VDI MEDIA
8-K, 1998-06-29
MOTION PICTURE & VIDEO TAPE PRODUCTION
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<PAGE>
                          SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON, DC 20549
     
                                       FORM 8-K

                                    CURRENT REPORT


                       PURSUANT TO SECTION 13 OR 15(d) OF THE
                          SECURITIES EXCHANGE ACT OF 1934


        DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 12, 1998

                                      VDI MEDIA
                (Exact Name of Registrant as Specified in its Charter)


          CALIFORNIA                  0-21917                  95-4272619
 (State or Other Jurisdiction       (Commission            (I.R.S. Employer
      of Incorporation)             File Number)          Identification No.)


                                          
                              6920 SUNSET BOULEVARD
                           HOLLYWOOD, CALIFORNIA 90028
               (Address of Principal Executive Offices)    (Zip code)

                                   (213) 957-5500

                 Registrant's telephone number, including area code

<PAGE>

ITEM 2.  ACQUISITION OF ASSETS.

     On June 12, 1998 VDI Media (the "Company") closed an Asset Purchase
Agreement (the "Agreement"), dated as of June 11, 1998, with All Post, Inc.( the
"Seller").  Pursuant to the Agreement, the Company purchased certain assets  of
the Seller.  The Seller provides technical media services primarily to owners,
independent producers and distributors of television programming, feature films
and other entertainment content, which business the Company intends to continue.

     The purchase price for the asset acquisition was $13,000,000.  In addition,
the Company may be required pay an earn-out if the acquired business achieves a
specified gross profit target, subject to certain limitations described in the
Agreement.  In addition the Company entered into lease agreements with the
Seller to occupy premises formerly used by All Post.  The purchase price for the
All Post acquisition was funded from the Company's line of credit with Union
Bank of California.

     The description of the Agreement contained herein, which does not purport
to be complete, is qualified in its entirety by reference to the Agreement,
which is attached as an exhibit hereto.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
         EXHIBITS.

    (a)  FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.

         Financial statements relating to this purchase are not currently 
         available. To the extent required, the Company intends to file such 
         financial statements by an amendment to this Current Report on 
         Form 8-K within 60 days of the date of the filing of this Report.

    (b)  PRO FORMA FINANCIAL INFORMATION.

         Pro forma financial information relating to this purchase is not 
         currently available.  To the extent required, the Company intends to 
         file such pro forma financial information by an amendment to this 
         Current Report on Form 8-K within 60 days of the date of the filing 
         of this Report.

    (c)  EXHIBITS

     10.16   Asset Purchase Agreement, dated as of June 11, 1998,
             by between VDI Media and All Post, Inc.

<PAGE>

     10.17  Lease Agreement, dated as of June 12, 1998,
            by between VDI Media and All Post, Inc. [Hollywood Way premises]

     10.18   Lease Agreement, dated as of June 12, 1998,
             by between VDI Media and All Post, Inc. [Olive Street premises]


<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.


                                            VDI MEDIA

Date: June 26, 1998                         /s/ Donald R. Stine
                                            ----------------------------
                                            Donald R. Stine
                                            Chief Financial Officer and
                                              Treasurer


<PAGE>

                           ASSET PURCHASE AGREEMENT


                          Dated as of June __, 1998

                                by and between

                                  VDI MEDIA,
                                 as Purchaser

                                     and

                                ALL POST, INC.,
                                   as Seller


<PAGE>

                                                                  Execution Copy

                            ASSET PURCHASE AGREEMENT


       THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered 
into as of  June __, 1998, by and between VDI Media, a California corporation 
("Purchaser") and All Post, Inc., a California corporation ("Seller").

                                 R E C I T A L S

       A.     Purchaser desires to purchase from Seller, and Seller desires 
to sell, convey, transfer, assign and deliver to Purchaser, certain assets of 
Seller upon the terms and subject to the conditions of this Agreement.

                                A G R E E M E N T

       NOW, THEREFORE, in consideration of the foregoing and the provisions 
set forth below, and subject to the terms and conditions set forth herein, 
the parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

       As used in this Agreement, the following terms shall have the meanings 
indicated below:

       "ACCOUNTS RECEIVABLE" shall mean the accounts, notes and other 
receivables of Seller related to the Business.

       "ACCOUNTS PAYABLE" shall mean those accounts payable of the Seller 
related to the Business which are Assumed Liabilities.

       "ACTION" shall mean any action, claim, suit, litigation, proceeding, 
labor dispute, arbitral action, governmental audit or inquiry, criminal 
prosecution, investigation or unfair labor practice charge or complaint.

       "AFFILIATE" shall mean, in respect of any specified Person, any other 
Person that, directly or indirectly, controls, is controlled by, or is under 
common control with, such specified Person or if such specified Person bears 
a familial relationship with such other Person.

       "AFFILIATED PARTIES" shall have the meaning set forth in Section 10.2.

       "AGREEMENT" shall have the meaning set forth in the Preamble.

       "AGREEMENTS NOT TO COMPETE" shall mean the agreement in substantially 
the form of 

<PAGE>

Exhibit A hereto.

       "ANCILLARY AGREEMENTS" shall mean the Deed of Trust, the Hollywood 
Lease, the Olive Lease, the Assumption Agreement and the Secured Indemnity 
Agreement, substantially in the forms attached hereto as Exhibits B, C, D, F, 
and G, respectively.  

