Document:

EXHIBIT 10.5

Employee Stock Purchase Plan(Incorporated by Reference to Exhibit
4.4 to Union National Financial Corporation's Registration
Statement No. 333-27837 on Form S-8, filed with the Commission on
May 27, 1997).The CIT Group/
                  Credit Finance
                  3rd Floor
                  300 S Grand Avenue
                  Los Angeles, CA  90071
                  Tel:  213 613-2500
                  Fax:  213 613-2501

  THE
  CIT

GROUP

June 7, 1999

Laser-Pacific Media Corporation
Laser Edit Inc.
PDS Video Productions, Inc.
Spectra Systems, Inc.
Pacific Film Laboratories Inc.
Pacific Video, Inc.
809 North Cahuenga Blvd.
Los Angeles, CA  90038
Attention:  James Parks, Chief Executive Officer

        Re: Loan and Security Agreements with The CIT Group/Credit Finance, Inc.
                                            - AMENDMENT NO. 8-

Gentlemen:

Reference is made to your respective Loan and Security  Agreements  wherein each
of you is a "Borrower" and The CIT Group/Credit  Finance,  Inc. is the "Lender",
all of which  Loan and  Security  Agreements  are  dated  August  3,  1992  (the
"Agreements").  Lender and each Borrower have agreed to amend the  Agreements as
follows effective  immediately.  Except as amended herein,  the Agreements shall
remain unchanged and in full force and effect.

1.           Accounts Receivable.

        Notwithstanding  any  language  in Section  5.1 of the  Agreements,  and
        provided  Borrower  is not in Default to Lender,  Borrower  shall not be
        obligated to remit proceeds of its accounts to Lender provided Lender is
        not lending against said accounts.

        If  Borrower  subsequently  desired  to  request  advances  against  the
        accounts,  Borrower  must  provide  Lender  with at least 30 days  prior
        written notice of its intention to request such advances to allow Lender
        sufficient time to conduct a field examination of Borrower's facilities,
        update its reporting and conduct any other due diligence.

2.           Field Examination Fees.

        Notwithstanding  any  language  in Section  6.13(d)  of the  Agreements,
        provided Lender is not lending against accounts and provided Borrower is
        not in Default to  Lender,  the  aggregate  Per Diem  Charges  for field
        examinations shall be limited to $5,000.00 per contract year.

3.           Minimum Borrowing Reduction.

        Section  10.1(e) of each of the  Agreements is hereby amended to provide
        that the Minimum  Borrowing shall equal the Term Loan balance,  provided
        Lender is not lending  against  accounts.  If Lender is lending  against
        accounts, the Minimum Borrowing shall be $2,000,000.00.

5.           Interest Rate Reduction.

        Section  10.4(a) of each of the  Agreements is hereby amended to read as
        follows:

        "(a)(1)  Interest Rate for Revolving Loans:   Prime Rate plus 1.0% over
                                                              a 360-day year

        (a)(2)  Interest Rate for Term Loans:         Prime Rate plus 1.0% over
                                                              a 360-day year"

6.           Facility Fee Reduction.

        Section 10.4(b) of each of the Agreements is hereby amended to eliminate
        the Facility Fee requirement.EMPLOYMENT AGREEMENT

                              Dated August 1, 1999

                                     Between

                         LASER-PACIFIC MEDIA CORPORATION

                                       And

                                 ROBERT McCLAIN

1.       Parties; Date.......................................................1
2.       Recitals............................................................1
3.       Executive's Authorities and Duties..................................2
4.       Term of Employment..................................................2
5.       Termination of Agreement............................................3
6.       Ownership of Intangibles............................................5
7.       Confidential Information............................................5
8.       Compensation and Benefits...........................................5
9.       Indemnification.....................................................8
10.      Entire Agreement............................... ....................8
11.      Applicable Law......................................................8
12.      Legal Fees..........................................................8
13.      Notices.............................................................9

<PAGE>

                                 ROBERT MCCLAIN
                              EMPLOYMENT AGREEMENT

1. PARTIES; DATE

         This employment  agreement (this "Agreement") is effective as of August
1, 1999 between  LASER-PACIFIC MEDIA CORPORATION,  INC., a Delaware  Corporation
(the "Employer"), and ROBERT McCLAIN (the "Executive")

2. RECITALS

         a. ......Executive has acquired special skills and abilities,  and an
extensive background in and knowledge of the Employer's business and the
industry in which it is engaged .

         b.  ......Employer  desires assurance of the continued  association and
services of  Executive  in order to retain his  experience,  skills,  abilities,
background, and knowledge and is therefore willing to engage his services on the
terms set forth below.

         c. ......Executive desires to continue in the employ of Employer and
is willing to do so on these terms.

