Document:

SEVERANCE
      AGREEMENT

     

    THIS
      AGREEMENT, dated September 30, 2003, is made by and between Point.360 (the
      “Company”) and Haig Bagerdjian (the “Executive”).

     

    WHEREAS,
      the Company considers it essential to the best interests of its stockholders
      to
      foster the continued employment of key management personnel; and

     

    WHEREAS,
      the Board recognizes that, as is the case with many publicly held corporations,
      the possibility of a Change in Control exists and that such possibility, and
      the
      uncertainty and questions which it may raise among management, may result in
      the
      departure or distraction of management personnel to the detriment of the Company
      and its stockholders; and

     

    WHEREAS,
      the Board has determined that appropriate steps should be taken to reinforce
      and
      encourage the continued attention and dedication of members of the Company’s
      management, including the Executive, to their assigned duties without
      distraction in the face of potentially disturbing circumstances arising from
      the
      possibility of a Change in Control; 

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants herein
      contained, the Company and the Executive hereby agree as follows:

     

    1. Defined
      Terms.
      The
      definitions of capitalized terms used in this Agreement are provided in the
      last
      Section hereof.

     

    2. Term
      of Agreement.
      The
      Term of this Agreement shall commence on the date hereof and shall continue
      in
      effect through December 31, 2005; provided, however, that commencing on January
      1, 2006 and each January 1 thereafter, the Term shall automatically be extended
      for one additional year unless, not later than September 30 of the preceding
      year, the Company or the Executive shall have given notice not to extend the
      Term; and further provided, however, that if a Change in Control shall have
      occurred during the Term, the Term shall expire no earlier than twenty-four
      (24)
      months beyond the month in which such Change in Control occurred.

     

    3. Company’s
      Covenants Summarized.
      In
      order to induce the Executive to remain in the employ of the Company and in
      consideration of the Executive’s covenants set forth in Section 4 hereof, the
      Company agrees, under the conditions described herein, to pay the Executive
      the
      Severance Payments and the other payments and benefits described herein. Except
      as provided in Section 9.1 hereof, no Severance Payments shall be payable under
      this Agreement unless there shall have been (or, under the terms of the second
      sentence of Section 6.1 hereof, there shall be deemed to have been) a
      termination of the Executive’s employment with the Company following a Change in
      Control and during the Term. This Agreement shall not be construed as creating
      an express or implied contract of employment and, except as otherwise agreed
      in
      writing between the Executive and the Company, the Executive shall not have
      any
      right to be retained in the employ of the Company.

     

    4. The
      Executive’s Covenants.
      The
      Executive agrees that, subject to the terms and conditions of this Agreement,
      in
      the event of a Potential Change in Control during the Term, the Executive will
      remain in the employ of the Company until the earliest of (i) a date which
      is
      six (6) months from the date of such Potential Change in Control, (ii) the
      date
      of a Change in Control, (iii) the date of termination by the Executive of the
      Executive’s employment for Good Reason or by reason of death, Disability or
      Retirement, or (iv) the termination by the Company of the Executive’s employment
      for any reason.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5. Compensation
      Other Than Severance Payments.

     

    5.1 Following
      a Change in Control and during the Term, during any period that the Executive
      fails to perform the Executive’s full-time duties with the Company as a result
      of incapacity due to physical or mental illness, the Company shall pay the
      Executive’s full salary to the Executive at the rate in effect at the
      commencement of any such period, together with all compensation and benefits
      payable to the Executive under the terms of any compensation or benefit plan,
      program or arrangement maintained by the Company during such period (other
      than
      any disability plan), until the Executive’s employment is terminated by the
      Company for Disability.

     

    5.2 If
      the
      Executive’s employment shall be terminated for any reason following a Change in
      Control and during the Term, the Company shall pay the Executive’s full salary
      to the Executive through the Date of Termination at the rate in effect
      immediately prior to the Date of Termination or, if higher, the rate in effect
      immediately prior to the first occurrence of an event or circumstance
      constituting Good Reason, together with all compensation and benefits payable
      to
      the Executive through the Date of Termination under the terms of the Company’s
      compensation and benefit plans, programs or arrangements as in effect
      immediately prior to the Date of Termination or, if more favorable to the
      Executive, as in effect immediately prior to the first occurrence of an event
      or
      circumstance constituting Good Reason.

     

    5.3 If
      the
      Executive’s employment shall be terminated for any reason following a Change in
      Control and during the Term, the Company shall pay to the Executive the
      Executive’s normal post-termination compensation and benefits as such payments
      become due. Such post-termination compensation and benefits shall be determined
      under, and paid in accordance with, the Company’s retirement, insurance and
      other compensation or benefit plans, programs and arrangements as in effect
      immediately prior to the Date of Termination or, if more favorable to the
      Executive, as in effect immediately prior to the occurrence of the first event
      or circumstance constituting Good Reason.

     

    6. Severance
      Payments.

     

    6.1 If
      the
      Executive’s employment is terminated following a Change in Control and during
      the Term, other than (A) by the Company for Cause, (B) by reason of death or
      Disability, or (C) by the Executive without Good Reason, then the Company shall
      pay the Executive the amounts, and provide the Executive with the benefits,
      described in this Section 6.1 (“Severance Payments”) and Section 6.2, in
      addition to any payments and benefits to which the Executive is entitled under
      Section 5 hereof. For purposes of this Agreement, the Executive’s employment
      shall be deemed to have been terminated following a Change in Control by the
      Company without Cause or by the Executive with Good Reason, if (i) the
      Executive’s employment is terminated by the Company without Cause prior to a
      Change in Control (whether or not a Change in Control ever occurs) and such
      termination was at the request or direction of a Person who has entered into
      an
      agreement with the Company the consummation of which would constitute a Change
      in Control, (ii) the Executive terminates his employment for Good Reason prior
      to a Change in Control (whether or not a Change in Control ever occurs) and
      the
      circumstance or event which constitutes Good Reason occurs at the request or
      direction of such Person, or (iii) the Executive’s employment is terminated by
      the Company without Cause or by the Executive for Good Reason and such
      termination or the circumstance or event which constitutes Good Reason is
      otherwise in connection with or in anticipation of a Change in Control (whether
      or not a Change in Control ever occurs). For purposes of any determination
      regarding the applicability of the immediately preceding sentence, any position
      taken by the Executive shall be presumed to be correct unless the Company
      establishes to the Committee by clear and convincing evidence that such position
      is not correct.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (A) In
      lieu
      of any further salary payments to the Executive for periods subsequent to the
      Date of Termination and in lieu of any severance benefit otherwise payable
      to
      the Executive, the Company shall pay to the Executive a lump sum severance
      payment, in cash, equal to two and three quarters (2.75) times the sum of (i)
      the Executive’s base salary as in effect immediately prior to the Date of
      Termination or, if higher, in effect immediately prior to the first occurrence
      of an event or circumstance constituting Good Reason, and (ii) the higher of
      (x)
      average bonus earned by the Executive in respect of the three fiscal years
      ending immediately prior to the fiscal year in which occurs the Date of
      Termination; or (y) the Executive’s target annual bonus for the year in which
      occurs the Date of Termination.

     

    (B) For
      the
      thirty three (33) month period immediately following the Date of Termination,
      the Company shall arrange to provide the Executive and his dependents life,
      disability, accident and health insurance benefits substantially similar to
      those provided to the Executive and his dependents immediately prior to the
      Date
      of Termination or, if more favorable to the Executive, those provided to the
      Executive and his dependents immediately prior to the first occurrence of an
      event or circumstance constituting Good Reason, at no greater cost to the
      Executive than the cost to the Executive immediately prior to such date or
      occurrence; provided, however, that, unless the Executive consents to a
      different method (after taking into account the effect of such method on the
      calculation of “parachute payments” pursuant to Section 6.2 hereof), such health
      insurance benefits shall be provided through a third-party insurer. Benefits
      otherwise receivable by the Executive pursuant to this Section 6.1(B) shall
      be
      reduced to the extent benefits of the same type are received by or made
      available to the Executive during the thirty three (33) month period following
      the Executive’s termination of employment (and any such benefits received by or
      made available to the Executive shall be reported to the Company by the
      Executive); provided, however, that the Company shall reimburse the Executive
      for the excess, if any, of the cost of such benefits to the Executive over
      such
      cost immediately prior to the Date of Termination or, if more favorable to
      the
      Executive, the first occurrence of an event or circumstance constituting Good
      Reason.

     

    (C) Notwithstanding
      any provision of any annual or long-term incentive plan to the contrary, the
      Company shall pay to the Executive a lump sum amount, in cash, equal to any
      unpaid incentive compensation which has been allocated or awarded to the
      Executive for a completed fiscal year or other measuring period preceding the
      Date of Termination under any such plan and which, as of the Date of
      Termination, is contingent only upon the continued employment of the Executive
      to a subsequent date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (D) If
      the
      Executive would have become entitled to benefits under the Company’s
      post-retirement health care or life insurance plans, as in effect immediately
      prior to the Date of Termination or, if more favorable to the Executive, as
      in
      effect immediately prior to the first occurrence of an event or circumstance
      constituting Good Reason, had the Executive’s employment terminated at any time
      during the period of thirty three (33) months after the Date of Termination,
      the
      Company shall provide such post-retirement health care or life insurance
      benefits to the Executive and the Executive’s dependents commencing on the later
      of (i) the date on which such coverage would have first become available and
      (ii) the date on which benefits described in subsection (B) of this Section
      6.1
      terminate. 

     

    (E) The
      Company shall provide the Executive with outplacement services suitable to
      the
      Executive’s position for a period of one (1) year or, if earlier, until the
      first acceptance by the Executive of an offer of employment; provided, however,
      that in no event shall the cost for such outplacement services exceed
      $10,000.

     

    6.2 (A) Whether
      or not the Executive becomes entitled to the Severance Payments, if any of
      the
      payments or benefits (including the vesting of options) received or to be
      received by the Executive in connection with a Change in Control or the
      Executive’s termination of employment (whether pursuant to the terms of this
      Agreement or any other plan, arrangement or agreement with the Company, any
      Person whose actions result in a Change in Control or any Person affiliated
      with
      the Company or such Person) (all such payments and benefits, excluding the
      Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be
      subject to the Excise Tax, the Company shall pay to the Executive an additional
      amount (the “Gross-Up Payment”) such that the net amount retained by the
      Executive, after deduction of any Excise Tax on the Total Payments and any
      federal, state and local income and employment taxes and Excise Tax upon the
      Gross-Up Payment, and after taking into account the phase out of itemized
      deductions attributable to the Gross-Up Payment, shall be equal to the Total
      Payments.