       "ASSETS" shall mean all of the right, title and interest in and to the 
assets described on Exhibit E hereto, and all of Seller's right, title and 
interest in the following, in each case only to the extent related to the 
Business:

              (i)    all Accounts Receivable and contingent rights relating
       thereto (whether current or noncurrent), refunds, deposits, advances, 
       all advance payments, prepaid expense items and credits relating to the
       Business, prepayments or prepaid expenses and all other receivables
       arising out of the Business;

              (ii)   all Contract Rights;

              (iii)  all Personal Property Leases;

              (iv)   all Books and Records;

              (v)    all Proprietary Rights;

              (vi)   all computers and software;

              (vii)  all tape stock on hand on the Closing Date;

              (viii) the name "ALL POST, INC." and all variations thereof;

              (ix)   all supplies, sales literature, promotional literature,
       customer, supplier and distributor lists, sales art work, display units,
       telephone and fax numbers and purchasing records related to the Business;

              (x)    all rights under or pursuant to all warranties,
       representations and guarantees made by suppliers in connection with the
       Assets or services furnished to Seller pertaining to the Business or
       affecting the Assets; 

              (xi)   all claims, causes of action (other than the Barsotti
       Action and the Compact Storage Action), choses in action, rights of
       recovery and rights of set-off of any kind related to the Assets or the
       Assumed Liabilities, against any person or entity, including without
       limitation any liens, security interests, pledges or other rights to
       payment or to enforce payment in connection with products delivered by
       Seller on or prior to the Closing Date except to the extent that any of
       the foregoing relate to any of the Excluded Liabilities; and

              (xii)  all of the Business as a going concern and the goodwill
       pertaining thereto.


                                       2

<PAGE>

       "ASSUMED LIABILITIES" shall have the meaning set forth in Section 2.2.

       "BALANCE SHEET" or "BALANCE SHEETS" shall have the meaning set forth 
in Section 4.7(a).

       "BARSOTTI ACTION" means the litigation between Seller, Westar Capital 
Associates and Scott Barsotti Case Number EC 022591, Superior Court of the 
State of California for the County of Los Angeles, including any related 
cross-claims and complaints.

       "BOOKS AND RECORDS" shall mean (a) all records, files and lists of 
Seller pertaining to the Assets, (b) all records and lists, customers, 
suppliers, vendors or clients of Seller pertaining to the Business and (c) 
all books, ledgers, files, reports, plans, drawings, merchandise and sales 
promotion literature and promotional and advertising materials, all 
catalogues, research material, management information systems, software, 
technology and specifications and operating records of every kind maintained 
by Seller pertaining to the Business.
       
       "BUSINESS" shall mean the following business lines of Seller: 
duplication, vault storage, audio layback, audio production, editing, 
telecine, compression and ancillary services, but in no event shall 
"Business" include the Cinetech Business.

       "BUSINESS DAY" means any day that is not a Saturday, a Sunday or other 
day on which banks are required or authorized by law to be closed in the City 
of Los Angeles.

       "CINETECH BUSINESS" shall mean the business, as of the date hereof, of 
Post Optical Services, Inc., doing business as Cinetech, which is limited to 
the preservation and restoration of film and audio elements.

       "CLOSING" shall have the meaning set forth in Section 3.1.

       "CLOSING DATE" shall mean (a) June __, 1998 or (b) such other date as 
Purchaser and Seller shall mutually agree upon.

       "COBRA" shall have the meaning set forth in Section 4.15(e).

       "CODE" shall mean the Internal Revenue Code of 1986, as amended.

       "COMPACT STORAGE ACTION" means the litigation between Seller and 
Compact Storage Systems, Inc.  ("Compact Storage vs. All Post, et al") Case 
Number EC024064, Superior Court, North Central District, including any 
related cross-claims and complaints.

       "CONTRACT" shall mean, other than any Lease, any agreement, contract, 
note, loan, evidence of indebtedness, purchase order, undertaking, obligation 
or commitment to which Seller is a party or is bound and which relates to the 
Business or the Assets, whether oral or written, including, without 
limitation, purchase commitments for materials and other services, whether or 
not entered into in the ordinary course of business, relating to the 
Business, Seller's rights under 


                                       3

<PAGE>

any confidentiality agreements relating to the Business (if and to the extent 
assignable), all unfilled sales orders, invoices, contracts and commitments 
with customers relating to the Business, all unfilled purchase orders, 
invoices, contracts and commitments with suppliers relating to the Business.

       "CONTRACT RIGHTS" shall mean all of Seller's rights and obligations 
under the Contracts, excluding any such Contracts evidencing Financing 
Obligations.

       "COPYRIGHTS" shall mean registered copyrights, copyright applications 
and unregistered copyrights.

       "COURT ORDER" shall mean any judgment, decision, consent decree, 
injunction, ruling or order of any federal, state or local court or 
governmental agency, department or authority that is binding on any person or 
its property under applicable law.

       "DAMAGES" shall have the meaning set forth in Section 10.2.

       "DEFAULT" shall mean (a) a breach of or default under any Contract, 
Lease or Permit, (b) the occurrence of an event that with the passage of time 
or the giving of notice or both would constitute a breach of or default under 
any Contract, Lease or Permit, or (c) the occurrence of an event that with or 
without the passage of time or the giving of notice or both would give rise 
to a right of termination, renegotiation or acceleration under any Contract, 
Lease or Permit.

       "DEED OF TRUST" shall mean that certain Deed of Trust, dated as of the 
Closing Date, by Seller, as Trustor, to First American Title Insurance 
Company, as trustee, for the benefit of Purchaser, as beneficiary, securing 
Seller's indemnity obligations set forth in the Secured Indemnity Agreement, 
in substantially the form of Exhibit B hereto.

       "DISCLOSURE SCHEDULE" shall mean a schedule executed and delivered by 
Seller to Purchaser as of the date hereof which sets forth the exceptions to 
the representations and warranties contained in Article IV hereof.  Unless 
otherwise specified, each reference in this Agreement to any numbered 
schedule is a reference to that numbered schedule which is included in the 
Disclosure Schedule.

       "DISCONTINUED OPERATIONS" shall mean any businesses or operations 
previously sold or otherwise disposed of by Seller and any ongoing 
indemnification obligations in connection therewith.

       "EARN-OUT" shall have the meaning set forth in Section 2.4(a)(ii).

       "EARN-OUT PERIOD" shall mean the period commencing on the day after 
the Closing Date and ending on the first anniversary of the Closing.

