EXHIBIT 10.2






                                 LEASE AGREEMENT


                                     Between


                                    UTFLA LLC
                                    as Lessor


                                       and


                                    POINT.360
                                    as Lessee


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                                TABLE OF CONTENTS

                                                                          Page

                                    ARTICLE I


Section 1.01.    Lease of Premises; Title and Condition......................1
Section 1.02.    Use.........................................................1
Section 1.03.    Term........................................................1
Section 1.04.    Options To Extend the Term..................................2
Section 1.05.    Rent........................................................2
Section 1.06.    Right of First Refusal......................................4

                              ARTICLE II


Section 2.01.    Maintenance and Repair......................................4
Section 2.02.    Alterations, Replacements and Additions.....................5

                              ARTICLE III


Section 3.01.    Severable Property..........................................5
Section 3.02.    Removal.....................................................5

                              ARTICLE IV


Section 4.01.    Lessee's Assignment and Subletting..........................6
Section 4.02.    Transfer or Pledge by Lessor................................6

                                    ARTICLE V


Section 5.01.    Net Lease...................................................6
Section 5.02.    Taxes and Assessments; Compliance With Law..................7
Section 5.03.    Liens.......................................................9
Section 5.04.    Indemnification.............................................9
Section 5.05.    Permitted Contests..........................................9
Section 5.06.    Environmental Compliance...................................10

                              ARTICLE VI


Section 6.01.    Procedure Upon Purchase....................................12
Section 6.02.    Condemnation and Casualty..................................12
Section 6.03.    Insurance..................................................14

                              ARTICLE VII


Section 7.01.    Conditional Limitations; Default Provisions................16
Section 7.02.    Bankruptcy or Insolvency...................................19
Section 7.03.    Additional Rights of Lessor................................19

                             ARTICLE VIII


Section 8.01.    Notices and Other Instruments..............................21
Section 8.02.    Estoppel Certificates; Financial Information...............22

                                   ARTICLE IX


Section 9.01.    No Merger..................................................23
Section 9.02.    Surrender..................................................23
Section 9.03.    Assumption.................................................23
Section 9.04.    Separability; Binding Effect; Governing Law................23
Section 9.05.    Table of Contents and Headings; Internal References........24
Section 9.06.    Counterparts...............................................24
Section 9.07.    Lessor's Liability.........................................24
Section 9.08.    Amendments and Modifications...............................24
Section 9.09.    Additional Rent............................................24
Section 9.10.    Consent of Lessor..........................................24
Section 9.11.    Options....................................................24
Section 9.12.    Schedules..................................................25
Section 9.13.    Currency...................................................25


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        THIS LEASE  AGREEMENT,  dated as of March,  28, 2006 (this "Lease"),  is
made between UTFLA LLC, a Delaware limited  liability  company  ("Lessor"),  and
POINT.360,  a California  corporation  (herein,  together  with any  corporation
succeeding  thereto  by  consolidation,  merger  or  acquisition  of its  assets
substantially as an entirety, called "Lessee").

                                   ARTICLE I

        Section  1.01.   ....Lease  of  Premises;   Title  and   Condition.   In
consideration  of the  rents  and  covenants  herein  stipulated  to be paid and
performed by Lessee and upon the terms and conditions herein  specified,  Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the premises (the
"Premises") consisting of:

   (a)  that  parcel  of land  located  in Los  Angeles,  California,  having an
        address of 2701 Media  Center Drive and more  particularly  described in
        Schedule A attached hereto and made a part hereof (the "Land");

   (b)  all of the buildings,  structures,  fixtures, facilities,  installations
        and other  improvements  of every kind and  description now or hereafter
        in,  on,  over and  under  the  Land,  all  plumbing,  gas,  electrical,
        ventilating,  lighting  and  other  utility  systems,  ducts,  hot water
        heaters,  oil burners,  domestic water systems,  elevators,  escalators,
        canopies,  air  conditioning  systems and all other building systems and
        fixtures attached to or comprising a part of the buildings but excluding
        all personal property now or hereafter belonging to Lessee and Severable
        Property  (as  defined  in  Section  3.01  hereof)  (collectively,   the
        "Improvements"); and

   (c)  all of  Lessor's  right,  title  and  interest,  if  any,  in and to all
        easements,  rights-of-way,  appurtenances  and other rights and benefits
        associated  with the Land and to all public or private  streets,  roads,
        avenues,  alleys or passways, open or proposed, on or abutting the Land,
        including,  without  limitation,  the  agreements,  if any, set forth in
        Schedule  A (the  "Agreements")  (all of the  foregoing  being  included
        within the term "Land").

        The Premises  are leased to Lessee in their  present  condition  without
representation  or  warranty  by Lessor and  subject to the rights of parties in
possession, to the existing state of title, to all applicable Legal Requirements
(as defined in Section  5.02(b))  now or  hereafter  in effect and to  Permitted
Exceptions  listed in Schedule A. Lessee has  examined the Premises and title to
the Premises and has found all of the same satisfactory for all purposes.

        Section 1.02.  Use.  Lessee may use the Premises for any lawful purpose,
provided  such use shall not diminish the value of the Premises or  constitute a
nuisance.

        Section 1.03. Term. This Lease shall be for an Interim Term beginning as
of the date hereof and ending at midnight on the last day of the month including
the date hereof and a Primary Term of fifteen  (15) years  beginning on April 1,
2006 and ending at midnight on March 31, 2021. The time period during which this
Lease shall actually be in effect,  including the Interim Term, the Primary Term
and any Extended Term (as defined in Section 1.04) for which the right to extend
is  exercised,  as any of the same may be  terminated  prior to their  scheduled
expiration pursuant to the provisions hereof, is sometimes referred to herein as
the "Lease Term."

        Section 1.04. Options To Extend the Term. Unless an Event of Default (as
defined  herein)  has  occurred  and is  continuing  at the time any  option  is
exercised,  Lessee  shall have the right and option to extend the Lease Term for
four (4) additional periods of five (5) years, commencing at midnight on the day
on which the then  existing term of this Lease  expires (the  "Extended  Term"),
unless  this Lease  shall  expire or be  terminated  pursuant  to any  provision
hereof.  Lessee shall,  if at all,  exercise its option to extend the Lease Term
for the  Extended  Term by giving  notice of intent to exercise to Lessor at any
time not more than 18 or less than 15 months prior to the expiration of the then
existing  Lease Term (which  notice of intent will not extend the then  existing
Lease Term,  but shall obligate the parties to begin the  determination  of Fair
Market  Rental (as  defined  herein) for the  Premises  for such  Extended  Term


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pursuant  to  subsection  1.05(e))  and then by  delivering  to Lessor a written
instrument of exercise of option no later than 12 months prior to the expiration
of the then  existing  Lease  Term and  after  the Fair  Market  Rental  for the
Premises for the Extended  Term has been  determined  as provided in  subsection
1.05(e),  provided  that,  if such  Fair  Market  Rental  value  has not been so
determined  at least 20 days prior to the date by which Lessee must deliver such
instrument   of  exercise   Lessee  shall  have  an  additional  30  days  after
determination  thereof within which to make such delivery.  Upon the delivery of
the written  instrument  of exercise  referred to in the  immediately  preceding
sentence, as applicable,  the Lease Term shall be automatically extended for the
Extended Term on the terms and conditions provided herein.

        Section 1.05. Rent.

   (a)  Lessee shall pay, as basic rent for the  Premises,  the  following  (the
        "Basic Rent"):

        (i)    During  the  Interim  Term and the  first  five (5)  years of the
               Primary Term,  Lessee shall pay the amounts set forth in Schedule
               B.

        (ii)   During years six (6) through  fifteen  (15) of the Primary  Term,
               Lessee shall pay the CPI Rentals (as defined below); and

        (iii)  During any  Extended  Term,  Lessee shall pay an amount per annum
               equal to the Fair Market Rental (as hereinafter defined).

   (b)  Basic Rent shall be paid by wire  transfer as directed by Lessor,  or to
        such  other  person as Lessor  from time to time may  designate.  Lessor
        shall  give  Lessee  not less than 30 days'  notice of any change in the
        account  or the  address  to which such  payments  are to be made.  Such
        annual rentals shall be payable in equal monthly installments in advance
        on the first day of each month.  Any rental payment made in respect of a
        period which is less than one month shall be prorated by multiplying the
        then  applicable  monthly rental by a fraction the numerator of which is
        the  number of days in such  month  with  respect to which rent is being
        paid and the  denominator  of which is the total  number of days in such
        month.  Lessee shall perform all its obligations under this Lease at its
        sole cost and expense and shall pay all Basic Rent,  additional rent and
        any other sum due  hereunder  when due and  payable,  without  notice or
        demand.

   (c)  The CPI Rentals,  shall be calculated  pursuant to the following  Rental
        Adjustment Formula:  Beginning with the first day of the sixtieth (60th)
        month after the commencement of the Primary Term and on the first day of
        each twelve (12) months thereafter (such dates each being an "Adjustment
        Date"),  Basic Rent shall be  increased  by an amount equal to the "Rent
        Adjustment." The Rent Adjustment shall be an amount equal to the product
        of (i) the percentage change (the "Percentage Change") between the Price
        Index (as defined  below) for the first month of the Primary Term or the
        Price  Index used for the  immediately  preceding  Adjustment  Date,  as
        applicable  (the  "Base  Month")  and the Price  Index for the month two
        months  prior to the  applicable  Adjustment  Date and (ii)  Basic  Rent
        applicable to the  applicable  Base Month.  "Price Index" shall mean the
        CPIU,  U.S. City Average,  all items (1982-84 = 100), as prepared by the
        U. S.  Bureau  of  Labor  Statistics.  Basic  Rent  shall in no event be
        reduced as a result of the application of the Rental Adjustment  Formula
        described in this Section 1.05. In the event that the Price Index ceases
        to  be  published,   its  successor  index  as  published  by  the  same
        governmental agency which published the Price Index shall be substituted
        and any necessary  reasonable  adjustments  made by Lessor and Lessee in
        order to carry out the intent of this section.  In the event there is no
        successor index, the Lessor shall reasonably select an alternative price
        index that will constitute a reasonable substitute for the Price Index.

   (d)  In no event shall the annual  rental for any Extended  Term be an amount
        less than the rental paid in the final year of the immediately preceding
        Term or Extended  Term.  Such amount  shall be payable in equal  monthly
        installments  in  advance  on the first day of each  month  during  such
        Extended Term.