     

    (B) For
      purposes of determining whether any of the Total Payments will be subject to
      the
      Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments
      shall be treated as “parachute payments” (within the meaning of section
      280G(b)(2) of the Code) unless, in the opinion of tax counsel (“Tax Counsel”)
      reasonably acceptable to the Executive and selected by the accounting firm
      which
      was, immediately prior to the Change in Control, the Company’s independent
      auditor (the “Auditor”), such payments or benefits (in whole or in part) do not
      constitute parachute payments, including by reason of section 280G(b)(4)(A)
      of
      the Code, (ii) all “excess parachute payments” within the meaning of section
      280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless,
      in
      the opinion of Tax Counsel, such excess parachute payments (in whole or in
      part)
      represent reasonable compensation for services actually rendered (within the
      meaning of section 280G(b)(4)(B) of the Code) in excess of the Base Amount
      allocable to such reasonable compensation, or are otherwise not subject to
      the
      Excise Tax, and (iii) the value of any noncash benefits or any deferred payment
      or benefit shall be determined by the Auditor in accordance with the principles
      of sections 280G(d)(3) and (4) of the Code. For purposes of determining the
      amount of the Gross-Up Payment, the Executive shall be deemed to pay federal
      income tax at the highest marginal rate of federal income taxation in the
      calendar year in which the Gross-Up Payment is to be made and state and local
      income taxes at the highest marginal rate of taxation in the state and locality
      of the Executive’s residence on the Date of Termination (or if there is no Date
      of Termination, then the date on which the Gross-Up Payment is calculated for
      purposes of this Section 6.2), net of the maximum reduction in federal income
      taxes which could be obtained from deduction of such state and local
      taxes.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (C) In
      the
      event that the Excise Tax is finally determined to be less than the amount
      taken
      into account hereunder in calculating the Gross-Up Payment, the Executive shall
      repay to the Company, within five (5) business days following the time that
      the
      amount of such reduction in the Excise Tax is finally determined, the portion
      of
      the Gross-Up Payment attributable to such reduction (plus that portion of the
      Gross-Up Payment attributable to the Excise Tax and federal, state and local
      income and employment taxes imposed on the Gross-Up Payment being repaid by
      the
      Executive), to the extent that such repayment results in a reduction in the
      Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable income
      and wages for purposes of federal, state and local income and employment taxes,
      plus interest on the amount of such repayment at 120% of the rate provided
      in
      section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
      determined to exceed the amount taken into account hereunder in calculating
      the
      Gross-Up Payment (including by reason of any payment the existence or amount
      of
      which cannot be determined at the time of the Gross-Up Payment), the Company
      shall make an additional Gross-Up Payment in respect of such excess (plus any
      interest, penalties or additions payable by the Executive with respect to such
      excess) within five (5) business days following the time that the amount of
      such
      excess is finally determined. The Executive and the Company shall each
      reasonably cooperate with the other in connection with any administrative or
      judicial proceedings concerning the existence or amount of liability for Excise
      Tax with respect to the Total Payments.

     

    (D) Section
      6.2 of this Agreement shall supplant all other provisions for any Gross-Up
      Payment or similar payment in any other agreements, options and arrangements
      between the Company and the Executive.

     

    6.3 The
      payments provided in subsections (A), (C) and (D) of Section 6.1 hereof and
      in
      Section 6.2 hereof shall be made not later than the fifth day following the
      Date
      of Termination (or if there is no Date of Termination, then the date on which
      the Gross-Up Payment is calculated for purposes of Section 6.2 hereof);
      provided, however, that if the amounts of such payments cannot be finally
      determined on or before such day, the Company shall pay to the Executive on
      such
      day an estimate, as determined in good faith by the Executive or, in the case
      of
      payments under Section 6.2 hereof, in accordance with Section 6.2 hereof, of
      the
      minimum amount of such payments to which the Executive is clearly entitled
      and
      shall pay the remainder of such payments (together with interest on the unpaid
      remainder (or on all such payments to the extent the Company fails to make
      such
      payments when due) at 120% of the rate provided in section 1274(b)(2)(B) of
      the
      Code) as soon as the amount thereof can be determined but in no event later
      than
      the thirtieth (30th) day after the Date of Termination. In the event that the
      amount of the estimated payments exceeds the amount subsequently determined
      to
      have been due, such excess shall constitute a loan by the Company to the
      Executive, payable on the fifth (5th) business day after demand by the Company
      (together with interest at 120% of the rate provided in section 1274(b)(2)(B)
      of
      the Code). At the time that payments are made under this Agreement, the Company
      shall provide the Executive with a written statement setting forth the manner
      in
      which such payments were calculated and the basis for such calculations
      including, without limitation, any opinions or other advice the Company has
      received from Tax Counsel, the Auditor or other advisors or consultants (and
      any
      such opinions or advice which are in writing shall be attached to the
      statement).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.4 The
      Company also shall pay to the Executive all legal fees and expenses incurred
      by
      the Executive in disputing in good faith any issue hereunder relating to the
      termination of the Executive’s employment, in seeking in good faith to obtain or
      enforce any benefit or right provided by this Agreement or in connection with
      any tax audit or proceeding to the extent attributable to the application of
      section 4999 of the Code to any payment or benefit provided hereunder. Such
      payments shall be made within five (5) business days after delivery of the
      Executive’s written requests for payment accompanied with such evidence of fees
      and expenses incurred as the Company reasonably may require.

     

    7. Termination
      Procedures and Compensation During Dispute.
      

     

    7.1 Notice
      of Termination.
      After a
      Change in Control and during the Term, any purported termination of the
      Executive’s employment (other than by reason of death) shall be communicated by
      written Notice of Termination from one party hereto to the other party hereto
      in
      accordance with Section 10 hereof. For purposes of this Agreement, a “Notice of
      Termination” shall mean a notice which shall indicate the specific termination
      provision in this Agreement relied upon and shall set forth in reasonable detail
      the facts and circumstances claimed to provide a basis for termination of the
      Executive’s employment under the provision so indicated. Further, a Notice of
      Termination for Cause is required to include a copy of a resolution duly adopted
      by the affirmative vote of not less than three-quarters (3/4) of the entire
      membership of the Board at a meeting of the Board which was called and held
      for
      the purpose of considering such termination (after reasonable notice to the
      Executive and an opportunity for the Executive, together with the Executive’s
      counsel, to be heard before the Board) finding that, in the good faith opinion
      of the Board, the Executive was guilty of conduct set forth in clause (i) or
      (ii) of the definition of Cause herein, and specifying the particulars thereof
      in detail.

     

    7.2 Date
      of Termination.
“Date
      of Termination,” with respect to any purported termination of the Executive’s
      employment after a Change in Control and during the Term, shall mean (i) if
      the
      Executive’s employment is terminated for Disability, thirty (30) days after
      Notice of Termination is given (provided that the Executive shall not have
      returned to the full-time performance of the Executive’s duties during such
      thirty (30) day period), and (ii) if the Executive’s employment is terminated
      for any other reason, the date specified in the Notice of Termination (which,
      in
      the case of a termination by the Company, shall not be less than thirty (30)
      days (except in the case of a termination for Cause) and, in the case of a
      termination by the Executive, shall not be less than fifteen (15) days nor
      more
      than sixty (60) days, respectively, from the date such Notice of Termination
      is
      given).

     

    7.3 Dispute
      Concerning Termination.
      If
      within fifteen (15) days after any Notice of Termination is given, or, if later,
      prior to the Date of Termination (as determined without regard to this Section
      7.3), the party receiving such Notice of Termination notifies the other party
      that a dispute exists concerning the termination, the Date of Termination shall
      be extended until the earlier of (i) the date on which the Term ends or (ii)
      the
      date on which the dispute is finally resolved, either by mutual written
      agreement of the parties or by a final judgment, order or decree of an
      arbitrator or a court of competent jurisdiction (which is not appealable or
      with
      respect to which the time for appeal therefrom has expired and no appeal has
      been perfected); provided, however, that the Date of Termination shall be
      extended by a notice of dispute given by the Executive only if such notice
      is
      given in good faith and the Executive pursues the resolution of such dispute
      with reasonable diligence.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7.4 Compensation
      During Dispute.
      If a
      purported termination occurs following a Change in Control and during the Term
      and the Date of Termination is extended in accordance with Section 7.3 hereof,
      the Company shall continue to pay the Executive the full compensation in effect
      when the notice giving rise to the dispute was given (including, but not limited
      to, salary) and continue the Executive as a participant in all compensation,
      benefit and insurance plans in which the Executive was participating when the
      notice giving rise to the dispute was given, until the Date of Termination,
      as
      determined in accordance with Section 7.3 hereof. Amounts paid under this
      Section 7.4 are in addition to all other amounts due under this Agreement (other
      than those due under Section 5.2 hereof) and shall not be offset against or
      reduce any other amounts due under this Agreement.

     

    8. No
      Mitigation.
      The
      Company agrees that, if the Executive’s employment with the Company terminates
      during the Term, the Executive is not required to seek other employment or
      to
      attempt in any way to reduce any amounts payable to the Executive by the Company
      pursuant to Section 6 hereof or Section 7.4 hereof. Further, the amount of
      any
      payment or benefit provided for in this Agreement (other than Section 6.1(B)
      hereof) shall not be reduced by any compensation earned by the Executive as
      the
      result of employment by another employer, by retirement benefits, by offset
      against any amount claimed to be owed by the Executive to the Company, or
      otherwise.

     

    9. Successors;
      Binding Agreement.

     

    9.1 In
      addition to any obligations imposed by law upon any successor to the Company,
      the Company will require any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise to all or substantially all of the business
      and/or assets of the Company) to expressly assume and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be
      required to perform it if no such succession had taken place. Failure of the
      Company to obtain such assumption and agreement prior to the effectiveness
      of
      any such succession shall be a breach of this Agreement and shall entitle the
      Executive to compensation from the Company in the same amount and on the same
      terms as the Executive would be entitled to hereunder if the Executive were
      to
      terminate the Executive’s employment for Good Reason after a Change in Control,
      except that, for purposes of implementing the foregoing, the date on which
      any
      such succession becomes effective shall be deemed the Date of
      Termination.

     

    9.2 This
      Agreement shall inure to the benefit of and be enforceable by the Executive’s
      personal or legal representatives, executors, administrators, successors, heirs,
      distributees, devisees and legatees. If the Executive shall die while any amount
      would still be payable to the Executive hereunder (other than amounts which,
      by
      their terms, terminate upon the death of the Executive) if the Executive had
      continued to live, all such amounts, unless otherwise provided herein, shall
      be
      paid in accordance with the terms of this Agreement to the executors, personal
      representatives or administrators of the Executive’s estate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10. Notices.
      For the
      purpose of this Agreement, notices and all other communications provided for
      in
      the Agreement shall be in writing and shall be deemed to have been duly given
      when delivered or mailed by United States registered mail, return receipt
      requested, postage prepaid, addressed, if to the Executive, to the address
      inserted below the Executive’s signature on the final page hereof and, if to the
      Company, to the address set forth below, or to such other address as either
      party may have furnished to the other in writing in accordance herewith, except
      that notice of change of address shall be effective only upon actual
      receipt:

     

    
      	
              To
                the Company:

               

              Point.360

              7083
                Hollywood Boulevard,

              Suite
                200

              P.O.
                Box 1830

              Hollywood,
                CA 90028

              Attention:
                President

            

    

    

    11. Miscellaneous.
      No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing and signed by the
      Executive and such officer as may be specifically designated by the Board.
      No
      waiver by either party hereto at any time of any breach by the other party
      hereto of, or of any lack of compliance with, any condition or provision of
      this
      Agreement to be performed by such other party shall be deemed a waiver of
      similar or dissimilar provisions or conditions at the same or at any prior
      or
      subsequent time. This Agreement supersedes any other agreements or
      representations, oral or otherwise, express or implied, with respect to the
      subject matter hereof which have been made by either party, including but not
      limited to the Benefits Agreement entered into between the Executive and the
      Company; provided, however, that this Agreement shall supersede any agreement
      setting forth the terms and conditions of the Executive’s employment with the
      Company only in the event that the Executive’s employment with the Company is
      terminated on or following a Change in Control, by the Company other than for
      Cause or by the Executive for Good Reason. The validity, interpretation,
      construction and performance of this Agreement shall be governed by the laws
      of
      the State of California. All references to sections of the Exchange Act or
      the
      Code shall be deemed also to refer to any successor provisions to such sections.
      Any payments provided for hereunder shall be paid net of any applicable
      withholding required under federal, state or local law and any additional
      withholding to which the Executive has agreed. The obligations of the Company
      and the Executive under this Agreement which by their nature may require either
      partial or total performance after the expiration of the Term (including,
      without limitation, those under Sections 6 and 7 hereof) shall survive such
      expiration.

     

    12. Validity.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect.

     

    13. Counterparts.
      This
      Agreement may be executed in several counterparts, each of which shall be deemed
      to be an original but all of which together will constitute one and the same
      instrument.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    14. Settlement
      of Disputes; Arbitration.

