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SUBSEQUENT EVENTS

On March 14, 2012, the Company entered into a stock purchase agreement to acquire Labelgraphics Ltd. based in Glasgow, Scotland. On April 2, 2012, pursuant to the stock purchase agreement, the Company acquired all issued capital shares for $26,400 less net debt. The purchase price includes a future performance based earn out of approximately 25% of the above total.

A preliminary purchase price allocation will be provided in the first quarter of fiscal 2013 Form 10-Q once preliminary fair value appraisals and valuations of assets and liabilities are completed.

The Company is a party to a case styled DLJ South American Partners, L.P. ("DLJ") v. Multi-Color Corporation, et al., Case No. C.A. No. 7417-CS which is pending in the Delaware Court of Chancery. In a complaint filed on April 13, 2012, DLJ alleges that the Company failed to make certain payments required by the Merger and Stock Purchase Agreement (the "Merger Agreement") entered into by the Company with Adhesion Holdings, Inc., a Delaware corporation ("Adhesion"), DLJ, and Diamond Castle Partners IV, L.P., a Delaware limited partnership, ("Diamond Castle"), pursuant to which the Company acquired York Label Group, including CM Holdings Ltd., an exempted company incorporated under the laws of the Cayman Islands (the "Chilean JV"). An affiliate of Diamond Castle has nominated Ari C. Benacerraf and Simon T. Roberts for election to the Board of Directors of the Company at its 2012 Annual Meeting of Shareholders. Mr. Benacerraf and Mr. Roberts are current members of the Company's Board.

A deferred payment of $21,309 was to be paid on April 1, 2012 and of this amount, $2,500 was required to be deposited into an escrow account to satisfy DLJ's indemnification obligations with respect to the transaction. On April 1, 2012, the Company paid DLJ $11,880 and deposited $2,500 into escrow in accordance with the Merger Agreement. The balance due DLJ ($6,929) is subject to dispute as further described below and was placed into a separate escrow account by the Company.

DLJ seeks the payment of $6,939 and interest, legal fees and other equitable relief that the Company is unable to reasonably estimate at this time. On May 18, 2012, the Company filed an answer, counterclaim and third party complaint asserting various causes of action against DLJ, Diamond Castle and affiliated entities arising out of their breaches of the Merger Agreement and other actions.