   (e)  The term  "Fair  Market  Rental"  as used  herein  shall  mean an amount
        equivalent  to the then current fair market rate of rentals  received in
        the general  market area in which the  Premises  are located for similar
        buildings of comparable characteristics,  including, but not limited to,


<PAGE>

        comparable  lease terms,  age,  condition  and  classification,  as such
        rental shall be adjusted by a reasonable  allowance  for  operating  and
        maintenance  costs (not paid  separately  by the lessee under such other
        lease) of a building of comparable characteristics, leasing commissions,
        tenant  improvements  or  allowances  or  other  incentives.   Following
        delivery of the notice of intent  described in Section 1.04 hereof,  the
        Fair Market  Rental  shall be  determined  mutually by Lessor and Lessee
        within 30 days after Lessor's  receipt of Lessee's  notice of intent or,
        if no mutual determination is made, by the following procedure: not more
        than 40 days after Lessor's  receipt of Lessee's  notice of intent,  the
        parties shall  attempt to agree upon an appraiser.  If the parties agree
        upon an  appraiser,  the appraiser so selected  shall  appraise the Fair
        Market Rental value of the Premises within 30 days after  selection.  If
        the parties fail to so agree upon the  selection  of one such  appraiser
        within 40 days  after  Lessor's  receipt of  Lessee's  notice of intent,
        Lessee and Lessor shall each  designate,  within 10 days from the end of
        such 40-day  period,  one appraiser to determine such Fair Market Rental
        value.  In the event either party fails to so select its own  appraiser,
        the other party may obtain court  appointment  of an appraiser.  The two
        appraisers  so  selected  shall  attempt to agree upon such Fair  Market
        Rental  value of the Premises as at the date of said  appraisal.  In the
        event the two appraisers fail to agree upon the Fair Market Rental value
        of the Premises within 90 days after Lessor's receipt of Lessee's notice
        of intent,  the two appraisers  shall meet and select a third  appraiser
        with in 20 days after the expiration of such 90-day period. In the event
        the two appraisers fail to so select a third appraiser, either party may
        obtain court  appointment of such third appraiser.  Within 30 days after
        the third appraiser is selected,  the three appraisers so selected shall
        meet and  attempt to agree  upon such Fair  Market  Rental  value of the
        Premises  as at the  date of said  appraisal.  In the  event  the  three
        appraisers  fail to  agree  upon  the Fair  Market  Rental  value of the
        Premises  within 140 days after Lessor's  receipt of Lessee's  notice of
        intent, the third appraiser shall independently appraise the Fair Market
        Rental  value of the  Premises,  and the  arithmetic  mean of the  three
        appraisals  will be the Fair  Market  Rental.  All  appraisers  shall be
        members  in good  standing  of the  American  Institute  of Real  Estate
        Appraisers or any organization  succeeding thereto and have had not less
        than 10 years' experience with commercial real estate of the type of the
        Premises in the  general  market area where the  Premises  are  located.
        Lessee shall pay the cost of all appraisals.

        Section 1.06. Right of First Refusal. At any time after the first thirty
six (36) months of the Primary  Term if Lessor shall desire to sell the Premises
and shall receive a bona fide written  offer from any third party,  Lessor shall
by written notice to Lessee,  offer to Lessee the right to enter into a contract
for the  purchase  of the  Premises  on the  terms  set  forth in such bona fide
written  offer and Lessee  shall  have 10  business  days after  receipt of such
notice and offer in which to accept in writing such terms and  conditions.  Upon
any  acceptance  of such offer by Lessee,  Lessor and Lessee  shall enter into a
contract  for the  purchase  of the  Premises  upon  the  terms  and  conditions
specified  in the notice from Lessor to Lessee.  In the event that Lessee  shall
fail to accept  the terms and  conditions  of sale by  written  notification  to
Lessor prior to the  expiration  of such  10-business-day  period,  Lessor shall
thereafter  be free to sell the  Premises to any such  unaffiliated  third party
pursuant to the bona fide written offer for a period of eight months.  The right
of first refusal contained in this Section 1.06 shall not apply to a foreclosure
or similar  sale of the  Premises by any holder of a mortgage on the Premises or
to the  granting of a deed in lieu of  foreclosure  by Lessor to such holder and
shall not apply to the  subsequent  sale of the  Premises by a purchaser  of the
Premises at a foreclosure  or a similar sale or by the grantee of a deed in lieu
of foreclosure.

                                   ARTICLE II

        Section 2.01. Maintenance and Repair.

   (a)  Lessee  acknowledges that it has received the Premises in good order and
        repair.  Lessee,  at its own  expense,  will  maintain  all parts of the
        Premises in good repair and  condition and will take all action and will
        make all  structural  and  nonstructural,  foreseen and  unforeseen  and
        ordinary and extraordinary  changes and repairs which may be required to
        keep all parts of the Premises in good repair and condition  (including,
        but not limited to, all painting, glass, utilities,  conduits,  fixtures


<PAGE>

        and  equipment,  foundation,  roof,  exterior  walls,  heating  and  air
        conditioning  systems,  wiring,  plumbing,  sprinkler  systems and other
        utilities,  and all paving,  sidewalks,  roads, parking areas, curbs and
        gutters and fences). Lessor shall not be required to maintain, repair or
        rebuild  all or any part of the  Premises.  Lessee  waives  the right to
        require  Lessor to  maintain,  repair or rebuild  all or any part of the
        Premises or make repairs at the expense of Lessor  pursuant to any Legal
        Requirement, Agreement, contract, covenant, condition or restrictions at
        any time.

   (b)  If all or any part of the Improvements shall encroach upon any property,
        street or right-of-way  adjoining or adjacent to the Premises,  or shall
        violate the Agreements or conditions  affecting the Premises or any part
        thereof,   or  shall   hinder,   obstruct  or  impair  any  easement  or
        right-of-way  to which the Premises are subject,  then,  promptly  after
        written  request  of  Lessor  (unless  such   encroachment,   violation,
        hindrance, obstruction or impairment is a Permitted Exception) or of any
        person so affected,  Lessee  shall,  at its  expense,  either (i) obtain
        valid and effective  waivers or settlements  of all claims,  liabilities
        and damages resulting therefrom or (ii) if Lessor consents thereto, make
        such changes,  including  alteration or removal, to the Improvements and
        take such other action as shall be necessary to remove or eliminate such
        encroachments, violations, hindrances, obstructions or impairments.

        Section 2.02.  Alterations,  Replacements and Additions.  Lessee may, at
its  expense,  make  additions  to  and  alterations  of the  Improvements,  and
construct additional Improvements,  provided that (i) the fair market value, the
utility,  the square  footage or the useful  life of the  Premises  shall not be
lessened thereby, (ii) such work shall be expeditiously  completed in a good and
workmanlike  manner and in compliance with all applicable Legal Requirements and
the requirements of all insurance  policies  required to be maintained by Lessee
hereunder,  (iii) no structural alterations shall be made to the Improvements or
demolitions  conducted in connection therewith unless Lessee shall have obtained
Lessor's  consent and furnished  Lessor with such surety bonds or other security
acceptable  to  Lessor  as shall be  necessary  in  Lessor's  opinion  to assure
rebuilding  of  such  Improvements  and  (iv)  no  additions,   replacements  or
alterations,  other than cosmetic, interior or nonstructural alterations,  which
cost in excess of $50,000 shall be made unless  Lessor's  prior written  consent
shall have been obtained.  Cosmetic,  interior or nonstructural alterations that
cost  $50,000 or less shall not require  Lessor's  prior  written  consent.  All
additions and  alterations  of the Premises,  without  consideration  by Lessor,
shall be and remain part of the Premises and the property of Lessor and shall be
subject to this Lease.

                                  ARTICLE III

        Section 3.01. Severable Property.  Lessee may, at its expense,  install,
assemble  or place on the  Premises  and  remove  and  substitute  any  items of
machinery, equipment, furniture,  furnishings or other personal property used or
useful  in  Lessee's  business  and  trade  fixtures  described  in  Schedule  A
(collectively,  the  "Severable  Property"),  and title to same shall  remain in
Lessee.

        Section 3.02. Removal. Lessee shall remove the Severable Property at the
expiration  or  prior  termination  of this  Lease.  Any of  Lessee's  Severable
Property not removed by Lessee prior to the  expiration  of the Lease or 30 days
after an earlier termination shall be considered  abandoned by Lessee and may be
appropriated,  sold,  destroyed  or  otherwise  disposed  of by  Lessor  without
obligation to account therefor.  Lessee will repair at its expense all damage to
the Premises  necessarily caused by the removal of Lessee's Severable  Property,
whether effected by Lessee or by Lessor.

                                   ARTICLE IV

        Section 4.01.  Lessee's  Assignment and  Subletting.  Unless an Event of
Default shall have occurred and is continuing hereunder, Lessee may, for its own
account,  assign  this Lease or sublet or license  the use of all or any part of
the Premises for the Interim  Term,  the Primary Term or any Extended Term (with
respect to which such  extension has previously  been  exercised) of this Lease.
Each  such  assignment  or  sublease  shall  expressly  be made  subject  to the
provisions  hereof.  No such  assignment  or sublease  shall modify or limit any
right or power of Lessor  hereunder or affect or reduce any obligation of Lessee
hereunder,  and all such obligations shall be those of Lessee and shall continue


<PAGE>

in full effect as  obligations  of a principal and not of a guarantor or surety,
as though no  subletting  or  assignment  had been made,  such  liability of the
Lessee named herein to continue  notwithstanding any subsequent modifications or
amendments of this Lease;  provided,  however,  that (other than with respect to
any modifications  required by law or on account of bankruptcy or insolvency) if
any modification or amendment is made without the consent of Lessee named herein
(which consent shall not be unreasonably withheld or delayed), such modification
or amendment  shall be ineffective as against Lessee named herein to the extent,
and only to the extent,  that the same shall materially increase the obligations
of Lessee,  it being  expressly  agreed that (even if any such  modification  or
amendment shall materially  increase the likelihood of a default by Lessee under
this Lease)  Lessee named herein shall remain  liable to the full extent of this
Lease as if such  modification  had not been  made.  Neither  this Lease nor the
Lease  Term  hereby  demised  shall be  mortgaged  by Lessee,  nor shall  Lessee
mortgage or pledge its  interest in any  sublease of the Premises or the rentals
payable  thereunder.  Any sublease made otherwise than as expressly permitted by
this  Section  4.01 and any  assignment  of  Lessee's  interest  hereunder  made
otherwise than as expressly permitted by this Section 4.01 shall be void. Lessee
shall, within 20 days after the execution of any assignment or sublease, deliver
a conformed copy thereof to Lessor.