     

    14.1 All
      claims by the Executive for benefits under this Agreement shall be directed
      to
      and determined by the Committee and shall be in writing. Any denial by the
      Committee of a claim for benefits under this Agreement shall be delivered to
      the
      Executive in writing and shall set forth the specific reasons for the denial
      and
      the specific provisions of this Agreement relied upon. The Committee shall
      afford a reasonable opportunity to the Executive for a review of the decision
      denying a claim and shall further allow the Executive to appeal to the Committee
      a decision of the Committee within sixty (60) days after notification by the
      Committee that the Executive’s claim has been denied.

     

    14.2 Any
      further dispute or controversy arising under or in connection with this
      Agreement shall be settled exclusively by arbitration in Los Angeles, California
      in accordance with the rules of the American Arbitration Association then in
      effect; provided, however, that the evidentiary standards set forth in this
      Agreement shall apply. Judgment may be entered on the arbitrator’s award in any
      court having jurisdiction.

     

    Notwithstanding
      any provision of this Agreement to the contrary, the Executive shall be entitled
      to seek specific performance of the Executive’s right to be paid until the Date
      of Termination during the pendency of any dispute or controversy arising under
      or in connection with this Agreement.

     

    15. Definitions.
      For
      purposes of this Agreement, the following terms shall have the meanings
      indicated below: 

     

    (A) “Affiliate”
      shall have the meaning set forth in Rule 12b-2 promulgated under Section 12
      of
      the Exchange Act.

     

    (B) “Auditor”
      shall have the meaning set forth in Section 6.2 hereof.

     

    (C) “Base
      Amount” shall have the meaning set forth in section 280G(b)(3) of the
      Code.

     

    (D) “Beneficial
      Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange
      Act.

     

    (E) “Board”
      shall mean the Board of Directors of the Company.

     

    (F) “Cause”
      for termination by the Company of the Executive’s employment shall mean (i) the
      willful and continued failure by the Executive to substantially perform the
      Executive’s duties with the Company (other than any such failure resulting from
      the Executive’s incapacity due to physical or mental illness or any such actual
      or anticipated failure after the issuance of a Notice of Termination for Good
      Reason by the Executive pursuant to Section 7.1 hereof) that has not been cured
      within 30 days after a written demand for substantial performance is delivered
      to the Executive by the Board, which demand specifically identifies the manner
      in which the Board believes that the Executive has not substantially performed
      the Executive’s duties, or (ii) the willful engaging by the Executive in conduct
      which is demonstrably and materially injurious to the Company or its
      subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii)
      of
      this definition, (x) no act, or failure to act, on the Executive’s part shall be
      deemed “willful” unless done, or omitted to be done, by the Executive not in
      good faith and without reasonable belief that the Executive’s act, or failure to
      act, was in the best interest of the Company and (y) in the event of a dispute
      concerning the application of this provision, no claim by the Company that
      Cause
      exists shall be given effect unless the Company establishes to the Committee
      by
      clear and convincing evidence that Cause exists.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (G) A
“Change
      in Control” shall be deemed to have occurred if an the event of a nature that
      would be required to be reported in response to Item 6(e) of Schedule 14A
      of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
      amended (“Exchange Act”); provided that, without limitation, such a change in
      control shall be deemed to have occurred if (i) a tender offer shall be
      made and consummated for the ownership of 35% or more of the outstanding voting
      securities of the Company, (ii) the Company shall be merged or consolidated
      with another corporation and as result of such merger or consolidation less
      than
      50% of the outstanding voting securities of the surviving or resulting
      corporation shall be owned in the aggregate by the former shareholders of the
      Company, other than affiliates (within the meaning of the Exchange Act) of
      any
      party to such merger or consolidation, as the same shall have existed
      immediately prior to such merger or consolidation, (iii) the Company shall
      sell, lease, exchange or transfer substantially all of its assets to another
      corporation, entity or person which is not a wholly-owned subsidiary,
      (iv) a person (other than Executive), as defined in Sections 13(d) and
      14(d) (as in effect on the date hereof) of the Exchange Act, shall acquire
      35%
      or more of the outstanding voting securities of the Company (whether directly,
      indirectly, beneficially or of record, in a single transaction or a series
      of
      related transactions by one person or more than one person acting in concert),
      or (v) the shareholders of the Company approve a plan or proposal for the
      liquidation or dissolution of the Company.

     

    (H) “Code”
      shall mean the Internal Revenue Code of 1986, as amended from time to
      time.

     

    (I) “Committee”
      shall mean (i) the individuals (not fewer than three in number) who, on the
      date
      six months before a Change in Control, constitute the Compensation Committee
      of
      the Board, plus (ii) in the event that fewer than three individuals are
      available from the group specified in clause (i) above for any reason, such
      individuals as may be appointed by the individual or individuals so available
      (including for this purpose any individual or individuals previously so
      appointed under this clause (ii)).

     

    (J) “Company”
      shall mean Point.360 and, except in determining under Section 15(G) hereof
      whether or not any Change in Control of the Company has occurred, shall include
      any successor to its business and/or assets which assumes and agrees to perform
      this Agreement by operation of law, or otherwise.

     

    (K) “Date
      of
      Termination” shall have the meaning set forth in Section 7.2
      hereof.

     

    (L) “Disability”
      shall be deemed the reason for the termination by the Company of the Executive’s
      employment, if, as a result of the Executive’s incapacity due to physical or
      mental illness, the Executive shall have been absent from the full-time
      performance of the Executive’s duties with the Company for a period of six (6)
      consecutive months, the Company shall have given the Executive a Notice of
      Termination for Disability, and, within thirty (30) days after such Notice
      of
      Termination is given, the Executive shall not have returned to the full-time
      performance of the Executive’s duties.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (M) “Exchange
      Act” shall mean the Securities Exchange Act of 1934, as amended from time to
      time.

     

    (N) “Excise
      Tax” shall mean any excise tax imposed under section 4999 of the
      Code.

     

    (O) “Executive”
      shall mean the individual named in the first paragraph of this
      Agreement.

     

    (P) “Good
      Reason” for termination by the Executive of the Executive’s employment shall
      mean the occurrence (without the Executive’s express written consent) after any
      Change in Control, or prior to a Change in Control under the circumstances
      described in clauses (ii) and (iii) of the second sentence of Section 6.1 hereof
      (treating all references in paragraphs (I) through (VII) below to a “Change in
      Control” as references to a “Potential Change in Control”), of any one of the
      following acts by the Company, or failures by the Company to act, unless, in
      the
      case of any act or failure to act described in paragraph (i), (v), (vi) or
      (vii)
      below, such act or failure to act is corrected prior to the Date of Termination
      specified in the Notice of Termination given in respect thereof: 

     

    (i) the
      assignment to the Executive of any duties inconsistent with the Executive’s
      status as a senior executive officer of the Company or a substantial adverse
      alteration in the nature or status of the Executive’s responsibilities from
      those in effect immediately prior to the Change in Control including,

     

    (ii) a
      reduction by the Company in the Executive’s annual base salary as in effect on
      the date hereof or as the same may be increased from time to time;

     

    (iii) the
      relocation of the Executive’s principal place of employment to a location more
      than 50 miles from the Executive’s principal place of employment immediately
      prior to the Change in Control or the Company’s requiring the Executive to be
      based anywhere other than such principal place of employment (or permitted
      relocation thereof) except for required travel on the Company’s business to an
      extent substantially consistent with the Executive’s present business travel
      obligations;

     

    (iv) the
      failure by the Company to pay to the Executive any portion of the Executive’s
      current compensation or to pay to the Executive any portion of an installment
      of
      deferred compensation under any deferred compensation program of the Company,
      within seven (7) days of the date such compensation is due;

     

    (v) the
      failure by the Company to continue in effect any compensation plan in which
      the
      Executive participates immediately prior to the Change in Control which is
      material to the Executive’s total compensation, unless an equitable arrangement
      (embodied in an ongoing substitute or alternative plan) has been made with
      respect to such plan, or the failure by the Company to continue the Executive’s
      participation therein (or in such substitute or alternative plan) on a basis
      not
      materially less favorable, both in terms of the amount or timing of payment
      of
      benefits provided and the level of the Executive’s participation relative to
      other participants, as existed immediately prior to the Change in
      Control;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (vi) the
      failure by the Company to continue to provide the Executive with benefits
      substantially similar to those enjoyed by the Executive under any of the
      Company’s pension, savings, life insurance, medical, health and accident, or
      disability plans in which the Executive was participating immediately prior
      to
      the Change in Control, the taking of any other action by the Company which
      would
      directly or indirectly materially reduce any of such benefits or deprive the
      Executive of any material fringe benefit enjoyed by the Executive at the time
      of
      the Change in Control, or the failure by the Company to provide the Executive
      with the number of paid vacation days to which the Executive is entitled on
      the
      basis of years of service with the Company in accordance with the Company’s
      normal vacation policy in effect at the time of the Change in Control;
      or

     

    (vii) any
      purported termination of the Executive’s employment which is not effected
      pursuant to a Notice of Termination satisfying the requirements of
      Section 7.1 hereof; for purposes of this Agreement, no such purported
      termination shall be effective. The Executive’s right to terminate the
      Executive’s employment for Good Reason shall not be affected by the Executive’s
      incapacity due to physical or mental illness. The Executive’s continued
      employment shall not constitute consent to, or a waiver of rights with respect
      to, any act or failure to act constituting Good Reason hereunder. For purposes
      of any determination regarding the existence of Good Reason, any claim by the
      Executive that Good Reason exists shall be presumed to be correct unless the
      Company establishes to the Committee by clear and convincing evidence that
      Good
      Reason does not exist.

     

    (Q) “Gross-Up
      Payment” shall have the meaning set forth in Section 6.2 hereof.

     

    (R) “Notice
      of Termination” shall have the meaning set forth in Section 7.1
      hereof.

     

    (S) “Pension
      Plan” shall mean (i) any tax-qualified, supplemental or excess defined benefit
      pension plan maintained by the Company and any other defined benefit plan or
      agreement entered into between the Executive and the Company which is designed
      to provide the Executive with supplemental retirement benefits and (ii)
      tax-qualified, supplemental or excess defined contribution plan maintained
      by
      the Company and any other defined contribution plan or agreement entered into
      between the Executive and the Company.

     

    (T) “Person”
      shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
      and used in Sections 13(d) and 14(d) thereof, except that such term shall not
      include (i) the Company or any of its subsidiaries, (ii) a trustee or other
      fiduciary holding securities under an employee benefit plan of the Company
      or
      any of its Affiliates, (iii) an underwriter temporarily holding securities
      pursuant to an offering of such securities, or (iv) a corporation owned,
      directly or indirectly, by the stockholders of the Company in substantially
      the
      same proportions as their ownership of stock of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (U) “Potential
      Change in Control” shall be deemed to have occurred if the event set forth in
      any one of the following paragraphs shall have occurred:

     

    (i) the
      Company enters into an agreement, the consummation of which would result in
      the
      occurrence of a Change in Control;

     

    (ii) the
      Company or any Person publicly announces an intention to take or to consider
      taking actions which, if consummated, would constitute a Change in
      Control;

     

    (iii) any
      Person becomes the Beneficial Owner, directly or indirectly, of securities
      of
      the Company representing 10% or more of either the then outstanding shares
      of
      common stock of the Company or the combined voting power of the Company’s then
      outstanding securities (not including in the securities beneficially owned
      by
      such Person any securities acquired directly from the Company or its
      affiliates); or

     

    (iv) the
      Board
      adopts a resolution to the effect that, for purposes of this Agreement, a
      Potential Change in Control has occurred.

     

    (V) “Retirement”
      shall be deemed the reason for the termination by the Executive of the
      Executive’s employment if such employment is terminated in accordance with the
      Company’s retirement policy, including early retirement, generally applicable to
      its salaried employees.

     

    (W) “Severance
      Payments” shall have the meaning set forth in Section 6.1 hereof.

     

    (X) “Tax
      Counsel” shall have the meaning set forth in Section 6.2 hereof.

