Danka and Cypress Announce $200 Million Investment.

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Nov. 3, 1999--

Danka Business Systems PLC (NASDAQ: DANKY) and The Cypress Group, LLC (Cypress), a New York based private equity firm, today announced that they entered into a definitive agreement whereby equity investment funds managed by Cypress have agreed to invest $200 million in convertible participating preference shares of Danka.

"We are pleased with this recent development in our growth plans and refinancing efforts," commented Larry K. Switzer, Chief Executive Officer of Danka. "We are delighted that Cypress has joined us as a financial partner and believe that their investment in Danka will be instrumental in our future business growth."

James L. Singleton, Vice Chairman of Cypress added, "Larry and the Danka management team have done a terrific job refocusing this business, better positioning it for profitable future growth. We are happy to join them as their financial partner as they move forward with their strategic initiatives."

The new participating shares will be entitled to dividends equal to the greater of 6.5% per annum and ordinary share dividends on an as converted basis. Dividends will be paid in the form of additional participating shares for the first five years. The participating shares will be convertible into ordinary shares at a conversion price of $3.125 per ordinary share (equal to $12.50 per ADS), subject to adjustment in certain circumstances. The participating shares will have voting rights initially corresponding to approximately 21% of the total voting power of Danka's capital stock. The participating shares will be redeemable and convertible under certain circumstances. The participating shares will also have a dividend and liquidation preference over the ordinary shares.

Under the terms of the agreement, Danka will expand its Board of Directors from nine to eleven members. Upon closing of the transaction, two representatives from Cypress will join the Board.

The transaction is subject to various conditions, including approval by Danka's shareholders at an extraordinary general meeting, satisfactory refinancing of Danka's existing bank indebtedness, the absence of a significant decline in Danka's share trading price and receipt of required regulatory approvals in addition to other customary conditions.

The proceeds of the investment will be used to pay Danka's existing bank debt and for general corporate purposes.

Danka Business Systems PLC, headquartered in London, England and St. Petersburg, Florida, is one of the world's largest independent suppliers of office imaging equipment, supplies and services. Danka provides office products and services globally in 30 countries around the world. Danka's Ordinary shares are listed on the London Stock Exchange and its ADSs are listed on NASDAQ. For additional information about Danka's copier, printer and other office imaging products, please visit the Company's web site at www.danka.com.

Cypress is a private equity firm which currently manages more than $3.5 billion of equity capital on behalf of major public and private pension funds, university endowments, trusts and other leading financial institutions. Cypress seeks to invest alongside experienced executives in growth businesses to achieve long term capital appreciation. The Cypress professionals have employed this strategy in numerous other investments such as Infinity Broadcasting Corporation, Lear Corporation, R.P. Scherer Corporation, Cinemark USA, Inc., Williams Scotsman, Inc., Frank's Nursery & Crafts, Inc. and WESCO International, Inc.

Forward-Looking Statements

Certain statements contained in this press release, or otherwise made by officers of Danka (the Company), including statements related to the Company's future business and financial performance, are forward-looking, and contain information relating to the Company that is based on the beliefs of management as well as assumptions, made by, and information currently available to, management. The words "goal", "anticipate", "expect", "believe" and similar expressions as they relate to the Company or the Company's management, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those reflected in the forward-looking statements. The Company claims the protection of the safe harbor for forward-looking statements provided for in the Private Securities Litigation Act of 1995 for such statements. Factors that might cause such differences include, but are not limited to (i) the Company and Cypress' failure to close the contemplated $200 million investment in the Company's participating shares; (ii) failure to obtain necessary consents, approvals or agreements with certain third parties; (iii) failure to obtain shareholder and regulatory approval; (iv) material adverse change in financial markets or the Company, (v) failure to meet any of the conditions of closing the Cypress investment, (vi) a drop in Company's average ADS price of greater than $1.00 (10%) from $10.00 (which is the average price per ADS during the twenty trading days prior to the signing date of the agreement); (vii) failure to obtain a reasonably satisfactory financing commitment from a major financial institution; and (viii) failure to refinance the Company's bank indebtedness on satisfactory terms prior to the July 31, 2000 expiration of waivers with respect to such financing. No assurance can be given that the results in any forward-looking statement will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date they are made. The Company refers readers to the Company's Form 8-K filing with the Securities and Exchange Commissions related to this transaction. The Company undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances that arise after the date such statements are made.