       "ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge, 
easement, security interest, deed of trust, mortgage, right-of-way, 
encroachment, building or use restriction, conditional sales agreement, 
encumbrance or other right of third parties, whether voluntarily 


                                       4

<PAGE>

incurred or arising by operation of law, and includes, without limitation, 
any agreement to give any of the foregoing in the future, and any contingent 
sale or other title retention agreement or lease in the nature thereof.

       "ENVIRONMENTAL LIABILITIES FOR PRE-CLOSING MATTERS" shall mean any and 
all liabilities, damages, losses, costs and expenses arising from any 
Pre-Closing Environmental Matters, including, without limitation, costs of 
investigation, cleanup, removal, remedial, corrective or response action, the 
costs associated with posting financial assurances for the completion of 
investigation, cleanup, removal, remedial, corrective or response actions, 
attorneys' fees, the preparation of any closure or other necessary or 
required plans or analyses, or other necessary reports or analyses submitted 
to or prepared for regulating agencies.

       "ENVIRONMENTAL PROTECTION LAWS" shall mean all federal, state, local 
and foreign laws, statutes, regulations having the force and effect of law, 
permits, court decrees, judgments, injunctions and written orders concerning 
(i) public health and safety relating to exposure of humans to toxic or 
hazardous substances or otherwise relating to Regulated Substances or 
(ii) pollution or protection of the environment or natural resources, including,
without limitation, the Comprehensive Environmental Response, Compensation, 
and Liability Act ("CERCLA") (42 U.S.C. Section 9601 ET SEQ.); the Hazardous 
Materials Transportation Act (49 U.S.C. Section 1801 ET SEQ. ); the Resource 
Conservation and Recovery Act ("RCRA") (42 U.S.C. Section 6901 ET SEQ.); the 
Clean Water Act (33 U.S.C. Section 1251 ET SEQ.); the Safe Drinking Water Act 
(14 U.S.C. Section 1401 ET SEQ.); the Toxic Substances Control Act (15 U.S.C. 
Section 2601 ET SEQ.), the Federal Insecticide, Fungicide, and Rodenticide 
Act (7 U.S.C. Section 136 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 
ET SEQ.); the Emergency Planning and Community Right-to-Know Act (42 U.S.C. 
Section 11001-11005, 11021-11023, and 11041-11050); the Porter-Cologne Water 
Quality Act (California Water Code Section 13000-13999.19); the Hazardous 
Waste Control Law (California Health & Safety Code Section 25100-25250.25); 
the Safe Drinking Water and Toxic Enforcement Act (California Health & Safety 
Code Section 25249.5-25249.13); California Health & Safety Code 
Section 25280-25299.81 (regarding Underground Storage of Hazardous Substances) 
and Section 25500-25545 (regarding Hazardous Materials Inventories and Emergency
Plans); the Hazardous Substance Account Act (California Health & Safety Code 
Section 25300-25393); and California Health & Safety Code Section 39000-44384 
regarding Air Resources; in each case including the regulations promulgated 
thereunder, including, without limitation, the regulations promulgated by the 
South Coast Air Quality Management District; each as supplemented or amended 
from time to time.

       "EPA" shall mean the United States Environmental Protection Agency, or 
any successor United States governmental agency.

       "ERISA" shall mean the Employee Retirement Income Security Act of 
1974, as the same may be amended from time to time.

       "ERISA AFFILIATE" shall mean with respect to any person (a) any 
corporation that is a member of a controlled group of corporations, within 
the meaning of Section 414(b) of the Code, of which that person is a member, 
(b) any trade or business (whether or not incorporated) that is a member of a 
group of trades or businesses under common control, within the meaning of 
Sec-


                                       5

<PAGE>

tion 414(c) of the Code, of which that person is a member, and (c) any member 
of an affiliated service group, within the meaning of Section 414(m) and (o) 
of the Code, of which that person or any entity described in clause (a) or 
(b) is a member.

       "ESCROW AGREEMENT" shall mean the agreement relating to the Holdback 
Escrow referred to in Section 19 of the Deed of Trust among Purchaser, Seller 
and the escrow agent named therein.

       "EXCLUDED LIABILITIES" shall have the meaning set forth in Section 2.3.

       "FACILITIES" shall mean all plants, offices, manufacturing facilities, 
stores, warehouses, improvements, administration buildings, and all real 
property and related facilities which are used or held for use in connection 
with the Business.

       "FINANCIALS" shall have the meaning set forth in Section 4.7(a).

       "FINANCING OBLIGATIONS" shall mean (a) indebtedness of Seller for 
borrowed money, (b) obligations of Seller evidenced by bonds, notes, 
debentures, letters of credit or similar instruments, (c) obligations under 
capitalized leases, (d) obligations under conditional sale, title retention 
or similar agreements or arrangements creating an obligation of Seller with 
respect to the deferred purchase price of property (other than customary 
trade credit), (e) interest rate and currency obligation swaps, hedges and 
similar arrangements and (f) all obligations of Seller to guaranty any of the 
foregoing types of obligations on behalf of others, in each case as related 
to the Business. 

       "FORMER FACILITY" shall mean each plant, office, manufacturing 
facility, store, warehouse, improvement, administrative building and all real 
property and related facilities that were owned, leased or operated by Seller 
at any time prior to the date hereof, but excluding any Facilities.

       "GAAP" shall mean generally accepted accounting principles 
consistently applied as in effect at the time in question.

       "HOLLYWOOD LEASE" shall mean a lease, dated as of the Closing Date, 
between Seller, as lessor, and Purchaser, as lessee, with respect to that 
real property located at 1133 N. Hollywood Way, Burbank, California 91505, in 
the form attached hereto as Exhibit C, as modified on or prior to the Closing 
by mutual agreement of Purchaser and Seller.

       "INDEMNIFIED PARTY" shall have the meaning set forth in Section 10.7.

       "INDEMNIFYING PARTY" shall have the meaning set forth in Section 10.7.

       "INSURANCE POLICIES" shall mean the insurance policies related to the 
Assets and/or the Business listed in Section 4.22 of the Disclosure Schedule.

       "INTANGIBLE PERSONAL PROPERTY" shall have the meaning set forth in 
Section 4.13(a).