     

    (Y) “Term”
      shall mean the period of time described in Section 2 hereof (including any
      extension, continuation or termination described therein).

     

    (Z) “Total
      Payments” shall mean those payments so described in Section 6.2
      hereof.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the date first
      above written.

     

    
      	 	
              POINT.360

               

               

            
	 	
              By: __________________________________________________

              Name:

              Title:

               

              _____________________________________________________

            
	
               

               

              Address:

            	
              Haig
                Bagerdjian

               

              
                _____________________________________________________

              

            
	 	
               

              
                _____________________________________________________ASSET
      PURCHASE AGREEMENT

     

    This
      Asset Purchase Agreement (the “Agreement”)
      is
      entered into as of March 7, 2007, by and among Point.360, a California
      corporation (“Buyer”),
      Eden
      FX., a California corporation (“Seller”),
      Mark
      Miller, as an individual, and John Gross, as an individual (the individuals
      shall hereinafter be collectively referred to as “Shareholders”).
      

     

    RECITAL

     

    Seller
      is
      engaged in the business of 3D animation for the broadcast and film industries.
      Buyer desires to purchase, and Seller and Shareholders desire to sell to Buyer,
      substantially all of the assets and goodwill of Seller upon the terms and
      conditions of this Agreement. Buyer’s and Seller’s intent is that Buyer will
      purchase Seller’s goodwill and only the assets that are identified in schedules
      to this Agreement in exchange for cash, other potential consideration and the
      assumption of only those liabilities of Seller specifically set forth
      herein.

     

    NOW,
      THEREFORE, in
      consideration of the foregoing and other good and valuable consideration, the
      receipt of which hereby is acknowledged, Buyer, Seller and Shareholders hereby
      agree as follows:

     

    ARTICLE
      1

    PURCHASE
      AND SALE OF ASSETS

     

    1.1  Purchased
      Assets.
      Subject
      to the terms and conditions of this Agreement, at the Closing (as defined in
      Section 5.1 below), Buyer agrees to purchase from Seller, and Seller agrees
      to
      sell and convey to Buyer, good and marketable title and interest in and to
      Seller’s goodwill and substantially all of Seller’s assets, including without
      limitation, those assets listed in Schedule 1.1, (but excluding those accounts
      receivable, personal property of Seller or Shareholders and other assets listed
      in Schedule 1.2), including any and all rights to the name “Eden FX”
(collectively, the “Purchased
      Assets”),
      provided that the Purchased Assets shall be transferred to Buyer free and clear
      of all liens, claims, security interests and other encumbrances. It is
      understood that the Purchased Assets will be operated as a stand alone,
      independent division of Buyer (“the Division”), the assets, liabilities and
      employees of which may vary from time to time.

     

    1.2  No
      Other Assets Purchased by Buyer; Accounts Receivable and Accounts
      Payable.
      Buyer
      has not agreed to purchase (and under no circumstances shall be deemed to have
      purchased) any of Seller’s assets that are listed in Schedule 1.2; however,
      Buyer will purchase Seller’s goodwill. The following sets forth the parties’
agreement with respect to accounts receivable and accounts payable:

     

    (a)  The
      Purchased Assets do not include accounts receivable and loans receivable of
      Seller to the extent the goods and services or loans they relate to have been
      provided to the customer or debtor on or before the Closing Date (the “Retained
      Receivables”). The Purchased Assets do include accounts receivable of the Seller
      to the extent the goods and services they relate to have not been provided
      to
      the customer on or after the Closing Date (the “Transferred
      Receivables”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  Buyer
      shall initially assume responsibility for collecting all Receivables (the
      Retained Receivables and Transferred Receivables).

     

    (c)  Seller
      and Buyer shall cooperate in the collection of the Retained Receivables and
      Transferred Receivables, and in the event Seller receives payment of any
      Transferred Receivables, Seller shall promptly remit the same to Buyer, and
      in
      the event Buyer receives payment of any Retained Receivables, Buyer shall
      promptly remit the same to Seller.

     

    (d)  Payments
      from a customer shall be allocated to the work order being paid. Each of Seller
      and Buyer shall provide an accounting to the other, in reasonable detail,
      showing the amount of Retained Receivables and Transferred Receivables received
      by each, on the request of the other, with copies of all applicable back-up
      and
      documentation.

     

    (e)  Seller
      shall be responsible for the payment of, and shall timely pay, accounts payable
      and accrued expenses for services performed prior to the Closing Date (“Prior
      Costs”). To the extent that such Prior Costs exceed Retained Receivables, Seller
      shall pay Buyer the difference in cash.

     

    (f)  Schedule
      1.2(f) contains a complete and accurate list of Retained Receivables, accounts
      payables of Seller and Prior Costs of Seller as of March 6, 2007.

     

    1.3  Limited
      Assumption of Liabilities.
      With
      the
      exception of those certain liabilities more particularly described in Schedule
      1.3 attached hereto, Buyer shall not assume or be liable for any debts,
      obligations or liabilities of Seller or Shareholders, whether related to the
      Purchased Assets or to Seller’s other assets and whether known or unknown, and
      Seller shall indemnify Buyer from and against all such debts, obligations and
      liabilities not described in Schedule 1.3. Without limiting the generality
      of
      the preceding sentence, Buyer shall not assume or be liable for (i) any tax
      liabilities of Seller related to the operation by Seller at any time of its
      business, (ii) any tax liabilities assessed on or related to the Purchased
      Assets for the period prior to Closing; (iii) any tax liabilities assessed
      on or
      related to Seller’s other assets for the period prior to and after the Closing,
      (iv) any other liabilities of Seller with respect to the period prior to the
      Closing, or (v) any liabilities of Seller to its employees with respect to
      the
      period prior to or after the Closing. At the Closing, Buyer shall assume,
      discharge and perform and be solely liable for the liabilities described in
      Schedule 1.3 attached hereto (the “Assumed Liabilities”).

     

    1.4  Purchase
      Price.
      The
      purchase price for the Purchased Assets shall be $2,158,133 minus $358,124.75
      (the amount of debt set forth on Schedule 1.3 assumed by Buyer), to be paid
      at
      Closing, plus any earnouts paid pursuant to Section 1.5 hereof (collectively,
      the “Purchase Price”). The Purchase Price shall be paid by bank wire of
      immediately available funds. 

     

    1.5  Earnout.
      Provided the actual EBITDA (i.e., earnings before interest, taxes, depreciation
      and amortization as determined under generally accepted accounting principles,
      but subject to adjustment as provided in this Agreement) of the Division exceeds
      70% of the following EBITDA targets of the Division in connection with the
      period from Closing through December 31, 2007, or the calendar years 2008
      or 2009, as applicable, Buyer shall make earnout payments to Seller within
      sixty
      (60) days after the end of any such calendar year as follows:

    
       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    (a)  With
      respect to calendar year 2007, $685,000 (“2007 Target Earnout”), if the
      Division’s actual EBITDA for 2007 (“2007 Actual EBITDA”) equals $951,000 (“2007
      Target EBITDA”). Notwithstanding any other provision of this Section 1.5, it is
      agreed that 2007 Target Earnout and 2007 Target EBITDA will be adjusted to
      amounts equal to the numbers in the preceding sentence multiplied by a fraction,
      the numerator of which shall be the number of days between the Closing Date
      and
      December 31, 2007, and the denominator of which is 365. 2007 Actual EBITDA
      will
      be EBITDA of the Division for the period from the Closing Date to December
      31,
      2007.

     

    (b)  With
      respect to calendar year 2008, $922,000 (“Year 2008 Target Earnout”), if the
      Division’s actual EBITDA for 2008 (“Year 2008 Actual EBITDA”) equals $1,279,000
      (“2008 Target EBITDA”);

     

    (c)  With
      respect to calendar year 2009, $1,185,000 (“2009 Target Earnout”), if the
      Division’s actual EBITDA for 2009 (“2009 Actual EBITDA”) equals $1,644,000
      (“2009 Target EBITDA”).

     

    (d)  If
      the
      Division achieves more than 70% but less than 100% of any Target EBITDA for
      Years 2007, 2008 or 2009, the earnout payments payable to Seller in connection
      with such year shall be computed by multiplying the applicable Target Earnout
      by
      a fraction, the numerator of which is the amount by which the applicable actual
      EBITDA exceeds 70% of the applicable Target EBITDA and the denominator of which
      is the difference between the applicable Target EBITDA and 70% of the applicable
      Target EBITDA. For illustration purposes only, if hypothetically year 2007
      actual EBITDA is $800,000 (before any adjustment for proration) the total
      earnout payment for 2007 would be computed as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	 	
                2007 Target
                  Earnout

              	 	
                 

              	
                
                  $685,000

                

              	 	 	
                (A)

              	
                 

              
	 	 	 	 	 	 	 	 	 
	 	
                2007 Target
                  EBITDA

              	 	
                 

              	
                $951,000

              	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                Numerator:

              	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                2007 Actual
                  EBITDA

              	 	
                 

              	
                $800,000

              	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                70%
                  of 2007 Target EBITDA

              	 	 	
                (666,000

              	
                )

              	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                Difference

              	 	
                 

              	
                $135,000

              	 	 	
                (B)

              	
                 

              
	 	 	 	 	 	 	 	 	 
	 	
                Denominator:

              	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                2007 Target
                  EBITDA

              	 	
                 

              	
                $951,000

              	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                70%
                  of 2007 Target EBITDA

              	 	 	
                (666,000

              	
                )

              	 	 	 
	 	 	 	 	 	 	 	 	 
	 	
                Difference

              	 	
                 

              	
                $285,000

              	 	 	
                (C)

              	
                 

              
	 	 	 	 	 	 	 	 	 
	 	
                Fraction
                  (B divided by C)

              	 	 	
                47.02

              	
                %

              	 	
                (D)

              	
                 

              
	 	 	 	 	 	 	 	 	 
	 	
                Earnout
                  To Be Paid (A x D)

              	 	
                 

              	
                $322,000

              	 	 	 	 

      

    

     

    (e)  No
      earnout payments shall be made with respect to 2007, 2008 or 2009 for any such
      period in which the Division achieves 70% or less of Target EBITDA for 2007,
      2008 or 2009, respectively.

     

    (f)  If
      the
      Division achieves more than 100% of Target EBITDA for years 2007, 2008 or 2009,
      total earnout payment for such year shall be equal to the sum of the Target
      Earnout for such year plus 80% of the difference between the actual EBITDA
      achieved and the Target EBITDA.

     

    (g)  In
      the
      event the determination of the earnout for any applicable period has not become
      final within sixty (60) days from the end of any applicable period by reason
      of
      the implementation by Seller of the procedures for objecting to a Determination
      set forth in Section 1.7, then the amount of the earnout set forth in the
      Determination shall be paid within such sixty (60)-day period. The balance
      of
      the earnout, if any, shall be paid to Seller or refunded to Buyer, as
      applicable, within thirty (30) days after the Determination becomes
      final.

     

    (h)  Seller
      and Buyer shall act in good faith with respect to operations of the Division
      during the Earnout Period, as defined in Section 1.6 hereof, and Buyer shall
      use
      reasonably commercial efforts consistent with its past practices and policies
      to
      not negatively impact the earnout. 

     

    (i)  In
      the
      event that any Shareholder materially breaches the Noncompetition Agreement
      dated as of the date hereof to which he is a party (the “Noncompetition
      Agreement”) and, in the event such breach is curable, fails to cure such breach
      within 10 days after receipt of written notice of such breach from Buyer, Seller
      shall not be entitled to 50% of any further earnout payments pursuant to this
      Agreement. In the event that both Shareholders materially breach the
      Noncompetition Agreements, and, in the event such breach is curable, fails
      to
      cure such breach within 10 days after receipt of written notice of such breach
      from Buyer, Seller shall not be entitled to any further earnout payments
      pursuant to this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (j)  In
      determining actual EBITDA for purposes of the earnout, Buyer’s costs for
      accounting, legal and administrative functions shall be charged to the Division
      only to the extent such services are specifically provided to the Division
      as
      set forth in Section 1.6 hereof. Buyer shall not charge or allocate any other
      overhead of Buyer to the Division for the purpose of calculating
      EBITDA.

