to limit such restrictions to what is required for the legitimate protection of such Business and goodwill. 11. POWER OF ATTORNEY 11.1 Each of the Vendors hereby irrevocably and unconditionally appoints the Purchaser or any director of the Purchaser as the Purchaser shall direct as his attorney `with full powers of substitution in his name and on his behalf (and to the -25- complete exclusion of any rights he may have in such regard) lawfully to exercise all voting and other rights and receive all benefits and entitlements which may now or at any time hereafter attach to the Shares of which he is the beneficial owner and to transfer and deal with such Shares and such rights, benefits and entitlements and execute such documents under hand or under seal and do such acts and things in connection with the foregoing as the Purchaser shall from time to time think fit in all respects as if the Purchaser were the absolute legal and beneficial owner thereof. 11.2 Each of the Vendors hereby undertakes to the Purchaser to ratify everything that the Purchaser shall lawfully do or purport to do pursuant to this Clause 11. 12. GUARANTEE OF PURCHASER'S OBLIGATIONS 12.1 The Guarantor hereby guarantees to the Vendors the due performance by the Purchaser (notwithstanding any legal limitation on or incapacity of or other circumstances relating to the Purchaser) of the obligations on the part of the Purchaser in Clause 4.2 of this Deed and if the Purchaser shall make any default in any such obligation the Guarantor will indemnify the Vendors against all losses, damages, costs and expenses which may be incurred by the Vendors by reason of such default. 12.2 The Guarantor hereby acknowledges that it shall not be released by time or indulgence being given to or any arrangements or alterations of terms being made with the Purchasers or by any release or dealing by the Purchaser or by the invalidity of any such undertaking, agreement or other obligation. 12.3 The guarantee and indemnity contained in this Clause 12 shall be a continuing and irrevocable guarantee and indemnity provided always that the Guarantor shall only be obliged to pay to the Vendors up to a maximum aggregate amount of (pound)500,000. 13. WAIVERS 13.1 Each of the Vendors hereby irrevocably waives, for the benefit of the Purchaser and the Company, all and any rights to which he may be entitled in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by the Company or by any present or former officer, employee or adviser of the Company with a -26- view to (a) enabling or inducing such Vendor orVendor (as the case may be) to give the representations, warranties and undertakings set out or referred to in Clause 7 and Schedule 4 or make any statement set out in the Disclosure Letter; or (b) upon which such Vendor or Vendor (as the case may be) may have relied in agreeing to any term of this Deed or making any statement set out in the Disclosure Letter and each Vendor and/or Vendor irrevocably undertakes not to make any claim in respect of any such matter. 13.2 The granting by any Party of any time or indulgence in respect of any breach of any term of this Deed by the other(s) shall not be deemed a waiver of such breach. The waiver by any Party of any breach of any term of this Deed by the other(s) shall not prevent the subsequent enforcement of that term (save to the extent of the express waiver in question) and shall not be cleaned a waiver of any subsequent breach. 13.3 Any date or period mentioned in any Clause of this Deed may be extended by mutual written agreement of the Vendors and the Purchaser, but as regards any date or period (whether or not extended as aforesaid) time shall be of the essence in this Deed (unless the Vendors and Purchaser determine otherwise on agreeing to such extension). 14. POST-COMPLETION OPERATION The provisions of this Deed shall continue in full force and effect and be binding on the Parties in accordance with its terms notwithstanding Completion. 15. COSTS AND WITHHOLDINGS 15.1 Each Party shall bear its own costs of and incidental to the negotiation, making and fulfilment of this Deed and the transactions contemplated hereby. 15.2 All sums payable under this Deed shall be paid free and clear of all deductions or wiithholdings whatsoever save only as may be required by law. If any such deduction or withholding is required by law the Party making the payment shall be obliged to pay such sums as will after deduction or withholding has been made leave the same amount as the receiving Party would have been entitled to receive in the absence of any such requirement to make a deduction or withholding. If any sum payable to the Purchaser under this Deed shall otherwise be subject -27- to Tax in the hands of the Purchaser the same obligation to make an increased payment shall apply n relation to such sums as if it were a deduction or withholding required by law. 16. ASSIGNMENT 16.1 This Deed shall be binding on and enure to the benefit of the personal representatives and estates of the Vendors. 16.2 The Purchaser may assign in whole or in part the benefit of any provision of this Deed to any member of the Purchaser's Group, but otherwise only with the prior written consent of the Vendors such consent not to be unreasonably withheld or delayed. 