        Section  4.02.  Transfer  or Pledge by Lessor.  Lessor  shall be free to
transfer  its fee  interest  in the  Premises  or any part  thereof or  interest
therein,  subject,  however,  to the terms of this Lease. Any such transfer of a
fee interest  shall  relieve the  transferor  of all  liability  and  obligation
hereunder (to the extent of the interest transferred) accruing after the date of
the transfer and any assignee shall be bound by the terms and provisions of this
Lease.  Lessor  shall be free to pledge or mortgage its interest in the Premises
and this Lease on the condition  that either (i) this Lease shall be superior to
such  pledge  or  mortgage  or (ii) if  Lessor  elects  to have  this  Lease  be
subordinate  to  the  mortgage  of any  lender  of  Lessor,  Lessee  receives  a
nondisturbance agreement reasonably acceptable to Lessee from the holder of such
pledge or mortgage.

                                   ARTICLE V

        Section 5.01. Net Lease.

   (a)  It is  expressly  understood  and agreed by and between the parties that
        this Lease is a triple net lease,  and the Basic Rent and all other sums
        payable hereunder to or on behalf of Lessor shall be paid without notice
        or demand  and  without  setoff,  counterclaim,  abatement,  suspension,
        deduction or defense.

   (b)  Except as otherwise  expressly  provided in the Lease,  this Lease shall
        not  terminate,  nor shall Lessee have any right to terminate this Lease
        or be entitled to the  abatement of any rent or any  reduction  thereof,
        nor shall the obligations  hereunder of Lessee be otherwise affected, by
        reason  of any  damage  to or  destruction  of all  or any  part  of the
        Premises from whatever cause,  the taking of the Premises or any portion
        thereof by condemnation  or otherwise,  the  prohibition,  limitation or
        restriction of Lessee's use of the Premises,  or interference  with such
        use by any private person or  corporation,  or by reason of any eviction
        by paramount title or otherwise, or Lessee's acquisition of ownership of
        the Premises  otherwise  than  pursuant to an express  provision of this
        Lease,  or for any other  cause  whether  similar or  dissimilar  to the
        foregoing, any present or future law to the contrary notwithstanding, it
        being the  intention  of the parties  hereto that the rent and all other
        charges payable hereunder to or on behalf of Lessor shall continue to be
        payable in all  events and the  obligations  of Lessee  hereunder  shall
        continue  unaffected,  unless the requirement to pay or perform the same
        shall be  terminated  pursuant  to an express  provision  of this Lease.
        Nothing  contained  in this  Section  5.01  shall be  deemed a waiver by
        Lessee of any rights  that it may have to bring a separate  action  with
        respect to any default by Lessor hereunder or under any other agreement.

   (c)  Lessee  covenants  and agrees that it will remain  obligated  under this
        Lease in  accordance  with its terms,  and that Lessee will not take any
        action to terminate,  rescind or avoid this Lease,  notwithstanding  the
        bankruptcy,  insolvency,   reorganization,   composition,  readjustment,
        liquidation,  dissolution,  winding-up  or  other  proceeding  affecting
        Lessor  or  any   assignee  of  Lessor  in  any  such   proceeding   and
        notwithstanding any action with respect to this Lease which may be taken
        by any trustee or receiver of Lessor or of any assignee of Lessor in any
        such proceeding or by any court in any such proceeding.


<PAGE>

   (d)  Lessee waives all rights now or hereafter  conferred by law (i) to quit,
        terminate or surrender this Lease or the Premises or any part thereof or
        (ii) to any abatement,  suspension,  deferment or reduction of the rent,
        or  any  other  sums  payable  hereunder  to or  on  behalf  of  Lessor,
        regardless of whether such rights shall arise from any present or future
        constitution, statute or rule of law.

        Section 5.02. Taxes and Assessments; Compliance With Law.

   (a)  Lessee  shall pay,  prior to  delinquency:  (i) all taxes,  assessments,
        levies,   fees,  water  and  sewer  rents  and  charges  and  all  other
        governmental charges,  general and special,  ordinary and extraordinary,
        foreseen and  unforeseen,  which are, at any time prior to or during the
        Interim Term,  the Primary Term or any Extended  Term hereof  imposed or
        levied upon or assessed  against or which arise with  respect to (A) the
        Premises,  (B) any Basic  Rent,  additional  rent or other sums  payable
        hereunder,  (C) this Lease or the leasehold estate hereby created or (D)
        the operation,  possession or use of the Premises; (ii) all sales taxes,
        rent taxes,  gross  receipts  taxes or similar taxes (i.e.,  taxes based
        upon  gross  income  which  fail to take into  account  deductions  with
        respect to  depreciation,  interest,  taxes or  ordinary  and  necessary
        business  expenses,  in each case relating to the  Premises)  imposed or
        levied upon, assessed against or measured by any Basic Rent,  additional
        rent or other sums payable  hereunder;  (iii) all sales, value added, ad
        valorem,  use and similar taxes at any time levied,  assessed or payable
        on account of the acquisition, ownership, leasing, operation, possession
        or  use  of  the   Premises;   and  (iv)  all   charges  of   utilities,
        communications  and similar services serving the Premises.  Lessee shall
        not be required to pay any  franchise,  estate,  inheritance,  transfer,
        income,  capital  gains or  similar  tax of  Lessor  unless  such tax is
        imposed,   levied  or  assessed  in  substitution  for  any  other  tax,
        assessment,  charge or levy which  Lessee is required to pay pursuant to
        this Section 5.02(a); provided, however, that if, at any time during the
        Lease  Term,  the method of  taxation  shall be such that there shall be
        assessed,  levied,  charged or imposed on Lessor a capital levy or other
        tax directly on the rents received  therefrom,  or upon the value of the
        Premises or any present or future  improvement  or  improvements  on the
        Premises, then all such levies and taxes or the part thereof so measured
        or based shall be payable by Lessee,  and Lessee shall pay and discharge
        the same as herein  provided.  Lessee will  furnish to Lessor,  promptly
        after demand  therefor,  proof of payment of all items referred to above
        which are payable by Lessee.  If any such assessment may legally be paid
        in installments, Lessee may pay such assessment in installments; in such
        event, Lessee shall be liable only for installments which become due and
        payable  with  respect to any tax period  occurring  in whole or in part
        during  the Lease  Term  hereof;  provided,  however,  that all  amounts
        referred to in this Section  5.02(a) for the fiscal or tax year in which
        the Lease Term shall  expire shall be  apportioned  so that Lessee shall
        pay those  portions  thereof which  correspond  with the portion of such
        year as are within the Lease Term hereby demised.

   (b)  Lessee shall comply with and cause the Premises to comply with and shall
        assume all  obligations  and  liabilities  with respect to (i) all laws,
        ordinances and  regulations  and other  governmental  rules,  orders and
        determinations presently in effect or hereafter enacted, made or issued,
        whether   or   not   presently   contemplated   (collectively,    "Legal
        Requirements"),  applicable to the Premises or the ownership, operation,
        use or possession thereof and (ii) all Agreements,  contracts, insurance
        policies  (including,  without  limitation,  to the extent  necessary to
        prevent  cancellation  thereof and to insure full  payment of any claims
        made  under  such  policies),  agreements,   covenants,  conditions  and
        restrictions  now  or  hereafter  applicable  to  the  Premises  or  the
        ownership,  operation,  use or possession  thereof,  including,  but not
        limited  to,  all  such  Legal  Requirements,   contracts,   agreements,
        covenants,   conditions  and  restrictions  which  require   structural,
        unforeseen or  extraordinary  changes;  provided,  however,  that,  with
        respect to any of the  obligations  of Lessee in clause (ii) above which
        are not now in  existence,  Lessee  shall not be  required  to so comply
        unless Lessee is either a party thereto or has given its written consent
        thereto,  or unless  the same is  occasioned  by Legal  Requirements  or
        Lessee's  default  (including  any failure or omission by Lessee)  under
        this Lease. Nothing in clause (ii) of the immediately preceding sentence
        shall modify the obligations of Lessee under Section 5.04 of this Lease.


<PAGE>

   (c)  Upon the  occurrence  of an Event of Default (as defined  herein)  under
        Section  7.01(a)(i)(1)  or if required by  Lessor's  mortgagee,  if any,
        Lessee shall, in addition to and concurrently  with the payment of Basic
        Rent as required in subsection  1.05(a)  hereof,  pay one-twelfth of the
        amount (as  estimated  by Lessor)  of the annual  taxes and  assessments
        described  in  subsection  5.02(a)  hereof and the annual  premiums  for
        insurance  required in Section 6.03 hereof next becoming due and payable
        with  respect to the  Premises,  and Lessee  shall also pay to Lessor on
        demand therefor the amount by which the actual taxes and assessments and
        insurance  premiums  exceed  the  payment  by  Lessee  required  in this
        subsection.  Any remaining  funds held by Lessor at the end of the Lease
        Term shall be returned to Lessee.

        Section 5.03. Liens. Lessee will remove and discharge any charge,  lien,
security  interest  or  encumbrance  upon the  Premises  or upon any Basic Rent,
additional  rent or other sums  payable  hereunder  which arises for any reason,
including, without limitation, all liens which arise out of the possession, use,
occupancy,  construction,  repair or  rebuilding of the Premises or by reason of
labor or materials  furnished or claimed to have been furnished to Lessee or for
the  Premises,  but not including  (i) the liens and  encumbrances  set forth in
Schedule A, (ii) this Lease and any assignment hereof or any sublease  permitted
hereunder and (iii) any mortgage, charge, lien, security interest or encumbrance
created or caused by Lessor or its agents,  employees or representatives without
the consent of Lessee. Lessee may provide a bond or other security acceptable to
Lessor to remove or pay all costs  associated with the removal of any such lien,
provided the conditions of Section 5.05 shall be satisfied. Nothing contained in
this Lease shall be construed as constituting  the consent or request of Lessor,
express or implied,  to or for the  performance (on behalf of or for the benefit
of Lessor) by any contractor,  laborer,  materialman or vendor,  of any labor or
services  or  for  the  furnishing  of  any  materials  for  any   construction,
alteration,  addition,  repair or  demolition  of or to the Premises or any part
thereof.  Notice is hereby  given that  Lessor will not be liable for any labor,
services or  materials  furnished  or to be  furnished  to Lessee,  or to anyone
holding an interest in the Premises or any part thereof through or under Lessee,
and that no mechanic's or other liens for any such labor,  services or materials
shall attach to or affect the interest of Lessor in and to the Premises.