     

    1.6  Conduct
      of Business During Earnout Period.
      Immediately after the Closing, Buyer will form the Division, comprised of the
      Purchased Assets and the employees of Seller who will become employees of Buyer.
      Buyer shall make offers of employment to all employees of Seller (except for
      Mark Miller and John Gross whose services will be rendered pursuant to the
      terms
      of a Loan Out Agreement to be entered into between Seller and Buyer at the
      Closing). Such employees shall be offered at least the same compensation they
      are presently receiving and shall receive credit for time served as employees
      of
      Seller in determining their employee benefits under Buyer’s employee benefit
      plans. During the period commencing on the Closing Date and ending on
      December 31, 2009 (the “Earnout Period”):

     

    (a)  The
      Division shall be operated as a stand alone, independent division of Buyer.
      Buyer shall continue to conduct its business in the ordinary course of business,
      and the Division shall be subject to Buyer’s standard reporting
      requirements.

     

    (b)  Without
      limiting the generality of Section 1.6(a) hereof, Buyer agrees to provide the
      Division with at least the financial resources described in the pro-forma budget
      attached hereto as Schedule 1.6(b) and the capital investments described in
      the
      capital expenditures budget attached to such pro-forma budget (collectively,
      the
“Budget”). The Division will be allocated interest based upon the book value of
      its fixed assets compared to Buyer’s fixed assets; however, such interest
      allocation shall not affect the calculation of EBITDA.

     

    (c)  The
      Division will be charged with the expenses relating to employee benefit plans,
      including health, 401(k) matching, life insurance, vacation, sick pay, employer
      payroll taxes and other costs, relating to the Division’s
      employees.

     

    (d)  Except
      as
      otherwise provided herein, Buyer shall not charge or allocate any overhead
      of
      Buyer to the Division for the purpose of calculating EBITDA.

     

    (e)  Buyer
      may
      provide specific support services to the Division, such as engineering or
      information technology at the rates agreed to between Seller and Buyer. The
      Division may provide support services to Buyer at rates to be agreed to between
      Seller and Buyer.

     

    (f)  Buyer
      shall provide accounting and administrative services to the Division including,
      but not limited to, the provision of monthly financial statements within thirty
      (30) business days of any month other than December (for December the monthly
      financial statements shall be provided within forty-five (45) business days).
      For the purpose of this Agreement, cost of sales and general and administrative
      expenses directly related to the Division’s operations shall be determined in
      accordance with generally accepted accounting principles (“GAAP”). Buyer shall
      maintain a separate set of books for the Division. The Division shall also
      be
      charged for actual rent and other identifiable expenses consumed by the Division
      and shall be allocated a pro-rata portion of other expenses directly consumed
      by
      the Division (e.g., billing, human resources, payroll administration, credit
      and
      collection, and general accounting, etc.). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g)  Pursuant
      to the Loan Out Agreement, Mark Miller and John Gross will be responsible for
      the day-to-day operations of the Division, including the Budget, subject to
      the
      senior management and Board of Directors of Buyer. Buyer agrees that the working
      conditions of the Division will be substantially the same as the working
      conditions of Seller in accordance with Seller's past practices and Buyer
      acknowledges that the personnel of Seller are talent that work essentially
      on a
      project basis and that past practices with respect to work hours, vacation,
      time
      off and comp time will be continued.

     

    1.7  Earnout
      Determination.
      As soon
      as practical after December 31 of each year during each Earnout Period, but
      in
      no event later than sixty (60) days after Buyer shall have received from the
      Division all information, books and records reasonably requested in order to
      make an EBITDA calculation, the Buyer shall prepare a statement of the EBITDA
      of
      the Division for each period of the earnout, prepared in accordance with GAAP
      (the “Determination”). If Seller does not agree that such Determination
      correctly states EBITDA of the Division for the relevant period, Seller shall
      promptly (but not later than thirty (30) days after delivery of the
      Determination) give written notice to Buyer of any exception thereto. If the
      Seller and the Buyer reconcile their differences, the EBITDA for such period
      shall be adjusted accordingly and shall thereupon become final and conclusive
      upon all the parties hereto. If Seller and the Buyer are unable to reconcile
      their differences in writing within thirty (30) days after written notice of
      the
      exceptions is delivered to the Buyer, the items in dispute shall be submitted
      to
      a mutually acceptable accounting firm for final determination (the “Determining
      Accountants”) and the EBITDA shall be deemed adjusted in accordance with the
      determination of the Determining Accountants and shall become final and
      conclusive upon all parties hereto. The Determining Accountants shall consider
      only the items in dispute and shall be instructed to act within thirty (30)
      days
      (or such longer period as Seller and the Buyer may agree) to resolve all claims
      and dispute. If Seller does not give notice of any exception within thirty
      (30)
      days after the delivery of the Determination, or if Seller gives written notice
      of its acceptance of the Determination prior to the end of such thirty (30)
      day
      period, the EBITDA calculations set forth in the Determination shall thereupon
      become final and conclusive.

     

    (a)  The
      Determining Accountants shall determine the party (i.e., the Buyer or Seller
      as
      the case may be) whose asserted position as to the EBITDA for the period under
      examination before the Determining Accountants is furthest from the
      determination of EBITDA by the Determining Accountants, which non-prevailing
      party shall pay the reasonable fees and expenses of the Determining Accountants.
      

     

    (b)  In
      the
      event the parties are unable to agree upon a mutually acceptable accounting
      firm
      to act as Determining Accountant, either Seller or Buyer may request that the
      Determining Accountant be selected by JAMS. Seller and Buyer shall each
      designate up to three accounting firms. JAMS shall select one of such accounting
      firms to act as the Determining Accountants. To the extent consistent with
      the
      foregoing, and the limited role of JAMS, the Streamlined Arbitration Rules
      and
      Procedures of JAMS shall be applicable. In the first instance, each party shall
      pay one-half (1/2) of the fees and expenses of JAMS. The non-prevailing party,
      as determined pursuant to Subsection 1.7(a) shall reimburse the other party
      for
      such fees and expenses (including JAMS) paid by such other party upon delivery
      of the Determination by the Determining Accountants.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.8  Taxes.
      Seller
      and Buyer shall each be liable for the payment of 50% of any and all sales
      and
      use taxes arising out of the transfer of the Purchased Assets and Seller shall
      be liable for all other taxes related to the Purchased Assets with respect
      to
      the period prior to the Closing.

     

    1.9  Relocation
      of the Division.
      In the
      event that Buyer relocates the Division to Buyer’s existing WoodHolly facility
      in Hollywood, California, Buyer shall pay all costs and expenses of the
      relocation and build-out of such facility (including infrastructure, cabling,
      signage, etc.), including without limitation, the cost for movers and tenant
      improvements to such facility, and the Division’s resulting rent expense shall
      not exceed the square foot charge contained in Buyer’s current lease or as such
      lease may be extended. To the extent Buyer relocates the Division to a location
      other than the WoodHolly facility, Buyer shall pay all moving costs in
      connection with such relocation, and the Division shall pay the lease costs
      for
      such location.

     

    1.10  Allocation
      of Purchase Price.
      The
      Purchase Price shall be allocated among the Purchased Assets as set forth in
      Schedule 1.10 hereof, which has been arrived at by arm’s length negotiation as
      required by Section 1060 of the Code and the Treasury regulations promulgated
      thereunder. Buyer and Seller shall (i) timely file all forms and tax returns
      required to be filed in connection with such allocation, and (ii) prepare and
      file tax returns on a basis consistent with such allocation. Seller and Buyer
      hereby agree to allocate $20,000 to the Noncompetition Agreements. 

     

    ARTICLE
      2

    SELLER’S
      AND SHAREHOLDERS’ REPRESENTATIONS AND WARRANTIES 

     

    Seller
      and each Shareholder, jointly and severally, hereby represent and warrant to
      Buyer as follows:

     

    2.1  Organization
      and Good Standing of Seller.
      Seller
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of California. 

     

    2.2  Capitalization
      of Seller.
      The
      percentage ownership interest in Seller held by each Shareholder, is listed
      in
      Schedule 2.2 attached hereto. 

     

    2.3  Powers.
      Seller
      has and holds the appropriate right and power, and all licenses, permits,
      authorizations and approvals (governmental or otherwise), necessary to entitle
      it to use its name and to own the Purchased Assets.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.4  Authority.
      Seller
      has the full right, power and authority to execute and deliver this Agreement
      and to consummate the transactions contemplated hereby. All acts and other
      proceedings required to be taken by Seller in order to enable it to carry out
      this Agreement and the transactions contemplated hereby have been taken.
      Shareholders have approved in writing Seller’s execution and delivery of this
      Agreement and consummation of the transactions contemplated hereby.

     

    2.5  Binding
      Effect.
      This
      Agreement has been duly executed and delivered by Seller and Shareholders and
      constitutes a legal, valid and binding obligation of Seller and Shareholders,
      enforceable in accordance with its terms, except as enforceability may be
      limited by applicable bankruptcy, insolvency and other similar laws affecting
      the enforcement of creditors’ rights generally, general equity principles and
      the discretion of courts in granting equitable remedies.

     

    2.6  No
      Breach.
      Neither
      the execution and delivery of this Agreement nor the consummation of any
      transaction contemplated hereby will (i) violate any law, regulation, judgment
      or order applicable to Seller, (ii) result in the acceleration of obligations,
      breach or termination of, or constitute a default under, any operating
      agreement, loan agreement, articles of organization, other charter document,
      lease, deed of trust or other agreement to which Seller is subject, or (iii)
      result in the creation of any lien or other encumbrance upon any of the
      Purchased Assets, except that the consent of (a) Technicolor Creative Services,
      the sublessor under the Sublease between sublessor and Seller, (b) the lessors
      of equipment leased or rented by Seller, (c) the licensors of third party
      software used by Seller (e.g., Microsoft) and (d) Sony Pictures Imageworks
      under
      the Independent Contractor Deal Memorandum dated February 15, 2007 is required
      but has not been sought nor obtained. To Seller's and Shareholder's knowledge,
      there are no defaults under the contracts to which Seller is a party (except
      for
      the uncashed rent checks issued to Tehnicolor Creative Services as described
      in
      Schedule 1.3) and Seller expects such contracts to continue after the Closing.
      

     

    2.7  Consents.
      Neither
      the execution and delivery of this Agreement nor the consummation of any
      transaction contemplated hereby requires Seller to obtain any consent, permit
      or
      approval, or to make any filing or registration, under any law, regulation,
      judgment or order applicable to Seller or under any lease, deed of trust or
      other agreement to which Seller is subject, except that the consent of (a)
      Technicolor Creative Services, the sublessor under the Sublease between
      sublessor and Seller, (b) the lessors of equipment leased or rented by Seller,
      (c) the licensors of third party software used by Seller (e.g., Microsoft)
      and
      (d) Sony Pictures Imageworks under the Independent Contractor Deal Memorandum
      dated February 15, 2007 is required but has not been sought nor obtained.

     

    2.8  Charter
      Documents.
      Schedule
      2.8 is a copy of (i) the Articles of Incorporation of Seller, as amended to
      date, certified as true, correct and complete by the Secretary of State of
      California, and (ii) the Bylaws of Seller, as amended to date, certified as
      true, correct and complete by a duly authorized officer of Seller. 

