INDEMNITY AGREEMENT


     This Indemnity  Agreement  (the  "Agreement) is made as of the _____ day of
_____________,  by and between VDI  MultiMedia,  a California  corporation  (the
"Corporation"),  and _____________ (the "Indemnitee"), a director and/or officer
of the Corporation.

                                R E C I T A L S

     A. The Corporation and the Indemnitee  recognize that the interpretation of
statutes,   regulations,  court  opinions  and  the  Corporation's  Articles  of
Incorporation and By-Laws is too uncertain to provide the Corporation's officers
and  directors  with  adequate  guidance  with  respect  to the legal  risks and
potential liabilities to which they may become personally exposed as a result of
performing their duties in good faith for the Corporation.

     B. The Corporation and the Indemnitee are aware of the substantial increase
in the number of lawsuits filed against corporate officers and directors.

     C. The Corporation and the Indemnitee  recognize that the cost of defending
against  such  lawsuits,  whether or not  meritorious,  may  impose  substantial
economic hardship upon the Corporation's officers and directors.

     D. The  Corporation  and the  Indemnitee  recognize  that the legal  risks,
potential liabilities and expenses of defense associated with litigation against
officers  and  directors  arising or  alleged  to arise from the  conduct of the
affairs of the  Corporation  are  frequently  excessive in view of the amount of
compensation received by the Corporation's officers and directors,  and thus may
act as a  significant  deterrent  to the  ability of the  Corporation  to obtain
experienced and capable officers and directors.

     E. Section 317 of the California General  Corporation Law, which sets forth
certain  provisions  relating to the  indemnification  of officers and directors
(among others) of a California corporation by such corporation,  is specifically
not  exclusive  of other  rights to which those  indemnified  thereunder  may be
entitled  under any bylaw,  agreement,  vote of  shareholders  or  disinterested
directors, or otherwise.

     F. In order to induce  capable  persons such as the  Indemnitee to serve or
continue to serve as officers or directors of the Corporation and to enable them
to perform their duties to the Corporation  secure in the knowledge that certain
expenses  and  liabilities  that may be  incurred  by them  will be borne by the
Corporation, the Board of Directors of the Corporation has determined, after due
consideration  and  investigation  of the terms and provisions of this Agreement
and the various other options available to the Corporation and the Indemnitee in
lieu of this Agreement, that the following Agreement is in the best interests of
the Corporation and its shareholders.

     G. The  Corporation  desires to have the  Indemnitee  serve or  continue to
serve as an officer  and/or  director  of the  Corporation,  and the  Indemnitee
desires to serve or  continue  to serve as an  officer  and/or  director  of the
Corporation  provided,  and on the express condition,  that he is furnished with
the indemnity set forth below.

<PAGE>
                                A G R E E M E N T

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the Corporation and the Indemnitee agree as follows:

     1. CONTINUED  SERVICE.  The Indemnitee agrees to serve or continue to serve
as a  director  and/or  officer  of the  Corporation  for so  long as he is duly
elected or appointed or until such time as he resigns in writing.

     2. DEFINITIONS.

     (a)  The  term  "Proceeding"  shall  include  any  threatened,  pending  or
completed  action,  suit  or  proceeding,  whether  brought  in the  name of the
Corporation or otherwise and whether of a civil,  criminal or  administrative or
investigative  nature,   including,  but  not  limited  to,  actions,  suits  or
proceedings  brought under or  predicated  upon the  Securities  Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, their respective state
counterparts  or any rule or  regulation  promulgated  thereunder,  in which the
Indemnitee may be or may have been involved as a party or otherwise by reason of
the  fact  that  the  Indemnitee  is or was a  director  and/or  officer  of the
Corporation, by reason of any action taken by him or of any inaction on his part
while acting as such director and/or  officer,  or by reason of the fact that he
is or was serving at the  request of the  Corporation  as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other enterprise,  whether or not he is serving in such capacity at the time any
indemnified liability or reimbursable expense is incurred.