        Section 5.04.  Indemnification.  Except for the gross  negligence or the
willful  misconduct of any Indemnified  Party (as defined herein),  Lessee shall
defend all actions against Lessor the holder of any mortgage on the Premises and
any partner, officer, director, member, employee or shareholder of the foregoing
(individually, an "Indemnified Party", and collectively, "Indemnified Parties"),
with  respect  to, and shall  pay,  protect,  indemnify  and save  harmless  the
Indemnified Parties from and against, any and all liabilities,  losses, damages,
costs, expenses (including,  without limitation,  reasonable attorneys' fees and
expenses),  causes of action, suits, claims,  demands or judgments of any nature
arising  from (i)  injury  to or death of any  person,  or  damage to or loss of
property, on the Premises or any adjoining sidewalk, streets or right of ways or
connected with the use,  condition or occupancy of the Premises,  (ii) violation
by Lessee of this  Lease,  (iii) use,  act or  omission of Lessee or its agents,
contractors,  licensees,  sublessees or invitees and (iv) contest referred to in
Section 5.05 of this Lease.

        Section 5.05.  Permitted Contests.  Lessee, at its expense, may contest,
by appropriate legal proceedings conducted in good faith and with due diligence,
any Legal  Requirement  with which  Lessee is  required  to comply  pursuant  to
Section 5.02(b), or the amount or validity or application,  in whole or in part,
of any tax,  assessment  or charge which Lessee is obligated to pay or any lien,
encumbrance or charge not permitted by Sections 2.01,  2.02,  5.02(a),  5.03 and
6.02,  provided that (i) the commencement of such proceedings  shall suspend the
enforcement or collection thereof against or from Lessor and against or from the
Premises,  (ii) neither the Premises nor any rent therefrom nor any part thereof
or interest therein would be in any danger of being sold, forfeited, attached or
lost,  (iii)  Lessee  shall have  furnished  such  security,  if any,  as may be
required in the proceedings  and as may be required by Lessor,  and (iv) if such
contest be finally resolved against Lessee, Lessee shall promptly pay the amount
required to be paid,  together with all interest and penalties  accrued thereon.
Lessor,  at  Lessee's  expense,   shall  execute  and  deliver  to  Lessee  such
authorizations  and other  documents as  reasonably  may be required in any such
contest.  Lessee shall  indemnify and save Lessor  harmless  against any cost or
expense of any kind that may be imposed upon Lessor in connection  with any such
contest  and any  loss  resulting  therefrom.  Lessee  shall  not be in  default
hereunder in respect to the  compliance  with any Legal  Requirement  with which
Lessee is obligated to comply  pursuant to Section  5.02(b) or in respect to the
payment of any tax, assessment or charge which Lessee is obligated to pay or any
lien,  encumbrance or charge not permitted by Section 2.01, 2.02, 5.02(a),  5.03
and 6.02 which Lessee is in good faith contesting.


<PAGE>

        Section 5.06. Environmental Compliance.

   (a)  For purposes of this Lease:

        (i)    the term "Environmental Laws" shall mean and include the Resource
               Conservation  and Recovery  Act, as amended by the  Hazardous and
               Solid Waste Amendments of 1984, the  Comprehensive  Environmental
               Response, Compensation and Liability Act, the Hazardous Materials
               Transportation Act, the Toxic Substances Control Act, the Federal
               Insecticide,  Fungicide and  Rodenticide  Act and all  applicable
               state   and  local   environmental   laws,   ordinances,   rules,
               requirements,   regulations  and  publications,  as  any  of  the
               foregoing  may  have  been or may be from  time to time  amended,
               supplemented  or supplanted and any and all other federal,  state
               or local laws, ordinances,  rules, requirements,  regulations and
               publications,   now  or  hereafter  existing,   relating  to  the
               preservation  or  regulation  of the  public  health,  welfare or
               environment  or the  regulation  or control of toxic or hazardous
               substances or materials; and

        (ii)   the term "Regulated  Substance"  shall mean and include any, each
               and  all  substances  or  materials  now or  hereafter  regulated
               pursuant to any Environmental  Laws,  including,  but not limited
               to, any such substance or material now or hereafter defined as or
               deemed to be a  "regulated  substance,"  "pesticide,"  "hazardous
               substance"  or  "hazardous  waste" or  included in any similar or
               like classification or categorization thereunder.

   (b)  Lessee shall:

        (i)    not cause or permit any Regulated  Substance to be placed,  held,
               located,  released,  transported or disposed of on, under,  at or
               from the Premises in violation of Environmental Laws;

        (ii)   contain at or remove  from the  Premises,  or  perform  any other
               necessary remedial action regarding,  any Regulated  Substance in
               any way affecting the Premises if, as and when such  containment,
               removal  or other  remedial  action is  required  under any Legal
               Requirement  and,  whether or not so required,  shall perform any
               containment,  removal or  remediation  of any kind  involving any
               Regulated  Substance in any way adversely  affecting the Premises
               in compliance  with all Legal  Requirements  and, upon reasonable
               request of Lessor after  consultation  with Lessee (which request
               may  be  given  only  if  Lessor  reasonably   believes  that  an
               environmental  concern exists which may have an adverse effect on
               the Premises), shall arrange for phase I environmental audits (as
               such  term  is  defined  now or  hereafter  by the  environmental
               remediation  industry),  or such  other  or  further  testing  or
               actions as may be  required  by Legal  Requirements  or as may be
               mutually  agreed to by Lessor and Lessee,  to be conducted at the
               Premises by qualified  companies retained by Lessee  specializing
               in environmental matters and reasonably satisfactory to Lessor in
               order to ascertain compliance with all Legal Requirements and the
               requirements  of  this  Lease,  all  of  the  foregoing  to be at
               Lessee's  sole  cost  and  expense.   Further,  if  the  cost  of
               performing any of the foregoing activities shall exceed $100,000,
               Lessee  shall,  upon the  reasonable  request of Lessor,  provide
               Lessor  with a bond or letter of  credit,  in form and  substance
               satisfactory  to  Lessor,  in an amount  sufficient  to cover the
               aggregate of the foregoing costs;

        (iii)  provide  Lessor  with  written  notice  (and  a  copy  as  may be
               applicable)  of any of the  following  within 10 days of  receipt
               thereof:  (A) Lessee's obtaining  knowledge or notice of any kind
               of the material presence, or any actual or threatened release, of
               any  Regulated  Substance  in any  way  adversely  affecting  the
               Premises;  (B)  Lessee's  receipt  or  submission,   or  Lessee's
               obtaining  knowledge  or  notice  of any  kind,  of  any  report,
               citation,  notice or other  communication from or to any federal,
               state  or  local  governmental  or  quasi-governmental  authority
               regarding any Regulated  Substance in any way adversely affecting
               the Premises;  or (C) Lessee's  obtaining  knowledge or notice of
               any kind of the incurrence of any cost or expense by any federal,
               state or local  governmental or  quasi-governmental  authority or


<PAGE>

               any private party in connection with the assessment,  monitoring,
               containment,  removal or remediation of any kind of any Regulated
               Substance in any way adversely affecting the Premises,  or of the
               filing or  recording  of any lien on the  Premises or any portion
               thereof in connection with any such action or Regulated Substance
               in any way adversely affecting the Premises; and

        (iv)   in addition to the  requirements  of Section 5.04 hereof,  defend
               all actions  against the  Indemnified  Parties and pay,  protect,
               indemnify  and save  harmless  the  Indemnified  Parties from and
               against any and all liabilities, losses, damages, costs, expenses
               (including,  without limitation,  reasonable  attorneys' fees and
               expenses),  causes of action, suits, claims, demands or judgments
               of any  nature  relating  to any  Environmental  Laws,  Regulated
               Substances  or  other   environmental   matters   concerning  the
               Premises.  The  indemnity  contained  in this  Section 5.06 shall
               survive the expiration or earlier termination of this Lease.

                                   ARTICLE VI

        Section 6.01. Procedure Upon Purchase.

   (a)  If Lessee shall  purchase the Premises  pursuant to Section 6.02 of this
        Lease,  Lessor  shall  convey or cause to be conveyed  title  thereto by
        special  warranty deed, and subject only to this Lease,  the lien of any
        taxes, exceptions subject to which the Premises were conveyed to Lessor,
        exceptions  created or  consented to or existing by reason of any action
        or inaction by Lessee and all Legal  Requirements,  except  Lessor shall
        satisfy any mortgage imposed on the Premises by Lessor.

   (b)  Upon the date fixed for any purchase of the Premises pursuant to Section
        6.02 of this  Lease,  Lessee  shall pay to  Lessor  the  purchase  price
        therefor specified herein in immediately  available funds, together with
        all Basic  Rent,  additional  rent and other  sums then due and  payable
        hereunder to and  including  such date of  purchase,  and there shall be
        delivered to Lessee a special warranty deed, or its equivalent, or other
        conveyance  of the  interests in the Premises  then being sold to Lessee
        and  any  other  instruments   reasonably   necessary  to  evidence  the
        conveyance of title thereto  described in Section  6.01(a) and to assign
        any other  property  then  required to be  assigned  by Lessor  pursuant
        hereto.

   (c)  There shall be no adjustments  at the closing of a purchase  pursuant to
        this  Section  6.01.  Lessee  shall  pay all  charges  incident  to such
        conveyance and assignment,  including,  without  limitation,  reasonable
        counsel fees, escrow fees,  recording fees, title insurance premiums and
        all applicable transfer taxes (not including any income, capital gain or
        franchise  taxes of  Lessor)  which  may be  imposed  by  reason of such
        conveyance  and  assignment  and the delivery of said deed or conveyance
        and other instruments. Upon the completion of any purchase of the entire
        Premises (but not of any lesser  interest than the entire  Premises) but
        not prior thereto (whether or not any delay or failure in the completion
        of such  purchase  shall  be the  fault of  Lessor),  this  Lease  shall
        terminate,  except with respect to obligations and liabilities of Lessee
        hereunder,  actual or contingent,  which have arisen on or prior to such
        completion of purchase.

        Section 6.02. Condemnation and Casualty.