THEREFORE, in consideration of these recitals and of the promises and conditions
in this Agreement it is agreed:

3. EXECUTIVE'S AUTHORITY AND DUTIES

         Employer shall continue to employ the Executive as the Chief  Financial
Officer and Secretary during the term of this agreement.  Executive shall devote
his full time and best  efforts as may be necessary  to  adequately  perform his
duties under the Agreement.  Executive  shall perform such duties as assigned to
him by the Chief Executive Officer,  Chief Operating Officer or Employer's Board
of Directors.  Executive's services shall be primarily performed in Los Angeles,
California,  though Executive may be required to travel from time to time in the
ordinary course of business.

4. TERM OF EMPLOYMENT

         Subject to the  provisions of Paragraph 5 below,  Employer shall employ
Executive  for a term of at least  three (3) years,  commencing  as of August 1,
1999.  Upon  expiration of the three year term,  Executive's  term of employment
shall be renewed for one additional year unless either party has given the other
party one hundred (120) days prior  written  notice of the  termination  of this
Agreement. For all subsequent years, the term of employment shall be renewed for
one additional  year unless  Employer has given Executive one hundred (120) days
prior written  notice of  termination.  In the event  Employer  terminates  this
Agreement,  Executive  shall  receive  one year's  compensation,  as provided by
Section 8 of the  Agreement,  at the current rate at the time of  termination of
this Agreement to be paid as follows:

(a)      In the event of termination of employment, said one year's
compensation shall be paid on termination.

(b)      In  the  event  of  termination  of  the  Agreement,  and Executive
continues in the  employment  of  Employer,  said one year's compensation
shall be paid in four  (4)  installments  paid  quarterly during the next
twelve (12) months.

5. TERMINATION OF AGREEMENT

         a.  ......Employer may terminate this Agreement at any time upon thirty
(30) days prior  written  notice if Executive (1) is convicted of a felony which
in the unanimous  opinion of  Employer's  Board of Directors  substantially  and
materially  impairs his capacity to perform his duties under this Agreement,  or
(2) is guilty of intentional misconduct which has a material adverse effect upon
Employer. (3) discloses confidential  information in violation of the Agreement.
(4) willfully breaches this agreement.

         Provided,   however,  that  prior  to  Executive's   termination  under
subsection 5(a)(2) or 5(a)(4) hereof,  Executive shall have 60 days from receipt
of written  notice from Employer  that it proposes to terminate  his  employment
pursuant to subsections 5(a)(2) or 5(a)(4) to (A) cure the alleged breach of his
duties or (B) show cause as to why he should not be so terminated.

         b. ......Employers chooses to not renew this Agreement pursuant to
Section 4.

         c. ......If Executive dies during the term of this Agreement, then this
Agreement  shall terminate on the last day of the month in which the Executive's
death occurs.

         d.  ......If  Employee is disabled for a period of six (6)  consecutive
months during the term hereof,  then Employer may terminate  this Agreement upon
written  notice given at the  expiration of such six month period  provided that
the disability  insurance  provided by Section 8(b) of this Agreement is in full
force and effect. The definition of "disability" shall be the same as that which
qualifies  Executive for full disability  insurance benefits pursuant to Section
8(b).

         e.  ......This  Agreement  shall not be  terminated by the voluntary or
involuntary dissolution of Employer or by any merger after which Employer is not
the  surviving  or  resulting  corporation,  or  upon  any  transfer  of  all or
substantially all of the assets of Employer.  In the event of any such merger or
transfer of assets, or any similar corporate reorganization, whatever may be its
form,  the  provisions  or this  Agreement  shall be binding on and inure to the
benefit,  and the  obligations  of Employer  shall be assumed by, the  surviving
business   entity  or  the  business  entity  to  which  such  assets  shall  be
transferred.

          f. If Executive's employment is terminated by the Company for "cause",
the Company shall have no further  obligation  to the  Executive  other than the
obligation  of the Company to pay to the Executive the Base Salary earned by the
Executive  through the date of termination and not previously paid to Executive,
accrued  expenses not previously  reimbursed and all accrued but unused vacation
time.

6. OWNERSHIP OF INTANGIBLES

         All proceeds, inventions, patents, copyrights, and the like relating in
any way to Employer's  business,  which are conceived or developed by Executive,
either alone or with others, during the term of this Agreement (except those not
related to the Company's  business and developed  entirely during Employee's own
time and without the use of any  equipment,  supplies,  facility or trade secret
information of Employer), shall be the sole property of the Employer.

7. CONFIDENTIAL INFORMATION

         In  the  course  of  his  employment,  Executive  may  have  access  to
confidential  information and trade secrets relating to Employer's  business and
may be required to sign nondisclosures,  nonuse or similar agreements.  Any such
agreements  that are  current  during  the  term of this  Agreement  are  herein
incorporated  by  reference.  Executive  shall not  materially  breach  any such
agreement.