     

    2.9  Interests
      of Shareholders.
      No
      Shareholder of Seller or any relative of any Shareholder of Seller has any
      direct or indirect ownership interest in any of the Purchased Assets (other
      than
      solely by reason of the Shareholder’s ownership interest in
      Seller).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.10  Ownership
      and Use of Assets.
      Seller
      is the lawful owner of, and has the right to use and transfer to Buyer, the
      Purchased Assets; Seller owns each of the Purchased Assets free and clear of
      all
      liens, security interests or other claims or encumbrances; the delivery to
      Buyer
      of the instruments of transfer of ownership contemplated by this Agreement
      will
      vest good and marketable title to the Purchased Assets in Buyer, free and clear
      of all liens, security interests and other claims and encumbrances; and the
      Purchased Assets that consist of machinery, equipment or other tangible personal
      property or fixtures will be free of material defects, commercially usable
      and
      in good operating condition and repair. The leased or rented equipment of Seller
      is subject to the rights of the lessors/owners of such equipment.

     

    2.11  Litigation.
      Except
      as
      described in Schedule 2.11 attached hereto, there is no litigation, arbitration,
      investigation or other proceeding pending or, to the best knowledge of
      Shareholders, threatened against Seller or any of the Purchased
      Assets.

     

    2.12  Compliance
      with Laws.
      To
      the
      best knowledge of Shareholders, Seller is in compliance with all applicable
      statutes, regulations, ordinances and other laws pertaining to the Purchased
      Assets. No claim has been made to Seller by any governmental authority (and
      no
      such claim is anticipated) to the effect that a license, permit, certificate
      or
      authorization (which has not promptly thereafter been obtained) is required
      with
      respect to the Purchased Assets.

     

    2.13  Environmental
      Matters.
      All
      operations and activities of Seller with respect to the Purchased Assets have
      been in all material respects in compliance with all state, federal and local
      laws and regulations and any and all permits or authorizations governing, or
      in
      any way relating to, the generation, handling, manufacturing, treatment,
      storage, use, transportation, spillage, leakage, dumping, discharge, emission,
      release or disposal (whether accidental or intentional) of any toxic or
      hazardous substances, materials or wastes, any petroleum or oil or any pollutant
      (“Hazardous
      Substances”).
      Seller has not received any written notice of claims or actions pending or
      threatened against it by any governmental entity or agency or any person
      relating to Hazardous Substances.

     

    2.14  Proprietary
      Information.
      Schedule
      2.14 attached hereto sets forth a list of all United States and foreign
      copyrights, service marks, trademarks, trademark applications, trade names,
      logos, patents, patent applications, licenses and royalty rights that relate
      to
      the Purchased Assets and in which Seller possesses an interest (collectively,
      the “Proprietary
      Rights”).
      Except as described in Schedule 2.14: (i) there are no assignments, licenses
      or
      sublicenses with respect to any of the Proprietary Rights; (ii) there are no
      pending or, to the best knowledge of Shareholders, threatened claims by any
      person with respect to Seller’s use of the Proprietary Rights; (iii) the
      Proprietary Rights are in good standing and are freely transferable to Buyer;
      and (iv) to the best knowledge of Shareholders, the Proprietary Rights do not
      infringe on the rights of any other person.

     

    2.15  Finders
      and Brokers.
      No
      person
      has acted as a finder, broker or other intermediary on behalf of Seller or
      Shareholders in connection with this Agreement. No person is entitled to any
      broker’s or finder’s fee or similar fee with respect to this Agreement or such
      transactions as a result of actions taken by Seller or
      Shareholders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.16  Exclusivity.
      Seller
      shall not, through the Closing Date, negotiate with any other party for the
      sale
      of the Purchased Assets and shall not have entered or enter into any
      understanding about such a sale, whether binding or not. Unless this Agreement
      is first terminated, Seller shall not negotiate for the sale of or offer to
      sell
      the Purchased Assets to any other party without Buyer’s prior written consent.
      Through the Closing Date, Seller shall promptly notify Buyer if Seller is
      contacted by any person or group regarding a possible sale of the Purchased
      Assets.

     

    2.17  Accuracy
      and Completeness.
      No
      representation or warranty of Seller or Shareholders in this Agreement or in
      any
      schedule, exhibit, agreement or document delivered pursuant hereto contains,
      or
      will contain, any untrue statement of a material fact or omits, or will omit,
      to
      state a material fact necessary to make the statements contained therein, in
      light of the circumstances under which they are made, not
      misleading.

     

    2.18  EBITDA.
      Schedule
      2.18 is Seller’s income statement and a compilation of Seller’s EBITDA for the
      12 months ended December 31, 2006. Schedule 2.18: (i) was prepared from the
      books and records of Seller, presents fairly in all material respects, the
      operations and EBITDA of Seller, (ii) is in accordance with GAAP, and (iii)
      reflects the consistent application of such accounting principles throughout
      the
      12 month period presented.

     

    2.19  No
      Other Representations or Warranties.
      EXECPT
      AS SET FORTH IN THIS ARTICLE 2, (a) SELLER AND SHAREHOLDERS MAKE NO OTHER
      REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ALL OF WHICH
      ARE
      HEREBY DISCLAIMED, INCLUDING, WITHOUT LIMITATION, WARRANTIES REGARDING
      MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE,
      SUITABILITY, DURABILITY, CONDITION, QUALITY, OR ANY OTHER CHARACTERISTIC, AND
      (b) BUYER TAKES THE PURCHASED ASSETS AND ASSUMED LIABILITIES “AS IS,” “WHERE IS”
AND “WITH ALL FAULTS.”

     

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    Buyer
      represents and warrants to Seller as follows:

     

    3.1  Organization
      and Good Standing.
      Buyer
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of California. 

     

    3.2  Corporate
      Powers.
      Buyer
      has
      and holds the corporate right and power, and all licenses, permits,
      authorizations and approvals (governmental or otherwise), necessary to entitle
      it to use its corporate name, to own and operate its properties and to carry
      on
      its business as such business exists as of the date hereof.

     

    3.3  Authority.
      Buyer
      has
      the full right, power and authority to execute and deliver this Agreement and
      to
      consummate the transactions contemplated hereby. All acts and other proceedings
      required to be taken by Buyer in order to enable it to carry out this Agreement
      and the transactions contemplated hereby have been taken.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.4  Binding
      Effect.
      This
      Agreement has been duly executed and delivered by Buyer and constitutes its
      legal, valid and binding obligation, enforceable in accordance with its
      terms.

     

    3.5  Consents.
      Neither
      the execution and delivery of this Agreement nor the consummation of any
      transaction contemplated hereby requires Buyer to obtain any consent, permit
      or
      approval, or to make any filing or registration, under any law, regulation,
      judgment or order applicable to Buyer or under any lease, deed of trust or
      other
      agreement to which Buyer is subject, other than any filings that are required
      under applicable securities laws and regulations.

     

    3.6  Finders
      and Brokers.
      No
      person
      has acted as a finder, broker or other intermediary on behalf of Buyer in
      connection with this Agreement or the transactions contemplated hereby, and
      no
      person is entitled to any broker’s or finder’s fee or similar fee with respect
      to this Agreement or such transactions as a result of actions taken by
      Buyer.

     

    ARTICLE
      4

    AGREEMENTS
      OF THE PARTIES

     

    In
      addition to their agreements contained in other sections of this Agreement,
      Buyer and Seller agree that:

     

    4.1  Access
      to Purchased Assets.
      Prior to
      the Closing, Buyer and its authorized representatives shall have full access
      to
      the Purchased Assets, the liabilities of Seller reflected in Schedule 1.3 hereto
      and the books, records, agreements and other documents of Seller at all
      reasonable hours, and Buyer shall be furnished with copies of all such books,
      records, agreements and all other documents as may be requested by it. Prior
      to
      the Closing, Buyer shall maintain the confidentiality of such books, records,
      agreements and documents and information about Seller that it acquires in
      connection with such investigation, except to the extent that disclosure thereof
      is required by applicable law or such books, records, agreements, documents
      and
      information are otherwise publicly known. Prior to the Closing, Buyer (and
      its
      authorized representatives) shall also have the right to discuss the Purchased
      Assets with the officers, Shareholders and managers of Seller.

     

    4.2  Seller’s
      Use of Purchased Assets Prior to the Closing.
      Prior to
      the Closing, Seller shall use the Purchased Assets only in the ordinary and
      regular course of business consistent with previous practices without any
      material change and shall not take any action with respect to any Purchased
      Asset or liability of Seller assumed by Buyer that is adverse to Buyer’s
      interests. 

     

    4.3  Reasonable
      Efforts.
      Each
      party to this Agreement agrees to provide reasonable cooperation to the other
      party in the performance of all obligations under this Agreement. Each party
      shall use its reasonable efforts to satisfy or cause to be satisfied, at or
      prior to the Closing, the conditions to the other party’s Closing obligations
      under this Agreement. 

     

    4.4  Publicity.
      Without
      the prior written approval of the other party, neither party shall disclose
      the
      existence and/or contents of any discussions between Buyer and Seller herein
      nor
      issue any press release or other public disclosure regarding the transactions
      contemplated by this Agreement, except as required by applicable securities
      or
      other laws. Notwithstanding the foregoing, the parties to this Agreement may
      disclose the contents of this Agreement in any legal proceedings between the
      parties relating to this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.5  Confidentiality.
      Seller
      and Shareholders agree that neither Seller nor any of its Shareholders shall,
      either before or after the Closing, use or disclose to any person, directly
      or
      indirectly, any confidential information concerning the business of Buyer,
      including, without limitation, any business secret, trade secret, financial
      information, software, internal procedure, business plan, marketing plan,
      pricing strategy or policy or client list, except to the extent that such use
      or
      disclosure is (i) required by an order of a court of competent jurisdiction,
      or
      (ii) authorized in writing by a duly authorized executive officer of Buyer.
      The
      prohibition that is contained in the preceding sentence shall not apply to
      any
      information that is or becomes generally available to the public other than
      through a disclosure by Seller or Shareholders.

     

    ARTICLE
      5

    CLOSING

     

    5.1  Time,
      Place and Date.
      The
      closing of the transactions contemplated by this Agreement (the “Closing”)
      shall
      occur effective as of 12:01 a.m. on the date on which this Agreement is executed
      and delivered by Buyer and Seller (the “Closing
      Date”).
      

     

    5.2  Conditions
      Precedent to Buyer’s Closing Obligations.
      Each
      of
      the following shall be a condition to the obligation of Buyer to consummate
      the
      transactions contemplated by this Agreement, except to the extent that Buyer
      may
      elect to waive any of such conditions in writing: 

     

    (a)  Each
      representation and warranty of Seller and Shareholders contained in this
      Agreement (including any exhibit, schedule or other agreement or document
      delivered pursuant hereto) shall be true and correct in all material respects
      on
      and as of the Closing Date with the same effect as if such representation and
      warranty had been made on and as of the Closing Date, and Seller and
      Shareholders shall have performed or complied in all material respects with
      all
      agreements required by this Agreement to be performed or complied with by Seller
      prior to or at the Closing.

     

    (b)  Seller
      and Shareholders shall have executed and delivered to Buyer a certificate to
      the
      effect that the conditions described in Section 5.2(a) above have been
      satisfied. Seller’s certificate shall be signed by its duly authorized
      officer.

     

    (c)  Seller
      shall have executed and delivered the agreements and documents that are
      described in Section 5.4 below.

     

    (d)  
      No
      claim, action, investigation or other proceeding shall be pending or threatened
      before any court or governmental agency that presents a substantial risk of
      the
      restraint or rescission of the transactions contemplated by this Agreement
      or
      that imposes a substantial risk to Buyer’s ability to obtain title to and
      possession of the Purchased Assets on the terms and conditions contemplated
      by
      this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  There
      shall have been obtained all permits, approvals and consents from governmental
      agencies and third parties that Buyer determines are required in order to
      transfer the Purchased Assets to it. 

     

    (f)  All
      actions required to be taken by Seller to authorize the execution, delivery
      and
      performance of this Agreement shall have been duly and validly
      taken.

     

    (g)  Buyer
      shall have conducted, at its expense, a due diligence examination of the
      Purchased Assets and, in its sole discretion, shall not have disapproved of
      the
      results of its review. 