   (a)  General Provisions. Except as provided in Section 6.02(b), Lessee hereby
        irrevocably  assigns  to Lessor  any award,  compensation  or  insurance
        payment  to which  Lessee  may  become  entitled  by reason of  Lessee's
        interest  in the  Premises  (i) if the  use,  occupancy  or title of the
        Premises or any part thereof is taken,  requisitioned  or sold in, by or
        on account of any actual or  threatened  eminent  domain  proceeding  or
        other  action  by  any  person  having  the  power  of  eminent   domain
        ("Condemnation")  or (ii) if the Premises or any part thereof is damaged
        or destroyed by fire, flood or other casualty ("Casualty").  All awards,
        compensations  and insurance  payments on account of any Condemnation or
        Casualty  are  herein  collectively  called  "Compensation."  Lessor may
        appear in any such  proceeding  or action to  negotiate,  prosecute  and
        adjust any claim for any Compensation, and Lessor shall collect any such


<PAGE>

        Compensation.  Lessee  shall  be  entitled  to  participate  in any such
        proceeding,  action, negotiation,  prosecution,  appeal or adjustment as
        contemplated herein.  Notwithstanding anything to the contrary contained
        in this Article VI, if permissible  under  applicable  law, any separate
        Compensation  made to Lessee  for its moving  and  relocation  expenses,
        anticipated  loss of business  profits,  loss of  goodwill or  fixtures,
        additions  (approved  by Lessor)  and  equipment  paid for by Lessee and
        which are not part of the Premises (including,  without limitation,  the
        Severable  Property)  or any other  claim  that  Lessee  may have  under
        applicable  law that does not diminish the  Compensation  made to Lessor
        shall be paid directly to and shall be retained by Lessee (and shall not
        be deemed  to be  "Compensation").  All  Compensation  shall be  applied
        pursuant  to this  Section  6.02,  and all such  Compensation  (less the
        expense  of  collecting  such  Compensation)  is herein  called the "Net
        Proceeds."

   (b)  Substantial  Condemnation.  If more than 10% of the approximately 64,000
        square foot  building or more than 25% of that  portion of the  Premises
        not occupied by such building is taken by Condemnation, Lessee, may, not
        later  than  60 days  after a  determination  has  been  made as to when
        possession  of the  Premises  must be  delivered  with  respect  to such
        Condemnation,  deliver to Lessor (i) notice of its intention ("Notice of
        Intention")  to  terminate  this Lease on the next rental  payment  date
        which  occurs not less than 60 days after the  delivery  of such  notice
        (the  "Condemnation  Termination  Date") and (ii)  documentation  to the
        effect that  termination  of this Lease will not be in  violation of any
        agreement in effect as of the  Condemnation  Termination Date with which
        Lessee is obligated to comply pursuant to this Lease. If Lessee delivers
        the Notice of Intention in a timely manner,  this Lease shall  terminate
        on the Condemnation Termination Date, except with respect to obligations
        and liabilities of Lessee  hereunder,  actual or contingent,  which have
        arisen on or prior to the Condemnation Termination Date, upon payment by
        Lessee of all Basic Rent, additional rent and other sums due and payable
        hereunder to and including the  Condemnation  Termination  Date, and the
        Net  Proceeds  shall  belong to  Lessor.  In the event  Lessee  does not
        deliver the Notice of Intention to Lessor within the timeframe  required
        herein,  this  Lease  shall  remain in full  force and effect and Lessor
        shall  permit  so much of the Net  Proceeds  as may be  necessary  to be
        utilized by Lessee to repair or restore the Premises.

   (c)  Substantial  Casualty  During the Last Two Years of the Primary  Term or
        Any Extended Term. If an insured Casualty shall, in Lessee's  good-faith
        judgment, affect all or a substantial portion of the Premises during the
        last two years of the Primary  Term or an  Extended  Term,  if any,  and
        shall render the Premises  unsuitable for  restoration for continued use
        and occupancy in Lessee's business,  then Lessee may, not later than 150
        days after such Casualty,  deliver to Lessor (i) notice of its intention
        to terminate this Lease on the next rental payment date which occurs not
        less than 60 days  after the  delivery  of such  notice  (the  "Casualty
        Termination  Date"),  (ii) a  certificate  of an  authorized  officer of
        Lessee  describing the event giving rise to such termination and stating
        that Lessee has determined  that such Casualty has rendered the Premises
        unsuitable for  restoration  for continued use and occupancy in Lessee's
        business, and (iii) documentation to the effect that termination of this
        Lease will not be in  violation  of any  agreement  then in effect  with
        which Lessee is obligated to comply pursuant to this Lease. Upon payment
        by Lessee of all Basic Rent, additional rent and other sums then due and
        payable  hereunder to and including the Casualty  Termination Date, this
        Lease  shall  terminate  on the  Casualty  Termination  Date except with
        respect to obligations  and liabilities of Lessee  hereunder,  actual or
        contingent,  which have arisen on or prior to the  Casualty  Termination
        Date, and the Net Proceeds shall belong to Lessor.

   (d)  Less Than  Substantial  Condemnation  or Any Casualty During the Interim
        Term or the Primary Term. If, after a Condemnation  or Casualty,  Lessee
        does not give or does not have the right to give notice of its intention
        to terminate  this Lease as provided in subsection  6.02(b) or (c), then
        this Lease shall continue in full force and effect and Lessee shall,  at
        its expense,  rebuild, replace or repair the Premises in conformity with
        the requirements of Subsections 2.01, 2.02 and 5.03 so as to restore the
        Premises (in the case of Condemnation,  as nearly as practicable) to the
        condition,  and character thereof  immediately prior to such Casualty or
        Condemnation.  To the  extent  the  Net  Proceeds  with  respect  to any


<PAGE>

        Casualty are less than  $50,000,  such amount shall be paid to Lessee to
        be used to  rebuild,  replace or repair the  Premises in a lien free and
        good and  workmanlike  manner.  To the extent the Net Proceeds  from any
        Casualty  are  $50,000  or  greater,   prior  to  any  such  rebuilding,
        replacement or repair,  Lessee shall  determine the maximum cost thereof
        (the  "Restoration  Cost"),  which amount shall be acceptable to Lessor.
        The  Restoration  Cost shall be paid first out of Lessee's  own funds to
        the extent that the Restoration Cost exceeds the Net Proceeds payable in
        connection  with  respect to any  occurrence,  after  which  expenditure
        Lessee shall be entitled to receive the Net  Proceeds,  but only against
        (i) certificates of Lessee delivered to Lessor from time to time as such
        work  of  rebuilding,  replacement  and  repair  progresses,  each  such
        certificate  describing the work for which Lessee is requesting  payment
        and the cost incurred by Lessee in connection therewith and stating that
        Lessee has not theretofore  received payment for such work and (ii) such
        additional  documentation as Lessor may reasonably  require,  including,
        but not limited to, copies of all contracts and subcontracts relating to
        restoration,  architects' certifications,  title policy updates and lien
        waivers or releases.  Any Net Proceeds remaining after final payment has
        been made for such work and after  Lessee  has been  reimbursed  for any
        portions it contributed to the Restoration Cost shall be paid to Lessee.
        In the event of any temporary  Condemnation,  this Lease shall remain in
        full effect and Lessee  shall be  entitled  to receive the Net  Proceeds
        allocable to such temporary Condemnation, except that any portion of the
        Net Proceeds  allocable to the period after the  expiration of the Lease
        Term or termination of the Lease shall be paid to Lessor. If the cost of
        any  rebuilding,  replacement  or repair  required  to be made by Lessee
        pursuant to this subsection  6.02(d) shall exceed the amount of such Net
        Proceeds, the deficiency shall be paid by Lessee.

        Section 6.03. Insurance.

   (a)  Lessee will maintain insurance on the Premises of the
                  following character:

        (i)    Insurance  against all risks of direct  physical loss,  including
               loss by fire,  lightning,  and other  risks which at the time are
               included  under  "extended  coverage"  endorsements,  in  amounts
               sufficient to prevent Lessor and Lessee from becoming a coinsurer
               of any loss but in any event in amounts not less than 100% of the
               actual  replacement  value  of  the  Improvements,  exclusive  of
               foundations  and  excavations   with  a  maximum   deductible  of
               $100,000;

        (ii)   General public  liability  insurance  and/or  umbrella  liability
               insurance  against  claims for bodily  injury,  death or property
               damage  occurring  on, in or about the  Premises  in the  minimum
               amounts  of  $5,000,000  for  bodily  injury  or death to any one
               person,  $10,000,000  for any one  accident  and  $5,000,000  for
               property  damage to others or in such greater amounts as are then
               customary for property similar in use to the Premises;

        (iii)  Rent  loss  or  business  interruption  insurance  in  an  amount
               sufficient  to cover loss of rents from the Premises  pursuant to
               this Lease for a period of at least one year;

        (iv)   Worker's  compensation  insurance (including employers' liability
               insurance,  if requested by Lessor) to the extent required by the
               law of the state in which the  Premises  are  located  and to the
               extent  necessary  to  protect  Lessor and the  Premises  against
               Lessee's workers' compensation claims (to the extent permitted by
               applicable law,  Lessee may self-insure  with respect to worker's
               compensation insurance);

        (v)    Boiler and  machinery  insurance  in respect of any  boilers  and
               similar  apparatus  located on the Premises in the minimum amount
               of $500,000 or in such greater  amounts as to  adequately  insure
               the Premises;

        (vi)   During any period of construction on the Premises, builder's risk
               insurance on a completed value, non-reporting basis for the total
               cost of such alterations or improvements, and worker compensation
               insurance as required by  applicable  law.  This  coverage may be
               provided  by Lessee's  all risk  property  insurance  pursuant to
               Section 6.03(i) herein; and


<PAGE>

        (vii)  Such other  insurance in such amounts and against such risks,  as
               is commonly  obtained  in the case of property  similar in use to
               the  Premises  and located in the state in which the Premises are
               located by prudent  owners of such  property,  including  but not
               limited to, flood insurance (if the Premises is in a flood plain)
               and earthquake insurance.

        Such insurance  shall be written by companies  authorized to do business
in the state where the Premises are located and carrying a claims paying ability
rating of at least AA by Standard & Poor's  Ratings Group and with the exception
of workers'  compensation  insurance and employer's liability  insurance,  shall
name Lessor as an additional insured as its interest may appear. If the Premises
or any part  thereof  shall be  damaged or  destroyed  by  Casualty,  and if the
estimated  cost of  rebuilding,  replacing  or  repairing  the same shall exceed
$50,000, Lessee promptly shall notify Lessor thereof.

   (b)  Every such policy  listed above  (other than any  workers'  compensation
        policy  and  employer's  liability  insurance)  shall  bear a  mortgagee
        endorsement  in favor of the  mortgagee or  beneficiary  (whether one or
        more, the  "Mortgagee")  under each  mortgage,  deed of trust or similar
        security  instrument  creating a lien on the  interest  of Lessor in the
        Premises  (whether one or more, the "Mortgage"),  and any loss under any
        such policy shall be payable to the Mortgagee, which has a first lien on
        such  interest (if there is more than one first  Mortgagee,  then to the
        trustee for such  Mortgagees) to be held and applied by Mortgagee toward
        restoration  pursuant  to Section  6.02.  Every  policy  referred  to in
        subsection  6.03(a)  shall  provide  that it will  not be  cancelled  or
        amended except after 30 days' written notice to Lessor and the Mortgagee
        and that it shall not be invalidated by any act or negligence of Lessor,
        Lessee or any person or entity having an interest in the  Premises,  nor
        by occupancy or use of the Premises  for purposes  more  hazardous  than
        permitted by such policy,  nor by any  foreclosure or other  proceedings
        relating to the Premises,  nor by change in title to or ownership of the
        Premises.