                                       6

<PAGE>

       "INTERIM BALANCE SHEET" shall have the meaning set forth in 
Section 4.7(b).

       "INTERIM FINANCIALS" shall have the meaning set forth in Section 4.7(b).

       "IRS" shall mean the Internal Revenue Service.

       "LEASED PERSONAL PROPERTY" shall mean all leased property described in 
the Personal Property Leases.

       "LIABILITIES" shall mean any liability of Seller, including, without 
limitation, any direct or indirect liability, indebtedness, obligation, 
commitment, expense, claim, deficiency, guaranty or endorsement of or by any 
person of any type, whether accrued, absolute, contingent, matured, 
unmatured, known, unknown or other, in each case as related to the Business.  

       "LICENSES" shall have the meaning set forth in Section 4.13(a).

       "MATERIAL CONTRACTS" shall have the meaning set forth in Section 4.16.

       "MULTI-EMPLOYER PLANS" shall have the meaning set forth in Section 
4.14(a).

       "OLIVE LEASE" shall mean a month-to-month lease, dated as of the 
Closing Date, between Seller, as lessor, and Purchaser, as lessee, with 
respect to that real property located at 2660 West Olive Avenue, Burbank, 
California 91505, in the form attached hereto as Exhibit D, as modified on or 
prior to the Closing by mutual agreement of Purchaser and Seller.

       "OLIVE STREET PROPERTY" shall mean that real property located at 2660 
West Olive Avenue, Burbank, California 91505 owned by Seller.

       "PATENTS" shall mean all patents and patent applications and 
registered designs and registered design applications.  

       "PERMITS" shall mean all licenses, permits, franchises, approvals, 
authorizations, consents or orders of, or filings with, any governmental 
authority, whether foreign, federal, state or local, or any other person, 
necessary or desirable for the past, present or anticipated conduct of, or 
relating to the operation of, the Business.

       "PERMITTED ENCUMBRANCES" shall have the meaning set forth in 
Section 8.13. 

       "PERSON" shall mean any natural person or any corporation, 
partnership, joint venture, limited liability company or other entity.

       "PERSONAL PROPERTY" shall have the meaning set forth in Section 4.26.

       "PERSONAL PROPERTY LEASES" shall have the meaning set forth in 
Section 4.26.


                                       7

<PAGE>

       "PLANS" shall have the meaning set forth in Section 4.15(a).

       "PRE-CLOSING ENVIRONMENTAL MATTERS" shall mean (a) the production, 
use, generation, storage, treatment, recycling, disposal or other handling or 
disposition at any time on or prior to the Closing Date (collectively 
"Handling") of any Regulated Substance, either in, on, under or from any 
Facility or Former Facility, including, without limitation, the effects of 
such Handling of Regulated Substances on resources, persons or property 
within or outside the boundaries of any Facility or Former Facility, (b) any 
release of Regulated Substances at any time on or prior to the Closing Date 
occurring in, on or under any Facility or Former Facility regardless of how 
the Regulated Substances came to rest in, on or under the Facility or Former 
Facility, (c) the failure on or prior to the Closing Date of any Facility or 
Former Facility or any operation of Seller to be in compliance with any 
Environmental Laws, and (d) any other act or omission occurring, or condition 
existing, with respect to the Assets or the Business on or prior to the 
Closing Date which gives rise to liability under any Environmental Protection 
Law.

       "PRIME RATE" shall mean the lesser of (i) the prime rate as reported 
from time to time by THE WALL STREET JOURNAL or (ii) the maximum rate 
permitted by applicable law.

       "PROPRIETARY RIGHTS" shall mean all of Seller's Copyrights, Patents, 
Trademarks, technology rights and licenses, computer software (including 
without limitation any source or object codes therefor or documentation 
relating thereto), trade secrets, franchises, know-how, inventions, designs, 
specifications, plans, drawings and intellectual property rights, in each 
case as relates to the Business.

       "PURCHASER" shall have the meaning set forth in the Preamble.

       "REGULATED SUBSTANCE" shall mean any chemical or substance subject to 
or regulated under any Environmental Protection Law including, without 
limitation, any "pollutant or contaminant" or "hazardous substance" as those 
terms are defined in CERCLA, any "hazardous waste" as that term is defined in 
RCRA, and any other hazardous or toxic wastes, substances, or materials, 
petroleum (including crude oil and refined and unrefined fractions thereof), 
polychlorinated biphenyls ("PCBs"), infectious waste, special waste, 
pesticides, fungicides, solvents, herbicides, flammables, explosives, 
asbestos and asbestos containing material, and radioactive materials, whether 
injurious by themselves or in combination with other materials.

       "REGULATIONS" shall mean any laws, statutes, ordinances, regulations, 
rules, notice requirements, court decisions and orders of any foreign, 
federal, state or local government and any other governmental department or 
agency.

       "RELEASE DOCUMENTS" shall have the meaning set forth in Section 
3.2(a)(vi).

       "REPRESENTATIVE" shall mean any officer, director, principal, 
attorney, agent, employee or other representative.

       "SECURED INDEMNITY AGREEMENT" shall mean the Secured Indemnity 
Agreement between 


                                       8

<PAGE>

Purchaser and Seller dated as of the Closing Date, in substantially the form 
of Exhibit G hereto. 

       "SELLER" shall have the meaning set forth in the Preamble. 

       "SUBSIDIARY" shall mean (a) with respect to Seller, any corporation, 
association or other business entity of which more than fifty percent (50%) 
of the total voting power of shares of stock (or equivalent ownership or 
controlling interest) entitled (without regard to the occurrence of any 
contingency) to vote in the election of directors, managers or trustees 
thereof is at the time owned or controlled, directly or indirectly, by Seller 
or one or more of the other Subsidiaries of that Person or a combination 
thereof, (b) any partnership in which Seller is a general partner and any 
limited liability company in which Seller is the managing member, or (c) any 
partnership or limited liability company in which Seller possesses a 50% or 
greater interest in the total capital or total income of such partnership or 
limited liability company.