     (b) The term  "Expenses"  shall  include,  but  shall  not be  limited  to,
damages,   judgments,   fines,  settlements  and  charges,  costs,  expenses  of
investigation  and expenses of defense of legal actions,  suits,  proceedings or
claims and appeals  therefrom,  and  expenses of appeal,  attachment  or similar
bonds.  "Expenses" shall not include any judgments,  fines or penalties actually
levied against the Indemnitee  which the Corporation is prohibited by applicable
law from paying.

     3.  INDEMNITY  IN  THIRD-PARTY  PROCEEDINGS.  Subject to  Paragraph  8, the
Corporation  shall indemnify the Indemnitee in accordance with the provisions of
this Paragraph 3 if the Indemnitee is a party to,  threatened to be made a party
to or  otherwise  involved in any  Proceeding  (other than a  Proceeding  by the
Corporation  itself to procure a judgment in its  favor),  by reason of the fact
that the Indemnitee is or was a director and/or officer of the Corporation or is
or was  serving  at the  request  of the  Corporation  as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other enterprise,  against all Expenses actually and reasonably  incurred by the
Indemnitee  in connection  with the defense or  settlement  of such  Proceeding,
provided it is determined,  pursuant to Paragraph 7 or by the court before which

such action was brought, that the Indemnitee acted in good faith and in a manner
that he reasonably  believed to be in the best interests of the Corporation and,
in the case of a criminal  proceeding,  had no reasonable  cause to believe that
his conduct was unlawful.  The  termination of any such  Proceeding by judgment,
order of court, settlement,  conviction or upon a plea of nolo contendere or its
equivalent  shall not, of itself,  create a presumption  that the Indemnitee did
not act in good faith or in a manner  that he  reasonably  believed to be in the
best interests of the Corporation,  and with respect to any criminal proceeding,
that such person had reasonable cause to believe that his conduct was unlawful.

                                       2
<PAGE>

     4. INDEMNITY IN PROCEEDINGS BY OR IN THE NAME OF THE  CORPORATION.  Subject
to Paragraph 8, the  Corporation  shall  indemnify  the  Indemnitee  against all
Expenses  actually and reasonably  incurred by the Indemnitee in connection with
the defense or settlement of any Proceeding by or in the name of the Corporation
to procure a judgment in its favor by reason of the fact that the Indemnitee was
or is a director  and/or officer of the  Corporation or is or was serving at the
request of the Corporation as a director,  officer, employee or agent of another
corporation,  partnership, joint venture, trust or other enterprise, but only if
he acted in good faith and in a manner that he reasonably  believed to be in the
best interests of the Corporation and its shareholders;  provided, however, that
no  indemnification  for  Expenses  shall be made  under this  Paragraph  4 with
respect to any claim, issue or matter as to which the Indemnitee shall have been
adjudged to be liable to the Corporation, unless and only to the extent that any
court in which such Proceeding is brought shall determine upon  application that
despite the adjudication of liability,  but in view of all the  circumstances of
the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
expenses as such court shall deem proper.

     5.  INDEMNIFICATION  OF EXPENSES OF SUCCESSFUL PARTY.  Notwithstanding  any
other  provisions of this Agreement,  to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding or in defense
of any claim,  issue or matter  therein,  including  the  dismissal of an action
without  prejudice,  the Indemnitee  shall be  indemnified  against all Expenses
incurred in connection therewith.

     6. ADVANCES OF EXPENSES.  Expenses  incurred by the Indemnitee  pursuant to
Paragraphs 3 and 4 in any Proceeding shall be paid by the Corporation in advance
of  the  determination  of  such  Proceeding  at  the  written  request  of  the
Indemnitee, if the Indemnitee shall undertake to repay such amount to the extent
that  it is  ultimately  determined  that  the  Indemnitee  is not  entitled  to
indemnification.