   (c)  Lessee shall deliver to Lessor and Mortgagee  upon request (i) copies of
        the  applicable  insurance  policies  and  (ii)  original  or  duplicate
        certificates   of  insurance,   satisfactory  to  Lessor  and  Mortgagee
        evidencing  the  existence  of all  insurance  which is  required  to be
        maintained  by Lessee  hereunder  and payment of all premiums  therefor,
        such delivery to be made (i) upon the execution and delivery  hereof and
        (ii) at least 10 days  prior to the  expiration  of any such  insurance.
        Lessee shall not obtain or carry separate  insurance  concurrent in form
        or  contributing in the event of loss with that required by this Section
        6.03 unless  Lessor is named an  additional  insured  therein and unless
        there is a mortgagee endorsement in favor of Mortgagee with loss payable
        as provided herein.  Lessee shall immediately notify Lessor whenever any
        such  separate  insurance  is obtained  and shall  deliver to Lessor and
        Mortgagee  the  policies  or  certificates   evidencing  the  same.  Any
        insurance  required  hereunder may be provided  under blanket  policies,
        provided that the Premises are specified therein.

   (d)  The  requirements  of this Section 6.03 shall not be construed to negate
        or modify Lessee's obligations under Section 5.04.

                                  ARTICLE VII

        Section 7.01. Conditional Limitations; Default Provisions.

(a)      Any of the following occurrences or acts shall constitute an Event of
         Default under this Lease:

        (i)    If Lessee shall (1) fail to pay any Basic Rent,  additional  rent
               or other sum as and when required to be paid by Lessee  hereunder
               or (2) fail to observe or perform any other provision  hereof and
               such nonmonetary failure shall continue for 30 days after written
               notice to Lessee of such failure  (provided  that, in the case of
               any such  failure  which  cannot be cured by the payment of money
               and cannot with diligence be cured within such 30-day period,  if
               Lessee shall  commence  promptly to cure the same and  thereafter
               prosecute  the curing  thereof  with  diligence,  the time within
               which such failure may be cured shall be extended for such period
               not to exceed 180 days as is  necessary  to  complete  the curing
               thereof with diligence);


<PAGE>

        (ii)   If any  representation  or  warranty  of Lessee  set forth in any
               certificate  provided by Lessee  pursuant  to this  Lease,  shall
               prove to be incorrect in any material  adverse  respect as of the
               time  when the same  shall  have been  made in a way  adverse  to
               Lessor and Lessor  shall  suffer a loss or  detriment as a result
               thereof, including,  without limitation, the taking of any action
               (including,  without  limitation,  the demise of the  Premises to
               Lessee herein) in reliance upon such  representation  or warranty
               and,  in each  case,  the  facts  shall not be  conformed  to the
               representation  and  warranty  as  soon  as  practicable  in  the
               circumstances  (but in no event to exceed 30 days) after  written
               notice  to  Lessee  from  Lessor of such  inaccuracy  and  Lessor
               restored  to  the   position  it  would  have  enjoyed  had  such
               representation or warranty been accurate at the time it was made;

        (iii)  If  Lessee   shall  file  a  petition   in   bankruptcy   or  for
               reorganization  or for an arrangement  pursuant to any federal or
               state law or shall be adjudicated a bankrupt or become  insolvent
               or shall make an assignment for the benefit of creditors, or if a
               petition  proposing the  adjudication  of Lessee as a bankrupt or
               its  reorganization  pursuant to any federal or state  bankruptcy
               law or any  similar  federal  or state  law shall be filed in any
               court and  Lessee  shall  consent to or  acquiesce  in the filing
               thereof or such petition shall not be discharged or denied within
               90 days after the filing thereof;

        (iv)   If a receiver,  trustee or  conservator  of Lessee,  or of all or
               substantially  all of the assets of Lessee, or of the Premises or
               Lessee's  estate  therein  shall be appointed  in any  proceeding
               brought  by  Lessee,   or  if  any  such  receiver,   trustee  or
               conservator shall be appointed in any proceeding  brought against
               Lessee  and shall not be  discharged  within 90 days  after  such
               appointment,  or if Lessee shall  consent to or acquiesce in such
               appointment;

        (v)    If the Premises  shall have been  abandoned and not maintained or
               secured  in the  manner  required  hereunder  for a period  of 30
               consecutive  days  after  written  notice of such from  Lessor to
               Lessee.

   (b)  If an Event of Default  shall have  happened and be  continuing,  Lessor
        shall have the right to give Lessee  notice of Lessor's  termination  of
        the Lease Term.  Upon the giving of such notice,  the Lease Term and the
        estate  hereby  granted shall expire and terminate on such date as fully
        and  completely  and with the same  effect as if such date were the date
        herein  fixed for the  expiration  of the Lease Term,  and all rights of
        Lessee  hereunder  shall expire and  terminate,  but Lessee shall remain
        liable as hereinafter provided.

   (c)  If an Event of Default  shall have  happened and be  continuing,  Lessor
        shall have the immediate right, whether or not the Lease Term shall have
        been terminated pursuant to subsection 7.01(b), to reenter and repossess
        the Premises  and the right to remove all persons and property  (subject
        to Section  3.02)  therefrom  by summary  proceedings,  ejectment or any
        other  legal  action or in any lawful  manner  Lessor  determines  to be
        necessary or desirable.  Lessor shall be under no liability by reason of
        any such reentry, repossession or removal. No such reentry, repossession
        or removal  shall be construed as an election by Lessor to terminate the
        Lease  Term  unless  a notice  of such  termination  is given to  Lessee
        pursuant to subsection  7.01(b) or unless such termination is decreed by
        a court.

   (d)  At any  time or  from  time to time  after a  reentry,  repossession  or
        removal  pursuant to subsection  7.01(c),  whether or not the Lease Term
        shall have been  terminated  pursuant to subsection  7.01(b)  Lessor may
        (but  shall be under no  obligation  to),  relet  the  Premises  for the
        account of Lessee, in the name of Lessee or Lessor or otherwise, without
        notice to Lessee,  for such term or terms and on such conditions and for
        such uses as Lessor, in its absolute discretion,  may determine.  Lessor
        may collect any rents payable by reason of such reletting.  Lessor shall
        not be liable for any  failure to relet the  Premises or for any failure
        to collect any rent due upon any such reletting.


<PAGE>

   (e)  No  expiration or  termination  of the Lease Term pursuant to subsection
        7.01(b), by operation of law or otherwise, and no reentry,  repossession
        or removal pursuant to subsection 7.01(c) or otherwise, and no reletting
        of the  Premises  pursuant to  subsection  7.01(d) or  otherwise,  shall
        relieve Lessee of its  liabilities  and  obligations  hereunder,  all of
        which shall survive such expiration, termination, reentry, repossession,
        removal or reletting.

   (f)  In the event of any  expiration  or  termination  of the  Lease  Term or
        reentry  or  repossession  of the  Premises  or  removal  of  persons or
        property  therefrom by reason of the  occurrence of an Event of Default,
        Lessee  shall pay to Lessor all Basic  Rent,  additional  rent and other
        sums  required to be paid by Lessee,  in each case to and  including the
        date of such expiration,  termination, reentry, repossession or removal,
        and, thereafter, Lessee shall, until the end of what would have been the
        Lease Term in the  absence  of such  expiration,  termination,  reentry,
        repossession  or removal and whether or not the Premises shall have been
        relet,  be liable to Lessor for, and shall pay to Lessor,  as liquidated
        and agreed current damages:  (i) all Basic Rent, all additional rent and
        other  sums  which  would be  payable  under this Lease by Lessee in the
        absence of any such expiration,  termination,  reentry,  repossession or
        removal,  together with all expenses of Lessor in  connection  with such
        reletting  (including,   without  limitation,  all  repossession  costs,
        brokerage   commissions,   reasonable   attorneys'   fees  and  expenses
        (including,   without   limitation,   fees  and  expenses  of  appellate
        proceedings),  employee's  expenses,  alteration  costs and  expenses of
        necessary  preparation for such reletting),  less (ii) the net proceeds,
        if any, of any reletting  effected for the account of Lessee pursuant to
        subsection 7.01(d).  Lessee shall pay such liquidated and agreed current
        damages on the dates on which rent would be payable  under this Lease in
        the absence of such expiration,  termination,  reentry,  repossession or
        removal, and Lessor shall be entitled to recover the same from Lessee on
        each such date.

   (g)  At any time after any such  expiration or  termination of the Lease Term
        or  reentry or  repossession  of the  Premises  or removal of persons or
        property  therefrom by reason of the  occurrence of an Event of Default,
        whether or not Lessor shall have  collected  any  liquidated  and agreed
        current damages pursuant to subsection 7.01(f), Lessor shall be entitled
        to recover from Lessee, and Lessee shall pay to Lessor on demand, as and
        for liquidated and agreed final damages for Lessee's default and in lieu
        of all  liquidated  and agreed  current  damages beyond the date of such
        demand (it being  agreed  that it would be  impracticable  or  extremely
        difficult to fix the actual damages),  an amount equal to the excess, if
        any, of (a) the aggregate of all Basic Rent,  additional  rent and other
        sums which would be payable under this Lease, in each case from the date
        of such demand (or, if it be earlier, to date to which Lessee shall have
        satisfied  in full  its  obligations  under  subsection  7.01(f)  to pay
        liquidated  and  agreed  current  damages)  for  what  would be the then
        unexpired  Lease Term in the  absence of such  expiration,  termination,
        reentry,  repossession  or  removal,  discounted  at the  rate of 6% per
        annum,  over (b) the then fair rental value of the Premises,  discounted
        at the rate of 6% per annum for the same period.  If any law shall limit
        the amount of  liquidated  final  damages to less than the amount  above
        agreed upon,  Lessor shall be entitled to the maximum  amount  allowable
        under such law.

        Section 7.02. Bankruptcy or Insolvency.