       "TAX" or "TAXES" shall mean any and all taxes imposed or required to 
be collected by any federal, state or local taxing authority in the United 
States, or by any foreign taxing authority under any statute or regulation, 
including, without limitation, all income, gross receipts, sales, use, 
personal property, use and occupancy, business occupation, mercantile, ad 
valorem, transfer, license, withholding, payroll, employment, excise, real 
estate, environmental, capital stock, franchise, alternative or add-on 
minimum, estimated or other tax of any kind whatsoever, including any 
interest, penalties and other additions thereto.

       "TRADEMARKS" shall mean registered trademarks, registered service 
marks, trademark and service mark applications and unregistered trademarks 
and service marks.

       "TRANSACTIONS" shall mean, in respect of any party, all transactions 
contemplated by this Agreement that involve, relate to or affect such party.

       "TRANSFERRED EMPLOYEES" shall have the meaning set forth in Section 
6.6(a).

       "UNITED STATES GOVERNMENT" shall mean the government of the United 
States, including any agencies, commissions, branches, instrumentalities and 
departments thereof.


                                       9

<PAGE>
                                      ARTICLE 2

                             PURCHASE AND SALE OF ASSETS

       SECTION 2.1   TRANSFER OF ASSETS.  Upon the terms and subject to the
conditions contained herein, at the Closing, Seller shall sell, convey,
transfer, assign and deliver to Purchaser, and Purchaser shall acquire from
Seller, the Assets (including, without limitation, those assets of Seller listed
on Exhibit E hereto), free and clear of all Encumbrances.

       SECTION 2.2   ASSUMPTION OF LIABILITIES.  Upon the terms and subject to
the conditions contained herein, at the Closing, Purchaser shall assume the
Liabilities under the Accounts Payable, Contracts and Leases which are listed on
Schedule 2.2 attached hereto (collectively, "Assumed Liabilities").

       SECTION 2.3   EXCLUDED LIABILITIES.  Notwithstanding any other provision
of this Agreement, except for the Assumed Liabilities expressly specified in
Section 2.2, Purchaser shall not assume, or otherwise be responsible for, any
Liabilities of Seller, whether liquidated or unliquidated, or known or unknown,
whether arising out of occurrences prior to, at or after the date hereof (the
"Excluded Liabilities"), which Excluded Liabilities include, without limitation,
the following:

       (a)    except as otherwise expressly provided in Section 6.6, any
Liability to or in respect of any employees or former employees of Seller
including without limitation (i) any employment agreement, whether or not
written, between Seller and any person, (ii) any Liability under any Employee
Benefit Plan at any time maintained, contributed to or required to be
contributed to by or with respect to Seller or under which Seller may incur
Liability, or any contributions, benefits or Liabilities therefor, or any
Liability with respect to Seller's withdrawal or partial withdrawal from or
termination of any Employee Benefit Plan, (iii) any claim of an unfair labor
practice, or any claim under any state unemployment compensation or worker's
compensation law or regulation or under any federal or state employment
discrimination law or regulation, which shall have been asserted on or prior to
the Closing Date or is based on acts or omissions which occurred on or prior to
the Closing Date and (iv) any liabilities or obligations under the Worker
Adjustment and Retraining Notification Act of 1988, as amended, including the
rules and regulations promulgated thereunder;

       (b)    any Liability of Seller in respect of (i) any income tax or any
interest, penalties or additions pertaining thereto, (ii) any other Tax relating
to any period or portion thereof prior to the date of the Interim Balance Sheet
and not reflected on the Interim Balance Sheet or (iii) any other Tax relating
to any period or portion thereof from the date of the Interim Balance Sheet
unless such Tax is incurred (A) in the ordinary course of business consistent
with past practice and (B) in compliance with the terms of this Agreement;

       (c)    any warranty claims and any Liability arising from any injury to
or death of any person or damage to or destruction of any property, whether
based on negligence, breach of 

                                        10

<PAGE>

warranty, express or implied representation, strict liability, enterprise 
liability or any other legal or equitable theory arising from defects in 
products manufactured or from services performed by or on behalf of Seller or 
any other person or entity on or prior to the Closing Date;

       (d)    any Liability of Seller arising out of or related to any Action
against Seller or any Action which adversely affects the Assets and which shall
have been asserted on or prior to the Closing Date or the basis of which shall
have arisen on or prior to the Closing Date;

       (e)    any Liability of Seller resulting from entering into, performing
its obligations pursuant to or consummating the transactions contemplated by,
this Agreement (including without limitation any Liability of Seller for fees or
expenses incurred in connection with such transactions and any Liability of
Seller pursuant to Article X hereof);

       (f)    any Liability related to any Former Facility or any of the
Discontinued Operations;

       (g)    any Financing Obligation 

       (h)    any Environmental Liabilities for Pre-Closing Matters, whether or
not disclosed in the Disclosure Schedule;

       (i)    any Liability of Seller for fees or expenses incurred prior to the
date hereof in connection with the review by Ernst & Young LLP of the financial
statements of Seller;

       (j)    any Liability of Seller not directly related or incurred with
respect to the conduct of the Business;

       (k)    except to the extent provided for herein, any indebtedness for
borrowed money;

       (l)    any amounts payable to any Affiliate of Seller;

       (m)    liability arising from or in connection with the Barsotti Action
or the Compact Storage Action;

       (n)    any cash overdraft liability; and

       (o)    any Liabilities accruing prior to the Closing Date.

       SECTION 2.4   PURCHASE PRICE.

       (a)    PURCHASE PRICE.  The purchase price for the Assets and the
Agreements Not To Compete (the "Purchase Price") shall consist of:

              (i)    Thirteen Million Dollars ($13,000,000) (the "Cash
Payment"); and 

                                        11

<PAGE>

              (ii)   An amount (the "Earn-Out"), payable in accordance with
Section 2.4(c) below, equal to (x) the amount of the Accounts Receivable as of
the Closing Date minus the amount of the Accounts Payable as of the Closing
Date, as verified by Purchaser's post-closing audit, minus (y) the aggregate
amounts owing or payable by Seller under Article X below to the extent not
previously paid to Purchaser.