     

    (h)  Each
      of
      the Shareholders shall have entered into a Noncompetition Agreement in the
      forms
      attached hereto as Exhibits A-1 and A-2.

     

    (i)  Seller
      shall have entered into Loan Out Agreement in the form attached hereto as
      Exhibits B pertaining to the services of Mark Miller and John
      Gross.

     

    5.3  Conditions
      Precedent to Seller’s and Shareholders’ Closing
      Obligations.
      Each of
      the following shall be a condition to the obligation of Seller to consummate
      the
      transactions contemplated by this Agreement, except to the extent that Seller
      may elect to waive any of such conditions in writing: 

     

    (a)  Each
      representation and warranty of Buyer contained in this Agreement (including
      any
      exhibit, schedule or other agreement or document delivered pursuant hereto)
      shall be true and correct in all respects on and as of the Closing Date with
      the
      same effect as if such representation and warranty had been made on and as
      of
      the Closing Date, and Buyer shall have performed or complied with all agreements
      required by this Agreement to be performed or complied with by it prior to
      or at
      the Closing.

     

    (b)  No
      claim,
      action, investigation or other proceeding shall be pending or threatened before
      any court or governmental agency that presents a substantial risk of the
      restraint or rescission of the transactions contemplated by this
      Agreement.

     

    (c)  All
      actions required to be taken by Buyer to authorize the execution, delivery
      and
      performance of this Agreement shall have been duly and validly
      taken.

     

    (d)  Buyer
      shall have entered into Loan Out Agreement with Seller pertaining to the
      services of Mark Miller and John Gross.

     

    (e)  Buyer
      shall have executed and delivered to Seller a certificate to the effect that
      the
      conditions described in Section 5.3 have been satisfied. 

     

    5.4  Closing
      Deliveries of Seller. 

     

    (a)  At
      or
      prior to the Closing, Seller shall execute and deliver to Buyer: 

     

    (i)  Bills
      of
      sale and other such assignment instruments, in form and substance reasonably
      satisfactory to Buyer, covering the Purchased Assets and effecting the full
      sale
      and conveyance of the Purchased Assets to Buyer, free and clear of all liens,
      security interests and other encumbrances;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  All
      books, records, correspondence and other documents in Seller’s possession or
      control that evidence or relate to the Purchased Assets; 

     

    (iii)  The
      Closing certificate described above in Section 5.2(b); 

     

    (iv)  A
      copy of
      resolutions of Shareholders and of the governing body of Seller authorizing
      the
      execution, delivery and performance of this Agreement and the other agreements
      and transactions contemplated hereby, which resolutions shall be certified
      by
      the Secretary (or comparable officer) of Seller and which certificate shall
      state that such resolutions have not subsequently been amended or
      rescinded;

     

    (v)  Such
      other closing documents as Buyer may reasonably request in order to consummate
      the transactions contemplated by this Agreement.

     

    5.5  Termination
      of the Agreement.
      If the
      Closing has not occurred, for any reason, prior to the close of business on
      March 1, 2007 or prior to such later Closing deadline as the parties may
      mutually agree upon in writing, this Agreement automatically shall terminate
      and, except as provided in this Section 5.6, the parties hereto shall have
      no
      further rights or obligations hereunder. Notwithstanding the termination of
      this
      Agreement pursuant to the preceding sentence, the obligations of the parties
      described in the following Sections of this Agreement shall survive: 4.1 (second
      sentence); 4.4; 4.5; 7.11; 7.14; 7.15, and 7.16. Furthermore, the termination
      of
      this Agreement shall not adversely affect any right that a party may have
      against another party for breach of contract.

     

    ARTICLE
      6

    INDEMNIFICATION

     

    6.1  Survival
      of Representations and Warranties.
      All
      representations and warranties of the parties hereto (except for those set
      forth
      in Sections 2.2 and 2.13) shall survive until December 31, 2009.
      Representations and warranties set forth in Sections 2.2. and 2.13 hereof shall
      survive until the relevant statute of limitations has run. All representations,
      warranties and agreements of the parties made in any exhibit or schedule to
      this
      Agreement or in any other agreement or document delivered pursuant to this
      Agreement shall be deemed to be contained in this Agreement. A claim with
      respect to a breach of a representation or a warranty shall not be foreclosed
      if
      the maker of such claim shall have made such claim in writing to the other
      party
      prior to the expiration of the survival period described above.

     

    6.2  
      Indemnification by Seller and Shareholders.
      Subject
      to the provisions of this Article 6, Seller and each Shareholder, individually,
      shall indemnify and hold harmless Buyer from and against any and all losses,
      damages, liabilities, costs and expenses, including, without limitation,
      settlement costs and reasonable legal, accounting and other expenses for
      investigating or defending any actions (collectively, “Losses”)
      that
      Buyer may incur resulting from (i) any breach of any representation or warranty
      of Seller or Shareholders made in this Agreement or the Bill of Sale, (ii)
      any
      breach of any agreement of Seller or Shareholders contained in this Agreement
      or
      the Bill of Sale, (iii) any violation of California’s Bulk Sales Law (if
      applicable to this Agreement by Seller or Shareholders), (iv) any claim by
      a
      finder, broker or other intermediary representing Seller or Shareholders,
      directors or officers in connection with this Agreement or the transactions
      contemplated hereby; and (v) any liability of Seller not specifically described
      in Schedule 1.3 attached hereto (including, without limitation, any claim or
      lawsuit by any governmental agency or other person or entity that is brought
      against Buyer and that relates to a liability of Seller). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.3  Indemnification
      by Buyer.
      Subject
      to the provisions of this Article 6, Buyer shall indemnify and hold harmless
      Seller and Shareholders from and against any and all Losses that Seller may
      incur based upon, arising out of or resulting from (i) any breach of any
      representation or warranty of Buyer made in this Agreement or the Bill of Sale
      or (ii) any breach of any agreement of Buyer contained in this Agreement or
      the
      Bill of Sale, (iii) the Assumed Liabilities, and (iv) the ownership or
      operation of the Division after the Closing.

     

    6.4  Notice
      of Claims; Contest of Claims.
      

     

    (a)  If
      the
      indemnified party believes that it has incurred any Losses, or if any action
      at
      law or suit in equity is instituted by a third party with respect to which
      the
      indemnified party intends to claim any Losses under this Article 6, the
      indemnified party shall so notify the indemnifying party. The notice shall
      describe such Losses, the amount thereof, if known, and the method of
      computation thereof, all with reasonable particularity and shall contain a
      reference to the provisions of this Agreement in respect of which such Losses
      shall have been incurred; and, in the case of an action or suit by a third
      party, shall include a copy of all documents received by the indemnified party
      in connection therewith and any other information known to the indemnified
      party
      with respect to such action or suit or the basis therefor. Such notice shall
      be
      given promptly after the indemnified party becomes aware of each such Loss,
      action or suit, but failure to give such prompt notice shall not affect the
      indemnifying party’s obligations hereunder unless such party has been prejudiced
      thereby. 

     

    The
      indemnifying party shall, within thirty days after receipt of such notice of
      Losses, (i) pay or cause to be paid to the indemnified party the amount of
      Losses specified in such notice which the indemnifying party does not contest,
      or (ii) notify the indemnified party if it wishes to contest the existence
      or
      amount of part or all of such Losses, stating with particularity the basis
      upon
      which it contests the existence or amount thereof. The indemnifying party shall,
      within thirty days after receipt of each notice with respect to an action or
      suit by a third party, notify the indemnified party if it elects to conduct
      and
      control such action or suit. If the indemnifying party does not give such notice
      in the case of an action or suit by a third party, the indemnified party shall
      have the right to defend, contest, settle or compromise such action or suit,
      and
      the indemnifying party shall, upon request from such indemnified party, promptly
      pay to such indemnified party, in accordance with the other terms of this
      Article 6, the amount of any Losses resulting from its liability to the third
      party claimant. If the indemnifying party gives such notice in the case of
      an
      action or suit by a third party, the indemnifying party shall have the right
      to
      undertake, conduct and control, through counsel of its own choosing and at
      the
      sole expense of the indemnifying party, the conduct and settlement of such
      action or suit, and the indemnified party shall cooperate with such indemnifying
      party in connection therewith. So long as the indemnifying party is contesting
      any such action or suit in good faith, the indemnified party shall not pay
      or
      settle any such action or suit. Notwithstanding the foregoing, the indemnified
      party shall have the right to pay or settle any such action or suit, provided
      that in such event the indemnified party shall waive any right to indemnity
      therefor by the indemnifying party, and no amount in respect thereof shall
      be
      claimed as a Loss under this Article 6.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.5  Limitations.
      Notwithstanding any other provisions of this Agreement, including in this
      Article 6 above, but subject to Section 6.5(h) below:

     

    (a)  No
      party
      to this Agreement shall have any liability under this Article 6 unless and
      until the indemnified party has incurred Losses in excess of $40,000 (the
“Basket Amount”) and such party’s liability under this Article 6 shall apply
      only to the amount in excess of the Basket Amount.

     

    (b)  Except
      for actual fraud, no party to this Agreement shall have any liability under
      this
      Article 6 in excess of 80% of the Purchase Price (including the earnout
      portion) paid by the Buyer.

     

    (c)  The
      provisions of Section 6.2 and 6.3 shall not apply to any breaches that have
      been
      waived by the party claiming indemnification.

     

    (d)  EXCEPT
      TO
      THE EXTENT REQUIRED UNDER SECTIONS 6.2 AND 6.3 WITH RESPECT TO THIRD PARTY
      CLAIMS, IN NO EVENT WILL ANY PARTY’S LIABILITY OF ANY KIND INCLUDE ANY SPECIAL,
      INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE LOSSES OR DAMAGES, INCLUDING,
      WITHOUT LIMITATION, LOST PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
      POSSIBILITY OF SUCH DAMAGES.

     

    (e)  The
      calculation of Buyer’s Losses will be net of any tax benefits received or to be
      received by Buyer in respect of such Buyer Losses.

     

    (f)  The
      parties hereto shall have no obligations under this Article 6 for any claim
      for
      indemnification that is not made in compliance with this Article 6 prior
      to

     

    December
      31, 2009, provided; however, that Buyer may bring claims for indemnification
      for
      Seller’s or Shareholders’ breaches of Sections 2.2 and 2.13 at any time prior to
      the expiration of the applicable statute of limitations.

     

    (g)  The
      indemnification provisions of this Article 6 shall be the parties’ sole and
      exclusive remedy for any claims arising from this Agreement.

     

    (h)  The
      provisions of Sections 6.5(a)-(g) above do not apply to Buyer’s obligation to
      pay the Purchase Price, including the earnout, under this Agreement, and such
      obligation shall be independent of the provisions of Section 6.5(a)-(g)
      above.

     

    ARTICLE
      7

    GENERAL
      PROVISIONS

     

    7.1  Injunctive
      Relief.
      Each
      party to this Agreement agrees that damages would be an inadequate remedy for
      the other party’s breach of Section 4.5 hereof, and that the breach of such
      provision will result in immeasurable and irreparable harm to such party.
      Therefore, in addition to damages and any other remedy to which a party may
      be
      entitled by reason of a breach of any such provision, such party shall be
      entitled to seek and obtain temporary, preliminary and permanent injunctive
      relief from any court of competent jurisdiction restraining the other party
      from
      committing or continuing any breach of Section 4.5 hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.2  Notices.
      Any
      notice required or permitted by this Agreement to be given by one party to
      the
      other must be in writing and personally delivered or sent by registered or
      certified United States mail (postage prepaid and return receipt requested),
      by
      reputable overnight delivery service or by facsimile transmission, addressed
      to
      the address shown below or to such other address as such party may designate
      in
      the foregoing manner to the other party. Any such notice that is sent in the
      foregoing manner shall be deemed to have been delivered upon actual personal
      delivery or actual receipt by facsimile transmission or three days after deposit
      in the United States mail or one day after delivery to an overnight delivery
      service.