   (a)  If Lessee  shall  become a debtor  in a case  filed  under  Chapter 7 or
        Chapter 11 of the Bankruptcy  Code and Lessee or Lessee's  trustee shall
        fail to elect to assume  this  Lease  within 60 days after the filing of
        such  petition or such  additional  time as provided by the court within
        such 60-day  period,  this Lease shall be deemed to have been  rejected.
        Immediately  thereupon,  Lessor shall be entitled to  possession  of the
        Premises without further  obligation to Lessee or Lessee's trustee,  and
        this Lease, upon the election of Lessor,  shall terminate,  but Lessor's
        right to be  compensated  for damages  (including,  without  limitation,
        liquidated  damages pursuant to any provision hereof) or the exercise of
        any other remedies in any such proceeding shall survive,  whether or not
        this Lease shall be terminated.


<PAGE>

   (b)  Neither the whole nor any portion of Lessee's  interest in this Lease or
        its  estate  in  the  Premises  shall  pass  to any  trustee,  receiver,
        conservator,  assignee  for the benefit of creditors or any other person
        or entity,  by operation of law or otherwise under the laws of any state
        having  jurisdiction of the person or property of Lessee,  unless Lessor
        shall have consented to such  transfer.  No acceptance by Lessor of rent
        or any other payments from any such trustee, receiver,  assignee, person
        or other entity shall be deemed to constitute such consent by Lessor nor
        shall it be deemed a waiver of Lessor's  right to  terminate  this Lease
        for any  transfer of Lessee's  interest  under this Lease  without  such
        consent.

   (c)  In the event of an  assignment  of Lessee's  interests  pursuant to this
        Section 7.02,  the right of any assignee to extend the Lease Term for an
        Extended  Term beyond the Primary Term or the then Extended Term of this
        Lease shall be extinguished.

        Section 7.03. Additional Rights of Lessor.

   (a)  No right or remedy  hereunder  shall be  exclusive of any other right or
        remedy,  but shall be  cumulative  and in addition to any other right or
        remedy  hereunder or now or hereafter  existing.  Failure to insist upon
        the  strict  performance  of any  provision  hereof or to  exercise  any
        option,  right,  power or remedy contained herein shall not constitute a
        waiver or  relinquishment  thereof for the future.  Receipt by Lessor of
        any Basic Rent,  additional  rent or other sums payable  hereunder  with
        knowledge of the breach of any  provision  hereof  shall not  constitute
        waiver of such breach,  and no waiver by Lessor of any provision  hereof
        shall be deemed to have been made unless made in writing.  Lessor  shall
        be entitled to injunctive relief in case of the violation,  or attempted
        or threatened violation, of any of the provisions hereof, or to a decree
        compelling  performance of any of the provisions hereof, or to any other
        remedy allowed to Lessor by law or equity.

   (b)  Lessee hereby waives and  surrenders  for itself and all those  claiming
        under it, including  creditors of all kinds, (i) any right and privilege
        which it or any of them may have to  redeem  the  Premises  or to have a
        continuance  of this  Lease  after  termination  of  Lessee's  right  of
        occupancy  by order or judgment of any court or by any legal  process or
        writ, or under the terms of this Lease,  or after the termination of the
        Lease  Term as  herein  provided,  (ii) the  benefits  of any law  which
        exempts  property from liability for debt and (iii) Lessee  specifically
        waives any rights of redemption or reinstatement available by law or any
        successor law.

   (c)  If an Event  of  Default  on the  part of  Lessee  shall  have  occurred
        hereunder and be continuing, then, without thereby waiving such default,
        Lessor  may,  but  shall be under no  obligation  to,  take all  action,
        including,  without limitation,  entry upon the Premises, to perform the
        obligation of Lessee  hereunder  immediately  and without  notice in the
        case of any emergency as may be reasonably determined by Lessor and upon
        five  business  days'  notice to Lessee in other cases.  All  reasonable
        expenses incurred by Lessor in connection therewith,  including, without
        limitation, attorneys' fees and expenses (including, without limitation,
        those  incurred in  connection  with any appellate  proceedings),  shall
        constitute  additional rent under this Lease and shall be paid by Lessee
        to Lessor upon demand.

   (d)  If  Lessee  shall  be in  default  in  the  performance  of  any  of its
        obligations  under this Lease beyond any applicable grace or cure period
        hereunder,  Lessee shall pay to Lessor, on demand, all expenses incurred
        by Lessor as a result thereof, including, without limitation, reasonable
        attorneys'  fees and  expenses  (including,  without  limitation,  those
        incurred in connection with any appellate proceedings).  If Lessor shall
        be made a party to any  litigation  commenced  against Lessee and Lessee
        shall fail to provide Lessor with counsel approved by Lessor and pay the
        expenses thereof,  Lessee shall pay all costs and reasonable  attorneys'
        fees and expenses in connection with such litigation (including, without
        limitation,  fees and expenses incurred in connection with any appellate
        proceedings).

   (e)  If Lessee shall fail to pay when due any Basic Rent,  additional rent or
        other sum  required  to be paid by  Lessee  hereunder,  Lessor  shall be
        entitled to collect from Lessee as additional  rent and Lessee shall pay
        to Lessor, in addition to such Basic Rent, additional rent or other sum,


<PAGE>

        a late payment  charge on the  delinquency  equal to the Late Rate.  The
        Late Rate  shall be the  lesser of (i) that per annum  rate of  interest
        which exceeds by two (2)  percentage  points the base rate most recently
        announced in the Wall Street Journal (or a comparable publication if the
        Wall Street Journal ever shall cease publication),  as the Prime rate or
        (ii) the maximum rate  permitted by  applicable  law. In addition to all
        other  remedies  Lessor has  hereunder,  if Lessee shall fail to pay any
        Basic Rent,  additional  rent or other sum,  as and when  required to be
        paid by  Lessee  hereunder  prior to the  expiration  for the  period of
        payment pursuant to subsection  7.01(a)(i)(1),  Lessor shall be entitled
        to collect from Lessee,  and Lessee shall pay to Lessor,  as  additional
        rent, an amount equal to 1% of the amount shown in the notice as unpaid.

                                  ARTICLE VIII

        Section  8.01.  Notices  and Other  Instruments.  All  notices,  offers,
consents and other  instruments given pursuant to this Lease shall be in writing
and shall be validly  given when hand  delivered or sent by a courier or express
service  guaranteeing  overnight  delivery or by telecopy,  with original  being
promptly sent as otherwise provided above, addressed as follows:

         If to Lessor:              c/o United Trust Fund, Inc.
                                    Suite 1300
                                    701 Brickell Avenue
                                    Miami, FL  33131
                                    Attention:  Sidney Domb, President
                                    Facsimile:  (305) 358-4002

         With a copy to:            Kutak Rock LLP
                                    The Omaha Building
                                    1650 Farnam Street
                                    Omaha, NE  68102
                                    Attention:  Walter L. Griffiths, Esq.
                                    Facsimile:  (402) 346-1148

          If to Lessee:             Point.360
                                    2777 N. Ontario Street
                                    Burbank, CA 91504
                                    Attention:  Chief Financial Officer
                                    Facsimile:  818-847-2503


          With a copy to:           Point.360
                                    2777 N. Ontario Street
                                    Burbank, CA 91504
                                    Attention:  General Counsel
                                    Facsimile:  818-847-2503

        Lessor and Lessee each may from time to time specify, by giving 15 days'
notice to each other party,  (i) any other  address in the United  States as its
address for  purposes  of this Lease and (ii) any other  person or entity in the
United States that is to receive copies of notices,  offers,  consents and other
instruments hereunder.  Notices given in accordance with this Section 8.01 shall
be deemed delivered on the day after they are sent.

        Section 8.02. Estoppel Certificates; Financial Information.

   (a)  Lessee  will,  upon 10 days'  written  notice at the  request of Lessor,
        execute,  acknowledge  and deliver to Lessor,  a certificate  of Lessee,
        which states that this Lease is unmodified  and in full force and effect
        (or, if there have been modifications,  that this Lease is in full force
        and effect as modified, and setting forth such modifications) as well as
        the dates to which Basic Rent,  additional  rent and other sums  payable
        hereunder  have been paid and either  stating  that to the  knowledge of
        Lessee no default  exists  hereunder or specifying  each such default of
        which Lessee has knowledge and whether or not Lessee is still  occupying
        and operating the Premises.  Any such  certificate may be relied upon by
        any actual or prospective mortgagee or purchaser of the Premises. Lessor
        will,  upon 10 days' written  notice at the request of Lessee,  execute,
        acknowledge and deliver to Lessee a certificate of Lessor,  stating that
        this Lease is unmodified and in full force and effect (or, if there have
        been  modifications,  that this  Lease is in full  force  and  effect as
        modified,  and setting forth such  modifications) and the dates to which
        Basic Rent,  additional rent and other sums payable  hereunder have been
        paid,  and either  stating  that to the  knowledge  of Lessor no default
        exists  hereunder  or  specifying  each such default of which Lessor has
        knowledge.  Any such  certificate  may be  relied  upon by Lessee or any
        actual or prospective assignee or sublessee of the Premises.


<PAGE>

   (b)  To the  extent  not  available  on the  website  of the  Securities  and
        Exchange  Commission (the "SEC") Lessee will deliver to Lessor within 30
        days (except as set forth below) of filing,  sending or otherwise making
        public,  copies of all  periodic  reports  filed by Lessee  with the SEC
        (including,  without limitation, all 8-K, 10-K and 10-Q reports pursuant
        to Section  13(a) of the  Securities  Act of 1934, as amended (the "1934
        Act") and all proxy statements of Lessee to its stockholders;  provided,
        however,  that,  if such  statements  and reports are not required to be
        filed or do not include the following  information,  Lessee will deliver
        to Lessor with respect to Lessee the following:

        (i)    within  seven days after filing with the SEC but in no event more
               than 120 days after the end of each fiscal year of Lessee,  (1) a
               balance sheet of Lessee and its  consolidated  subsidiaries as of
               the end of such year,  (2) a  statement  of profits and losses of
               Lessee and its consolidated  subsidiaries for such year and (3) a
               statement   of  cash  flows  of  Lessee   and  its   consolidated
               subsidiaries for such year, setting forth in each of (1), (2) and
               (3) above, in comparative form, the corresponding figures for the
               preceding  fiscal  year  in  reasonable   detail  and  scope  and
               certified  by  independent   certified   public   accountants  of
               recognized  national standing  selected by Lessee,  and within 60
               days  after the end of each  fiscal  quarter  of Lessee a balance
               sheet of Lessee and its  consolidated  subsidiaries as of the end
               of such  quarter and  statements  of profits and losses of Lessee
               and its consolidated subsidiaries for such quarter, setting forth
               in each case, in comparative form, the corresponding  figures for
               the similar quarter of the preceding  year, in reasonable  detail
               and scope,  and  certified  by an  officer of Lessee,  all of the
               foregoing financial  statements being prepared in accordance with
               generally accepted accounting  principles,  consistently applied,
               except as otherwise indicated in such statements; and

        (ii)   Upon  request  of  Lessor,  with  reasonable   promptness,   such
               additional  financial  statements  and  information   (including,
               without  limitation,  copies of public reports filed by Lessee or
               financial  statements and information  delivered by Lessee to its
               shareholders  or lenders and, if Lessee is part of a consolidated
               group,   its  financial   statement   consolidating   entries  in
               reasonable  detail)  regarding the business affairs and financial
               condition of Lessee as Lessor may reasonably request.