       (b)    CLOSING PAYMENT.  At the Closing, upon the terms and subject to
the conditions set forth herein, Purchaser shall deliver to Seller the Cash
Payment by wire transfer at the Closing to an account identified to Purchaser in
writing by Seller at least two business days prior to the Closing Date.

       (c)    EARN-OUT.  Purchaser shall calculate the Gross Profit (as defined
herein) of the Business for the Earn-Out Period.  If the Gross Profit for such
period is equal to or greater than $6.2 million (the "Gross Profit Target"),
then Purchaser shall pay the Seller the Earn-Out.  If the Gross Profit for the
Earn-Out Period is less than the Gross Profit Target, Purchaser shall have no
obligation to pay the Earn-Out.  "Gross Profit" shall mean the revenue of the
Business, net of direct and pooled expenses calculated as set forth on Schedule
2.4 hereto, as determined in accordance with GAAP.  Gross Profit shall not be
reduced by any amounts paid under the provisions of Section 10 below.  Purchaser
agrees to operate the Business in a manner in which the Gross Profit can
reasonably be determined and to spend at least $500,000 during the Earn-Out
Period on capital expenditures for the Business.  Purchaser will use its
reasonable best efforts in the exercise of its business judgment to increase the
Gross Profit of the Business during the Earn-Out Period.  Purchaser shall
maintain accurate books, records and documents reasonably necessary for the
calculation of Gross Profit.  Seller shall, upon request delivered to Purchaser
in writing, have reasonable access during normal business hours to inspect such
books and records at its cost.  Purchaser shall provide Seller with updates
regarding the Gross Profit of the Business on a monthly basis, such reports to
be provided with 30 days after the end of each month in the Earn-Out Period.

       Purchaser shall pay to Seller the Earn-Out, if earned, within 45 business
days after the last day of month in which the first anniversary of the Closing
occurs. If Purchaser shall determine, after consultation with its independent
auditors, that the Gross Profit Target was not achieved, it shall so notify
Seller on or before the 45th business day after the last day of month in which
the first anniversary of the Closing occurs, and include in such notification
its calculation of the Gross Profit.  Seller shall have a period of 30 days
thereafter to present in writing to Purchaser any objections or disagreement
with respect to the calculation of  Gross Profit.  Such notice shall specify, in
reasonable detail, the nature and extent of such disagreement. 

       If Seller and Purchaser are unable to resolve any such disagreement with
respect to the calculation of Gross Profit within ten (10) days after delivery
by Seller of the notice referred to above, the disagreement shall be submitted
for final determination to a partner, mutually acceptable to Seller and
Purchaser, of Arthur Andersen LLP.  Such partner shall follow such procedures as
he or she deems appropriate for obtaining the necessary information in
considering the positions of Seller and Purchaser but shall not conduct an
independent audit.  The Arthur Andersen partner shall render his or her
determination on the matter within 30 days of its 

                                        12

<PAGE>

submission by Seller and Purchaser, and such determination shall be final, 
conclusive and binding upon Purchaser and Seller.

       The fees and expenses of the Arthur Andersen partner (A) shall be paid by
Seller if the Gross Profit for the Earn-Out Period, as determined by the Arthur
Andersen partner in accordance with GAAP, is less than $6.2 million, or (B)
shall be paid by Purchaser if the Gross Profit for the Earn-Out Period, as
determined by the Arthur Andersen partner in accordance with GAAP, is equal to
or greater than $6.2 million.

       (d)    ALLOCATION OF PURCHASE PRICE.  Purchaser shall prepare IRS Form
8594 allocating the Purchase Price in accordance with Section 1060 of the Code
and shall forward it within 120 days after the Closing to Seller for its
approval, which approval shall not be unreasonably withheld.  The parties agree
that Three Hundred Thousand Dollars ($300,000) of the aggregate Purchase Price
will be allocable to the Agreements Not to Compete.  Purchaser and Seller shall
each file with their respective federal income tax return for the tax year in
which the Closing occurs, IRS Form 8594 containing the information agreed upon
by the parties pursuant to the immediately preceding sentence.  Purchaser agrees
to report the purchase of the Assets, and Seller agrees to report the sale of
such Assets for income tax purposes (including but not limited to, on their
respective income tax returns, before any governmental agency charged with the
collection of income tax or in any judicial proceeding concerning the income tax
consequences of Purchaser's purchase or Seller's sale of the Assets hereunder)
in a manner consistent with the information agreed upon by the parties pursuant
to this Section 2.4(d) and contained in its IRS Form 8594.

       SECTION 2.5   CLOSING COSTS; TRANSFER TAXES AND FEES.  Seller shall be
responsible for any documentary and transfer taxes and any sales, use or other
taxes imposed by reason of the transfer of Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto.  Seller shall pay
the fees and costs of recording or filing all applicable conveyancing
instruments described in Section 3.2(a).



                                        13

<PAGE>

                                      ARTICLE 3

                                       CLOSING

       SECTION 3.1   CLOSING.  The Closing of the transactions contemplated
herein (the "Closing") shall be held at 10:00 a.m. local time on the Closing
Date at the offices of Kaye, Scholer, Fierman, Hays & Handler, LLP, 1999 Avenue
of the Stars, Los Angeles, California, unless the parties hereto otherwise
agree.

       SECTION 3.2   CONVEYANCES AT CLOSING.