     7. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION;  PROCEDURE UPON
APPLICATION.  Any  indemnification or advance under Paragraph 3, 4 or 6 shall be
made  no  later  than  30 days  after  receipt  of the  written  request  of the
Indemnitee  therefore,  unless a determination is made within said 30-day period
by (a) the Board of Directors of the  Corporation by a majority vote of a quorum
thereof consisting of directors who were not parties to such Proceedings, or (b)
independent legal counsel in a written opinion (which counsel shall be appointed
if such a quorum is not obtainable) that the Indemnitee has not met the relevant
standards for indemnification set forth in Paragraphs 3 and 4.

     The right to  indemnification  or advances  as  provided by this  Agreement
shall be enforceable  by the Indemnitee in any court of competent  jurisdiction.
The  Corporation  shall  bear the  burden of  proving  that  indemnification  or
advances  are not  appropriate.  The failure of the  Corporation  to have made a
determination  that  indemnification or advances are proper in the circumstances
shall not be a defense to the action or create a presumption that the Indemnitee
has not met the  applicable  standard  of  conduct.  The  Indemnitee's  Expenses
incurred   in   connection   with   successfully   establishing   his  right  to
indemnification  or advances,  in whole or in part, in any such Proceeding shall
also be indemnified by the Corporation.

     8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE.

     (a)  Notwithstanding  any other  provision of this  Agreement,  the Company
shall not indemnify Indemnitee for any act or omission or transactions for which
indemnification is expressly  prohibited by Section 204(a)(11) of the California
General Corporation Law.

     (b) The right to  indemnification  provided by this Agreement  shall not be
exclusive of any other rights to which the  Indemnitee may be entitled under the
Corporation's  Articles of  Incorporation,  bylaws,  any agreement,  any vote of
shareholders or disinterested  directors, the California General Corporation Law
or  otherwise,  both as to action in his  official  capacity and as to action in
another  capacity  while  holding such office.  The  indemnification  under this
Agreement  shall continue as to the Indemnitee even though he may have ceased to
be a  director  or  officer,  and shall  inure to the  benefit  of the heirs and
personal representatives of the Indemnitee.

                                       3
<PAGE>

     9.  PARTIAL  INDEMNIFICATION.  If the  Indemnitee  is  entitled  under  any
provision of this Agreement to  indemnification by the Corporation for a portion
of his Expenses  actually and  reasonably  incurred by him in any Proceeding but
not, however,  for the total amount thereof,  the Corporation shall nevertheless
indemnify  the  Indemnitee  for  the  portion  of such  Expenses  to  which  the
Indemnitee is entitled.

     10. SEVERABILITY.  If any provision of this Agreement or the application of
any  provision   hereof  to  any  person  or   circumstance   is  held  invalid,
unenforceable  or otherwise  illegal,  the  remainder of this  Agreement and the
application  of such  provision to other persons or  circumstances  shall not be
affected,  and the provision so held to be invalid,  unenforceable  or otherwise
illegal  shall be revised to the extent  (and only to the extent)  necessary  to
make it enforceable, valid and legal.

     11.  GOVERNING  LAW. This  Agreement  shall be governed by and construed in
accordance  with the laws of the State of  California,  without giving effect to
the principles of conflict of laws thereof.

     12. NOTICES. The Indemnitee shall, as a condition precedent to his right to
be indemnified under this Agreement,  give to the Corporation  written notice as
soon as  practicable  of any claim made against him for which  indemnity will or
could be  sought  under  this  Agreement.  Notice  to the  Corporation  shall be
directed to VDI  MultiMedia,  7083 Hollywood  Boulevard,  Suite 200,  Hollywood,
California 90028, Attention: Alan Steel, Senior Vice President (or at such other
address  or to the  attention  of such  other  person as the  Corporation  shall
designate in writing to the Indemnitee). Notices to the Indemnitee shall be sent
to the  Indemnitee at the address set forth after his name on the signature page
of this Agreement (or at such other addresses the Indemnitee  shall designate in
writing to the Corporation).


VDI MULTIMEDIA

By: ----------------------------------

Title:    ----------------------------

INDEMNITEE

--------------------------------------

(Print Name)

Address:  ----------------------------

          ----------------------------

          ----------------------------