17. ANNOUNCEMENTS 17.1 Subject to Clause 17.2, no announcement shall be made by any Party relating to the transactions referred to in this Deed and no Party shall disclose to any third party any information concerning the terms or subject matter hereof. 17.2 Any Party may make an announcement or disclose information which would otherwise be required hereunder to be treated as confidential if and to the extent: 17.2.1 required by the law of any relevant jurisdiction; 17.2.2 required by any securities exchange or regulatory or governmental body to which such Party is subject or submits, wherever situated, whether or not the requirement for information has the force of law; 17.2.3 necessary to enable such Party to obtain the full benefit of its rights under this Deed in accordance with the terms hereof; 17.2.4 disclosed on a confidential basis to the professional advisers, auditors and bankers of any Party; 17.2.5 the information has come into the public domain through no fault of that Party; or -28- 17.2.6 the other Parties have given prior written approval to the disclosure, such approval not to be unreasonably withheld or delayed, provided that any such information be disclosed pursuant to Clauses 17.2.1 or 17.2.2 of this Clause shall be disclosed only after consultation with the other Parties. 18. JURISDICTION 18.1 This Deed shall be governed by and construed in accordance with English law. 18.2 The Parties agree that the English courts shall have non exclusive jurisdiction in relation to any dispute arising out of or in respect of this Deed and that any judgment or order of an English court made in this respect shall be conclusive and binding on them and may be enforced against them. Nothing in this Clause 17 limits the rights of the Parties to bring proceedings in any other court of competent jurisdiction or concurrently in more than one jurisdiction. 18.3 Each of the Vendors hereby irrevocably appoints the Vendors' Solicitors as his agent to accept service of notices and legal proceedings in connection with all matters arising out of this Deed and the transactions hereby contemplated. 19. NOTICES 19.1 Save as specifically otherwise provided in this Deed any notice, to be given pursuant to this Deed shall be delivered by hand, sent by prepaid post sent first class (for inland mail) or airmail (for overseas mail) or shall be transmitted by facsimile addressed to the Party to be served in the case of: 19.1.1 a company at its registered office for the time being; and 19.1.2 an individual to the address specified in Schedule 1 or at such other address or number in the United Kingdom as any such Party may from time to time notify the other Parties in writing as being their address for service hereunder. -29- 19.2 Notices delivered by hand shall be deemed served at the time of delivery, notices sent by post shall be deemed served on the second Business Day (for inland mail) or the fifth Business Day (for overseas mail) after the date of posting and any notice sent by facsimile transmission shall be deemed served on the Business Day following the date of transmission. 20. INVALIDITY If any provision of this Deed is held to be invalid or unenforceable. such a provision shall (so far as invalid or unenforceable) be given no effect and shall be deemed to be excluded from this Deed, but without invalidating any of the remaining provisions of this Deed. The Parties shall use all reasonable endeavours to replace the invalid or unenforceable provision by a valid provision, the effect of which is as close as possible to the intended effect of the provision so excluded. 21. FURTHER ASSURANCE 21.1 The Vendors shall do or procure to be done all such further acts or things, and execute or procure the execution of all such other documents as the Purchaser may from time to time reasonably require, whether on or after Completion, for the purpose of giving to the Purchaser the full benefit of all the provisions of this Deed. 21.2 The Vendors shall procure that there is made available to the Purchaser (subject, prior to Completion, to compliance by the Purchaser with the terms of any undertaking as to confidentiality which may have been given or entered into) at such time(s) and place(s) as the Purchaser may reasonably direct all information in the possession or under the control of the Vendors which the Purchaser may from time to time reasonably require. whether before or after Completion, in relation to the business and affairs of the Company. 22. ENTIRE AGREEMENT 22.1 This Deed and the documents referred to herein together with a letter of even date herewith from the Guarantor to Mr Allen and headed "CGT Indemnity" comprise the entire agreement between the Parties relating to the subject matter hereof and each of the Parties -30- acknowledges that he has not entered into this Deed relying upon any representation. statement or agreement, whether oral or in writing made by any other of the Parties other than those expressly incorporated or referred to in this Deed or such documents. 22.2 No variation or amendment of this Deed shall be valid unless it is evidenced in writing, and signed by or on behalf of each of the Parties. 23. COUNTERPARTS This Deed may be executed in any number of counterparts each of which when executed shall constitute an original, but all the counterparts shall together constitute one and the same Deed. AS WITNESS this Deed has been entered into on the date first stated above. -31- -----END PRIVACY-ENHANCED MESSAGE-----