       (a)    DOCUMENTS DELIVERED BY SELLER.  To effect the sale of the Assets
and assumption of the Assumed Liabilities Seller shall, at the Closing, execute
(as applicable) and deliver to Purchaser:

              (i)    one or more bills of sale, each in the form attached hereto
as Exhibit H, conveying in the aggregate all of Seller's owned personal property
included in the Assets;

              (ii)   Assignments of Personal Property Leases, each in the form
attached hereto as Exhibit I, with respect to the Personal Property Leases;

              (iii)  Assignments of Contracts, each in the form attached hereto
as Exhibit J, with respect to the Contract Rights;

              (iv)   Assignments of Seller's rights, title and interest to the
name "ALL POST, INC." and all variations thereof);

              (v)    the Ancillary Agreements;

              (vi)   releases of any Encumbrances on the Assets (the "Release
Documents"), including: (a) a UCC-2 Financing Statements executed by Sanwa
Business Credit Corporation and Westar Capital and affliates with regard to a
release of all liens and claims on the Assets and the Olive Street Property and
(b) a reconveyance or release of items 12, 13 and 14 of the preliminary Title
Policy;

              (vii)  the Deed of Trust in a form suitable for recording in the
Los Angeles County Recorder's Office and UCC-1 Financing Statement; 

              (viii) all other third party consents required for the valid
transfer of the Assets as contemplated by this Agreement, including the consents
specified on Schedule 4.4; and

              (ix)   such other instruments as shall be requested by Purchaser
to vest in Purchaser title in and to the Assets in accordance with the
provisions hereof.

       (b)    DOCUMENTS DELIVERED BY PURCHASER.  To effect the sale of the
Assets and 

                                        14

<PAGE>

assumption of the Assumed Liabilities, Purchaser shall at the Closing execute 
and deliver to Seller (i) an instrument or instruments of assumption 
substantially in the form attached as Exhibit F, evidencing Purchaser's 
assumption, pursuant to Section 2.2, of the Assumed Liabilities (the 
"Assumption Document"); and (ii) the Ancillary Agreements.

       (c)    FORM OF INSTRUMENTS.  To the extent that a form of any document to
be delivered hereunder is not attached as an exhibit hereto, such documents
shall be in form and substance, and shall be executed and delivered in a manner,
reasonably satisfactory to Purchaser and Seller.

       (d)    CERTIFICATES; OPINIONS.  Purchaser and Seller shall deliver the
certificates, opinions of counsel and other matters described in Articles VII
and VIII.

                                      ARTICLE 4

                       REPRESENTATIONS AND WARRANTIES OF SELLER

       Seller hereby represents and warrants to Purchaser that: 

       SECTION 4.1   ORGANIZATION AND GOOD STANDING.  Seller is a corporation
duly incorporated in the State of California, validly existing and in good
standing under the laws thereof, and Seller is duly qualified or authorized to
do business in each jurisdiction in which it does business, or owns property, or
where such qualification or authorization is otherwise required by virtue of its
presence or activities.  Schedule 4.l sets forth a complete and correct list of
all jurisdictions in which Seller does business or is otherwise required to be
qualified or authorized to transact business or own property.

       SECTION 4.2   ASSETS.  Seller owns, and will transfer good and marketable
title to, the Assets and upon the consummation of the transactions contemplated
hereby, Purchaser will acquire good and marketable title to all of the Assets,
free and clear of any Encumbrances.  The Assets include all of the business,
properties, assets and rights of any kind, whether tangible or intangible, real
or personal, used in connection with or relating to the Business or in which
Seller has any interest (to the extent related to the Business) and are
sufficient to conduct the Business.  All tangible assets and properties which
are part of the Assets are in good operating condition and repair and are usable
in the ordinary course of business and conform in all respects to all applicable
Regulations (including Environmental Laws) relating to their construction, use
and operation.

       SECTION 4.3   LICENSES AND PERMITS.  Seller is duly licensed, with all
requisite permits and qualifications, as required by applicable law for the
purpose of conducting its business or owning its properties or both, in each
jurisdiction in which it does business or owns property or in which such
license, permit or qualification is otherwise required.  Seller is in compliance
in all respects with all such licenses, permits and qualifications. 
Schedule 4.3 sets forth a list of all such licenses, permits and qualifications.
There are no proceedings pending or threatened, to revoke or terminate any such
presently existing license, permit or qualification, and each such presently
existing license, permit or qualification can be renewed in the ordinary course
of 

                                        15

<PAGE>

business.

       SECTION 4.4   NO BREACH.  Except as set forth on Schedule 4.4, neither
the execution and delivery of this Agreement nor the consummation of the
Transactions will (A) violate, result in a breach of any of the terms or
provisions of, constitute a default (or any event that, with the giving of
notice or the passage of time or both, would constitute a default) under, result
in the acceleration of any indebtedness under or performance required by, result
in any right of termination of, increase any amounts payable under, decrease any
amounts receivable under, change any other rights pursuant to, or conflict with,
Seller's Articles of Incorporation, any agreement, indenture or other instrument
to which Seller is a party or by which any of its properties are bound, or any
judgment, decree, order or award of any court, governmental body or arbitrator
(domestic or foreign) applicable to Seller, or (B) require Seller to obtain any
authorization, consent, approval or waiver from, or make any filing with, any
Person, court or public body or authority.

       SECTION 4.5   AUTHORITY.  Seller has the right to sell, convey, transfer,
assign and deliver the Assets to Purchaser hereunder. This Agreement and all
agreements and instruments herein contemplated to be executed by Seller have
been duly authorized, executed and delivered by Seller and no other corporate
action is required on the part of Seller in order to authorize the execution,
delivery and performance of this Agreement.  This Agreement and all agreements
and instruments herein contemplated constitutes the valid and binding
obligations of Seller, enforceable in accordance with their respective terms. 
Schedule 4.5 hereto identifies those agreements which require the consent of
third parties to the Transactions, which consents have not been obtained.

       SECTION 4.6   SUBSIDIARIES.  Other than Post Optical Services, Seller has
no equity interest in any corporation, partnership, limited liability company or
similar entity.

       SECTION 4.7   FINANCIAL STATEMENTS. 