     

    
      	
              If
                to Buyer:

            	
              Point.360

              Attn:
                CFO

              2777
                North Ontario Street

              Burbank,
                CA 91504

               

              With
                a copy to:

              William
                D. Gould

              Troy
                & Gould Professional Corp.

              1801
                Century Park East

              Los
                Angeles, CA 90067

            
	
               

              If
                to Seller:

            	
               

              Eden
                FX, Inc.

              1438
                N. Gower Street

              Box
                19, Building 50

              Hollywood,
                CA 90028

            
	 	 
	
               

               

              If
                to Mark Miller:

            	
              Mark
                Miller

               

              494
                Vineyard Drive

              Simi
                Valley, CA 93065

            
	
               

              If
                to John Gross:

            	
               

              John
                Gross

              800
                Huntley Drive

              West
                Hollywood, CA 90069

            
	
               

              With
                a copy to:

            	
               

              Silver
                & Freedman, APLC

              2029
                Century Park East, 19th
                Floor

              Los
                Angeles, CA 90067

              Attn:
                Gregory N. Weisman, Esq.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.3  Amendments
      and Termination; Entire Agreement.
      This
      Agreement may be amended or terminated only by a writing executed by each party
      hereto. Together with the exhibits, schedules and other agreements and documents
      delivered pursuant hereto, this Agreement constitutes the entire agreement
      of
      the parties hereto relating to the subject matter hereof and supersedes all
      prior oral and written understandings and agreements relating to such subject
      matter.

     

    7.4  Successors
      and Assigns.
      This
      Agreement shall be binding upon, and shall benefit, the parties hereto and
      their
      respective successors and assigns. Notwithstanding the foregoing, (i) the
      obligations of Seller and Shareholders hereunder are not assignable to another
      person without Buyer’s prior written consent, and (ii) Buyer’s obligations
      hereunder are assignable to another person without obtaining any other party’s
      consent only in connection with a transfer of substantially all of the assets
      of
      the Division or similar transaction in which Buyer’s successor or assign assumes
      all of Buyer’s obligations hereunder (whether by agreement or by operation of
      law).

     

    7.5  Calculation
      of Time.
      Wherever
      in this Agreement a period of time is stated in a number of days, it shall
      be
      deemed to mean calendar days. However, when any period of time so stated would
      end upon a Saturday, Sunday or legal holiday, such period shall be deemed to
      end
      upon the next day following that is not a Saturday, Sunday or legal
      holiday.

     

    7.6  Further
      Assurances.
      Each
      party shall perform any further acts and execute and deliver any further
      documents that may be reasonably necessary or advisable to carry out the
      provisions of this Agreement.

     

    7.7  Severability. 

     

    (a)  All
      provisions of this Agreement shall be applicable only to the extent that they
      do
      not violate any applicable law, and are intended to be limited to the extent
      necessary so that they will not render this Agreement invalid, illegal or
      unenforceable under any applicable law. If any provision of this Agreement
      or
      any application thereof shall be held to be invalid, illegal or unenforceable,
      the validity, legality and enforceability of other provisions of this Agreement
      or of any other application of such provision shall in no way be affected
      thereby. 

     

    (b)  Without
      limiting the generality of Section 7.7(a) above, if for any reason any term
      or
      provision containing a restriction set forth in this Agreement is held to cover
      an area or to be for a length of time which is unreasonable, or in any other
      way
      is construed to be too broad or to any extent invalid, such term or provision
      shall not be determined to be null, void and of no effect, but to the extent
      the
      same is or would be valid or enforceable under applicable law, any arbitrator
      or
      court of competent jurisdiction shall construe and interpret or reform this
      Agreement to provide for a restriction having the maximum enforceable area,
      time
      period and other provisions (not greater than those contained herein) as shall
      be valid and enforceable under applicable law.

     

    7.8  Waiver
      of Rights.
      No party
      to this Agreement shall be deemed to have waived any right or remedy that it
      has
      under this Agreement unless this Agreement expressly provides a period of time
      within which such right or remedy must be exercised and such period has expired,
      or unless such party has expressly waived the same in writing. The waiver by
      a
      party of a right or remedy hereunder shall not be deemed to be a waiver of
      any
      other right or remedy or of any subsequent right or remedy of the same
      kind.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.9  Headings;
      Gender and Number.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any manner the meaning or interpretation of this Agreement. Where
      appropriate to the context of this Agreement, use of the singular shall be
      deemed also to refer to the plural, and use of the plural to the singular,
      and
      pronouns of certain gender shall be deemed to comprehend either or both of
      the
      other genders. The terms “hereof,” “herein,” “hereby” and variations thereof
      shall, whenever used in this Agreement, refer to this Agreement as a whole
      and
      not to any particular section hereof. The term “person” refers to any natural
      person, corporation, partnership or other association or entity. Any form of
      the
      word “include” when used in this Agreement is not intended to be exclusive (that
      is, the word “include” means “including, without limitation”). The disclosure of
      any matter in any Schedule to this Agreement shall not be deemed to constitute
      an admission by Seller or Shareholders.

     

    7.10  Counterparts.
      This
      Agreement may be executed in counterparts, and by each party on a separate
      counterpart, each of which shall be deemed an original but all of which taken
      together shall constitute but one and the same instrument.

     

    7.11  Expenses
      Incurred in Preparing This Agreement.
      Each of
      Buyer and Seller shall bear its own costs and expenses incurred in connection
      with the negotiation and preparation of this Agreement, whether or not Closing
      occurs.

     

    7.12  No
      Strict Construction.
      The
      language of this Agreement is the language chosen by the parties hereto to
      express their mutual intent, and this Agreement shall be construed without
      regard to any presumption or rule requiring construction against the party
      causing the instrument to be drafted.

     

    7.13  No
      Third Party Beneficiaries.
      No
      provision of this Agreement is intended to or shall create any rights with
      respect to the subject matter of this Agreement in any third party.

     

    7.14  Governing
      Laws.
      This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the internal laws of the State of California without giving effect to such
      state’s conflict-of-law principles.

     

    7.15  Attorneys’
      Fees and Other Expenses.
      The
      unsuccessful party to any arbitration proceeding or to any court action that
      is
      permitted by this Agreement shall pay to the prevailing party all costs and
      expenses, including, without limitation, reasonable attorneys’ fees, incurred
      therein by the successful party, all of which shall be included in and as a
      part
      of the award rendered in such proceeding or action. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      Buyer,
      Seller and Shareholders have executed and delivered this Agreement as of the
      date first above written.

     

    
      	 	
              POINT.360
                (“BUYER”)

              

              

              By:
                ____________________________

                Alan
                R.
                Steel

                Chief
                Financial
                Officer

              

              EDEN
                FX (“SELLER”)

              

              

              
                By:
                  ____________________________
  Mark
                Miller
                

                Co-President

              

              
                By:
                  ____________________________
  John
                Gross

                Co-President

               

              Mark
                Miller,

              as
                an individual

              

              

              
                By:
                  ____________________________
  Mark
                Miller,

              

              

              John
                Gross,

              as
                an individual

               

               

              
                By:
                  ____________________________

                  John
                  Gross

              

            
	 	 

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      1.1 (Purchased Assets)

    

    

    

    The
      following assets of Seller: 

    

    All
      of
      the assets of Seller other than the assets listed in Schedule 1.2. The physical
      assets of Seller are described in the attached spreadsheet.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      1.2 (Excluded Assets)

    

    

    

    Corporate
      books and records

    Financial
      and tax records (copies to be provided to Buyer at Seller’s cost.) Originals to
      be made available to Buyer upon request. Seller will retain copies of such
      financial and tax records for five years after the Closing Date.

    

    Insurance
      contracts and claims

    Personal
      property and effects, including, but not limited to, laptop computers,
      furniture, awards, models, toys, accessories, etc.

    

    Accounts
      receivable in accordance with the Asset Purchase Agreement

    Bank
      accounts

    Security
      Deposits with landlords, which shall be paid over to Seller upon their return
      by
      the landlords. Seller shall be responsible for deductions from such security
      deposits resulting from damages caused on or before the Closing Date and Buyer
      shall be responsible for deductions from such security deposits resulting from
      damages caused on or after the Closing Date. 

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      1.2(f)

    Accounts
      Receivable and Accounts Payable 

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    Schedule
      1.3 (Assumed Liabilities/Debts to be Paid by Buyer)

    

    

    

    
      	
              Debt

            	
              Amount

            	
              Date
                to be paid by Buyer

            
	 	 	 
	
              1. Credit
                Cards

               

              American
                Express Platinum

               

              American
                Express Blue

               

              Advanta

               

              Bank
                of America

               

              Fleet
                Shell

            	
               

               

              $48,545.49
                

               

              $26,827.85

               

              $19,426.72

               

              $23,658

               

              $1,200.00

            	
               

               

              Within
                5 days after the Closing

               

              Within
                5 days after the Closing

               

              Within
                5 days after the Closing

               

              Within
                5 days after the Closing

               

              Within
                5 days after the Closing

            
	 	 	 
	
              2.
                Jeff Ross

            	
              $23,300

            	
              On
                the Closing Date by check

            
	 	 	 
	
              3.
                John Gross

            	
              $39,000

            	
              On
                the Closing Date by check

            
	 	 	 
	
              4.
                City National Bank

            	
              $152,166.69

            	
              On
                the Closing Date by wire transfer

            
	 	 	 
	
              5.
                Wells Fargo Credit Line

            	
              $24,000

            	
              On
                the Closing Date by check

            
	 	 	 
	
              Total:

            	
              $358,124.75

            	 
	 	 	 

    

    

    Assumed
      Contracts

    

    1. All
      contracts and purchase orders with customers and vendors

    

    2. Sublease
      with Technicolor Creative Services - Hollywood for Building 50. This Sublease
      was not executed by the parties and calls for a month to month tenancy with
      a 5
      month notice of termination. 

    

    3. All
      equipment leases and rentals, which are as follows:

    

    
      	    a.  	
              Global
                Vantage (assigned to Tustin Community Bank)

               

              Computer
                related hardware and software 

              

              $1,296.33
                per month  

            

    

    

    
      

      
        	    b.  	
                Global
                  Vantage (assigned to National City Commercial Capital
                  Corporation)

                  

                Computer
                  related hardware 

                

                $5,498.30
                  per month

              

      

       

    

    4. All
      utilities after the Closing

    

    5. Uncashed
      Checks to Technicolor Build 50 for September, October, and December 2006 rent
      ($48,616.55). Buyer
      shall assume this liability. To the extent that Technicolor claims all or a
      any
      portion of this amount and the Buyer pays Technicolor, such paid amount shall
      be
      deducted from the next earnout payment.

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      1.6(b)

    

    Budget

    

      See
        Attached

    

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      1.10

    

    Purchase
      Price Allocation

    

    See
      Attached

     

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      2.2 (Capitalization of Seller)

    

    

    

    

    Mark
      Miller     =    
      50%

    (500,000
      SHARES OF COMMON STOCK, $0- PAR VALUE)

    

    

    John
      Gross     =    
50%
      

    (500,000
      SHARES OF COMMON STOCK, $0- PAR VALUE)

    

    

    

    TOTAL
      AUTHORIZED SHARES = 1,000,000- OF COMMON STOCK, $0- PAR
      VALUE

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      2.8 (Seller’s Charter Documents)

    

    See
      attached.

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      2.11 (Seller’s Litigation)

    

     

    

    NONE

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule
      2.14 (Seller’s Intellectual Property)

    

     

    The
      name
“Eden FX”

    

    Eden
      FX
      logo

    

    Shot
      Tracker software

    

    Render
      Controller software

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      2.18

    

    Financial
      Statements

    

    See
      Attached

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A-1

    

    NON-COMPETITION
      AGREEMENT WITH MARK MILLER

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      A-2

    

    NON-COMPETITION
      AGREEMENT WITH JOHN GROSS

     

    
       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

EXHIBIT
      B

    

    LOAN
      OUT AGREEMENT

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