8. COMPENSATION AND BENEFITS

         As the total  consideration  for the services which Executive agrees to
render, Executive shall receive the following:

         a. An initial base salary of one hundred  eighty-five  thousand dollars
($185,000)  for the first year of his  employment  , with such  increases in the
base salary for subsequent  years as may be determined by the Board of Directors
of  Employer,  less  income  tax and other  applicable  withholdings,  in weekly
installments or in accordance with Employer's regular payroll policies.

         b. A disability insurance policy (and pay all premiums therefore during
the Employment Term).  Calling for the payment of a benefit amount, for not less
than sixty-six and sixty-seven  hundredths of a percent  (66.67%) of Executive's
Compensation  set forth in Section  7(a) if  Executive  becomes  disabled  for a
period of six (6) consecutive months. The policy shall entitle Executive to full
benefits if he is unable to perform his duties under this Agreement,  regardless
of his ability to engage in other employment

         c.  Reimbursement  of any and all ordinary,  necessary,  and documented
expenses  incurred  by  Employee in the  performance  of his duties,  including,
without limitation,  entertainment expenses and air fare, taxi, automobile,  and
other traveling expenses and participation in all company wide executive benefit
plans  or  programs  sponsored  by  Employer   including,   without  limitation,
participation   in  any  group  health  plan  and  the  key  executive   medical
reimbursement plan.

         d. A minimum four week paid  vacation per year at such time or times as
may be approved by Employer, in accordance with Employer's vacation policy.

         e. An automobile allowance of $16,800 per year to be paid in accordance
with  Employer's  establisher  policy,  less  income  tax and  other  applicable
withholdings,  which is  intended  to  reimbursement  Executive  for all cost of
operating an automobile  including , without limitation,  maintenance,  repairs,
insurance  and  gasoline.  Employer  shall not  decrease  Executives  automobile
allowance during the term of this Agreement

         f.  Reimburse  for any  otherwise  unreimbursed  documented  medical or
dental  expenses of Executive or his immediate  family,  but such  reimbursement
shall  not  exceed $ 5,000 for any  calendar  year  during  which  Executive  is
employed hereunder.

         g. Any other fringe benefits  granted by Employer's  Board of Directors
in its discretion, which shall include Health Insurance program sponsored by the
Employer and a $500,000 term life insurance policy insuring Executives life with
the beneficiary of the policy to be determined by Executive.

         h. If  Executive  shall be  absent  because  of  personal  injuries  or
physical or mental illness, Executive shall continue to receive all compensation
provided for in this Agreement. Any such compensation may, at Employer's option,
be reduced by any amount that Executive  receives under 1) disability  insurance
policies maintained by Employer or 2) governmental programs.

9. INDEMNIFICATION

         Employer  shall,  to  the  maximum  extent  permitted  by  law  and  by
Employer's  Bylaws,   indemnify   Executive  against  all  expenses,   including
reasonable attorneys' fees,  judgments,  fines,  settlements,  and other amounts
actually and reasonably  incurred in connection  with any proceeding  arising by
reason of Executive's  employment by Employer.  Employer  shall,  to the maximum
extent  permitted by law and by  Employer's  bylaws,  advance to  Executive  any
expenses incurred in defending any such proceeding.

10. ENTIRE AGREEMENT

This Agreement  contains the entire agreement between the parties and supersedes
all  prior  oral  and  written  agreements,  understandings,   commitments,  and
practices  between  the  parties,  including  all prior  employment  agreements,
whether or not fully  performed by Executive  before the date of this Agreement.
No amendments to this  Agreement may be made except by a writing  signed by both
parties.

11. APPLICABLE LAW

This Agreement shall be construed in accordance with the laws of California.

12. LEGAL FEES

Employer  agrees to reimburse  Executive for reasonable  legal fees and expenses
incurred by Executive in connection  with the legal or equitable  enforcement of
this Agreement.

13. NOTICES

Any notice to Employer shall be given in writing,  either by personal service or
by registered or certified mail,  postage  prepaid,  duly addressed to the Chief
Executive Officer of Employer at its principal place of business,  currently 809
N. Cahuenga,  Los Angeles,  California 90038. Any such notice to Executive shall
be given in a like manner, and if mailed, shall be addressed to Executive at his
home  address  then  shown in the files of  Employer  or other  such  address as
Executive shall provide to Employer from time to time.

IN WITNESS  WHEREOF,  each of the parties has caused this Agreement to be signed
as of the date first above written.

DATED:     August 1,  1999

LASER-PACIFIC MEDIA CORPORATION, INC.
("Employer")

By:      ______________________________
         James R. Parks
         Chief Executive Officer

By:      ______________________________
         Robert McClain ("Executive")
         Chief Financial Officer and Secretary

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