   (c)  Upon two business days' prior written notice,  Lessor and its agents and
        designees  may enter upon and examine the Premises and show the Premises
        to prospective  mortgagees and/or purchasers.  Lessee will provide, upon
        Lessor's request, all information regarding the Premises, including, but
        not limited to, a current rent roll, an operating  statement  reflecting
        all income from  subleases and all operating  expenses for the Premises.
        An appropriate  officer of Lessee will certify all such information.  In
        addition,  upon the  reasonable  request  of  Lessor,  Lessee  will make
        available  at Lessee's  selection  officers,  managers or  employees  of
        Lessee to discuss with Lessor the business affairs of Lessee.

                                   ARTICLE IX

        Section  9.01.  No Merger.  There shall be no merger of this Lease or of
the  leasehold  estate  hereby  created  with the fee estate in the  Premises by
reason  of the  fact  that  the same  person  acquires  or  holds,  directly  or
indirectly,  this Lease or the leasehold  estate hereby  created or any interest
herein or in such leasehold estate, as well as the fee estate in the Premises or
any interest in such fee estate.

        Section 9.02.  Surrender.  Upon the  expiration or  termination  of this
Lease,  Lessee  shall  surrender  the  Premises  to  Lessor in good  repair  and
condition  except for any damage  resulting  from  Condemnation  or  Casualty or
normal wear and tear not required to be repaired by Lessee.  The  provisions  of
this Section and Article III shall survive the  expiration or other  termination
of this Lease.

        Section  9.03.  Assumption.  It shall be a  condition  precedent  to the
consolidation  of  Lessee  with  one or more  Persons  and to the  sale or other
disposition of all or  substantially  all of the assets of Lessee to one or more
Persons that the surviving  entity or transferee of assets,  as the case may be,
shall  deliver  to Lessor,  and any  assignee  of any  interest  of  Lessor,  an
acknowledged instrument assuming all obligations, covenants and responsibilities
of Lessee hereunder.


<PAGE>

        Section  9.04.   Separability;   Binding  Effect;  Governing  Law.  Each
provision  hereof  shall be  separate  and  independent,  and the  breach of any
provision  by Lessor  shall not  discharge  or  relieve  Lessee  from any of its
obligations  hereunder.  Each  provision  hereof  shall  be valid  and  shall be
enforceable to the extent not prohibited by law. If any provision  hereof or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable,  the remaining  provisions  hereof, or the application of such
provision to persons or circumstances other than those as to which it is invalid
or  unenforceable,  shall not be affected thereby.  All provisions  contained in
this Lease shall be binding upon,  inure to the benefit of and be enforceable by
the  successors  and  assigns  of  Lessor  to the same  extent  as if each  such
successor and assign were named as a party hereto.  All provisions  contained in
this Lease shall be binding upon the  successors and assigns of Lessee and shall
inure to the  benefit of and be  enforceable  by the  permitted  successors  and
assigns  of  Lessee in each case to the same  extent  as if each  successor  and
assign  were  named as a party  hereto.  This  Lease  shall be  governed  by and
interpreted  in accordance  with the laws of the state in which the Premises are
located.

        Section 9.05. Table of Contents and Headings;  Internal References.  The
table of contents and the headings of the various  paragraphs  and  schedules of
this Lease have been  inserted  for  reference  only and shall not to any extent
have the effect of modifying  the express  terms and  provisions  of this Lease.
Unless  stated to the  contrary,  any  references  to any  Section,  subsection,
Schedule  and  the  like  contained  herein  are  to  the  respective   Section,
subsection, Schedule and the like of this Lease.

        Section  9.06.  Counterparts.  This Lease may be executed in two or more
counterparts and shall be deemed to have become effective when and only when one
or more of such counterparts shall have been executed by or on behalf of each of
the  parties  hereto  (although  it  shall  not be  necessary  that  any  single
counterpart be executed by or on behalf of each of the parties  hereto,  and all
such counterparts shall be deemed to constitute but one and the same instrument)
and shall have been delivered by each of the parties to the other.

        Section  9.07.  Lessor's  Liability.  Notwithstanding  anything  to  the
contrary provided in this Lease, it is specifically  understood and agreed, such
agreement  being a primary  consideration  for the  execution  of this  Lease by
Lessor,  that there shall be absolutely no personal liability on the part of any
partner,  director,  member, officer or shareholder of Lessor, its successors or
assigns  with  respect to any of the terms,  covenants  and  conditions  of this
Lease,  and any  liability on the part of Lessor shall be limited  solely to the
Premises, such exculpation of liability to be absolute and without any exception
whatsoever.

        Section 9.08. Amendments and Modifications. Except as expressly provided
herein,  this Lease may not be modified or terminated except by a writing signed
by Lessor and Lessee.

        Section 9.09.  Additional  Rent. All amounts other than Basic Rent which
Lessee is required to pay or  discharge  pursuant to this Lease,  including  the
charge provided for by Section 7.03(e) hereof, shall constitute additional rent.

        Section 9.10.  Consent of Lessor.  Except as  specifically  set forth in
this Lease,  all  consents  and  approvals  to be granted by Lessor shall not be
unreasonably  withheld or delayed,  and Lessee's sole remedy  against Lessor for
the failure to grant any consent shall be to seek injunctive  relief.  If Lessor
withholds a consent or  approval,  Lessor  shall  provide  Lessee with a written
statement detailing the reasons for such denial within five (5) business days of
the date of the denial.  In no  circumstance  will Lessee be entitled to damages
with respect to the failure to grant any consent or approval.

        Section  9.11.  Options.  The options to extend the Primary  Term or any
existing  Extended  Term created in this Lease are  exercisable  only as long as
this Lease is in effect and has not expired or been terminated.

        Section 9.12. Schedules.  Attached hereto are Schedules A and B referred
to in this Lease, which Schedules are hereby incorporated by reference herein.

        Section 9.13.  Currency.  All references in this Lease to money shall be
to the currency of the United States of America.


<PAGE>


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

                           UTFLA LLC, a Delaware limited liability company


                           By:  UTFJV, LLC, a Delaware limited
                                liability company, its managing member

                           By:  UTFJV Managing Member, LLC, a
                                Delaware limited liability company,
                                its managing member

                           By:  United Trust Fund Limited
                                Partnership, a Delaware limited
                                partnership, its sole member

                           By:  United Trust Fund, Inc., a Florida
                                corporation, its sole general partner

                           By:  /s/ Fred Berliner
                                --------------------------------------
                                    Fred Berliner
                                    Senior Vice President


                           POINT.360, a California corporation


                           By:  /s/ Alan Steel
                                --------------------------------------
                                    Alan Steel
                                    Chief Financial Officer


<PAGE>


                                   SCHEDULE A

                                     PART I

                                LEGAL DESCRIPTION


LOT 3 OF TRACT NO. 53696-01, IN THE CITY OF LOS ANGELES,  COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA,  AS PER MAP RECORDED IN BOOK 1282, PAGES 41 TO 43 INCLUSIVE
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.


<PAGE>


                                   SCHEDULE A

                                     PART II

                                   AGREEMENTS





<PAGE>


                                   SCHEDULE A

                                    PART III

                              PERMITTED EXCEPTIONS


<PAGE>


                                     PART IV

                               SEVERABLE PROPERTY


        All apparatus, personal property, trade fixtures, inventory,  equipment,
machinery,  fittings,  furniture,  furnishings,  chattel, materials and supplies
located on and used in, or  related to  Lessee's  business,  including,  but not
limited to, overhead cranes mainframe computers, kitchen equipment and telephone
and similar  systems and articles of personal  property of every kind and nature
whatsoever,  and  any  additions,  replacements,  accessions  and  substitutions
thereto or therefor,  and all proceeds of all of the  foregoing,  or any part of
the foregoing used or usable in connection with any present or future  operation
or  letting  (or  subletting)  of the  Premises  or the  activities  at any time
conducted  thereon and now or hereafter  owned by Lessee or by any  sublessee or
other person or entity using all or any part of the  Premises  by,  through,  or
under (or with the express or implied consent of) Lessee.


<PAGE>


                                   SCHEDULE B

                                     PART I

                       THE PRIMARY TERM AND EXTENDED TERMS


                             Commencement Expiration
Primary Term:                     April 1, 2006                March 31, 2021
Extended Terms:
   1st Extended Term:             April 1, 2021                March 31, 2026
   2nd Extended Term:             April 1, 2026                March 31, 2031
   3rd Extended Term:             April 1, 2031                March 31, 2036
   4th Extended Term:             April 1, 2036                March 31, 2041


<PAGE>


                                     PART II

                                   BASIC RENT


-------------------------- ---------------------------
          Years              Annual Rental Payments
-------------------------- ---------------------------
-------------------------- ---------------------------
            1                      $1,111,000
-------------------------- ---------------------------
-------------------------- ---------------------------
            2                      $1,111,000
-------------------------- ---------------------------
-------------------------- ---------------------------
            3                      $1,111,000
-------------------------- ---------------------------
-------------------------- ---------------------------
            4                      $1,111,000
-------------------------- ---------------------------
-------------------------- ---------------------------
            5                      $1,111,000
-------------------------- ---------------------------
-------------------------- ---------------------------
          6-15             Basic Rent as determined
                           pursuant to Section 1.05
                           of the Lease Agreement
-------------------------- ---------------------------
------------------------------------------------------
                       Options
------------------------------------------------------
-------------------------- ---------------------------
          16-20            Basic Rent as determined
                           pursuant to Section 1.05
                           of the Lease Agreement
-------------------------- ---------------------------
-------------------------- ---------------------------
          21-25            Basic Rent as determined
                           pursuant to Section 1.05
                           of the Lease Agreement
-------------------------- ---------------------------
-------------------------- ---------------------------
          26-30            Basic Rent as determined
                           pursuant to Section 1.05
                           of the Lease Agreement
-------------------------- ---------------------------
-------------------------- ---------------------------
          31-35            Basic Rent as determined
                           pursuant to Section 1.05
                           of the Lease Agreement
-------------------------- ---------------------------