       (a)     The balance sheets of Seller at July 31, 1997, July 31, 1996 and
July 31, 1995 (individually, a "Balance Sheet" and collectively, the "Balance
Sheets") and the statements of operations and retained earnings and the
statements of cash flows of Seller for each of the 12 month periods then ended
and notes thereto (collectively, the "Financials"),  true and correct copies of
which are attached hereto as Schedule 4.7(a), (i) have been prepared from the
books and records of Seller in accordance with GAAP consistently applied with
prior periods, and (ii) are complete and correct and fairly present in
accordance with GAAP, in each case in all respects, the financial condition and
results of operations of Seller as of the dates and for the periods indicated
thereon.  The statements of operations included in the Financials do not contain
any items of extraordinary income or any other income not earned in the ordinary
course of business.

       (b)    The unaudited balance sheet at March 31, 1998 (the "Interim
Balance Sheet"), and the unaudited statements of operations and retained
earnings and statements of cash flows for Seller for the nine month period then
ended and notes thereto (collectively, the "Interim 

                                        16

<PAGE>

Financials"), true and correct copies of which are attached hereto as 
Schedule 4.7(b), (i) have been prepared from the books and records of Seller 
in accordance with GAAP consistently applied with prior periods, and (ii) are 
complete and correct and fairly present, in each case in all respects, the 
financial condition and results of operations of Seller as of the dates and 
for the periods indicated thereon.

       (c)    The Financials have been audited by the independent accounting
firm of Ernst & Young LLP whose reports thereon are part of Schedule 4.7.  The
books of accounts of Seller have been maintained in all respects in accordance
with sound business practices, and there have been no transactions involving
Seller that properly should have been set forth therein in accordance with
generally accepted accounting principles that have not been accurately so set
forth.

       SECTION 4.8   ABSENCE OF CERTAIN CHANGES.  Except as disclosed on
Schedule 4.8, since March 31, 1998, there has not occurred (in each case with
respect only to the Assets or the Business):

       (a)    Any adverse change (whether absolute, accrued, contingent or
otherwise), condition (financial or otherwise), or results of operations not
reflected in the Financials or the Interim Financials and that has resulted in
or reasonably could result in a loss to Seller of more than $100,000 in the
aggregate;

       (b)    Any guarantee by Seller of any obligation, or any mortgage,
pledge or encumbrance on any of the properties or assets of Seller; other than
set forth on Schedule 2.2,  there are no Assumed Liabilities;

       (c)    Any amendment or modification of any Material Contract (as defined
below), or any termination of any agreement that would have been a Material
Contract were such agreement in existence on the date hereof;

       (d)    Any entering into of any written or oral agreements, contracts,
commitments or transactions that extend beyond the first anniversary hereof or
have obligations thereunder in excess of $25,000, including any purchase or sale
of any assets.

       (e)    Any increase in excess of $25,000 annually in the compensation
(including, without limitation, the rate of commissions) payable to, or any
payment of a cash bonus to, any employee or agent of, or consultant to, Seller;

       (f)    Any alteration in the manner of keeping the books, accounts or
records of Seller, or in the accounting practices therein reflected;

       (g)    Any declaration or payment of any dividends or distributions by
Seller, any acquisition or redemption by Seller of any of its equity securities
or any loan by Seller to any other Person;

                                        17

<PAGE>

       (h)    Any loss or threatened loss of a customer or customers during the
past two years to which Seller had annual sales in excess of $50,000 in either
year;

       (i)    Any damage or destruction to, or loss of, any assets or property
owned, leased or used by Seller (whether or not covered by insurance) in excess
of $5,000; or

       (j)    Any agreement to do any of the things described in the preceding
clauses (a) - (h) of this Section 4.8.

       SECTION 4.9   ABSENCE OF UNDISCLOSED LIABILITIES.  There are no
liabilities in excess of $1,000 with respect to the Assets or the Business
whether absolute, accrued, contingent or otherwise, and whether due or to become
due, not reflected on or reserved for on the Balance Sheet or the Interim
Balance Sheet, except as set forth in Schedule 4.9 and except for current
liabilities incurred in the ordinary course of business since the respective
dates thereof.  There are no commitments, contracts or undertakings covering the
purchases of items of inventory in excess of Seller's normal operating
requirements or covering the purchases of items of machinery and equipment in
excess of the requirements of  Seller.  Seller is not a party to, is not bound
by, nor has bid upon any contract or agreement that is adverse to the assets,
condition (financial or otherwise), business or prospects of Seller, that will
require future expenditures (including incurred costs and allocated overhead and
selling, general and administrative expense) in excess of reasonably anticipated
receipts by more than $10,000 in the aggregate, or on which Seller expects to
lose in excess of $10,000 in the aggregate.

       SECTION 4.10  ACCOUNTS RECEIVABLE.  Schedule 4.10 is an accurate aging of
the Accounts Receivable at May 31, 1998 which represent valid obligations
arising from sales actually made or services actually performed in the ordinary
course of business.  The Accounts Receivable as of such date and any Accounts
Receivable arising since such date are fully collectible, net of the reserves
set forth in the Balance Sheet, all of which reserves are adequate in accordance
with GAAP.  The positive difference between the Accounts Receivable and Accounts
Payable as of the Closing Date is at least $1.5 million.

       SECTION 4.11  REAL PROPERTY; REAL PROPERTY LEASES.  Other than the real
property to be leased pursuant to the Hollywood Lease and the Olive Lease, there
is no real property owned by, leased to (other than as set forth on Schedule
4.11), or otherwise used by Seller in connection with the Business.

       SECTION 4.12  ENVIRONMENTAL MATTERS.  Except as set forth in Schedule
4.12:

       (a)    As to the Assets and the Business, Seller is, and at all times has
been, in all respects in compliance in all material respects with all
Environmental Protection Laws;

       (b)    Seller has obtained or has timely applied for all permits,
licenses and other authorizations under Environmental Protection Laws which are
required in connection with the Business, all of which are in full force and
effect.  Seller is in compliance with all terms and conditions of such permits,
licenses and authorizations, no action or proceeding which reasonably could be
expected to result in the revocation or suspension of any such permits, 


                                        18

<PAGE>

licenses and authorizations is pending or, to the best of Seller's knowledge, 
threatened, and Seller has not engaged in any conduct which reasonably could 
be expected to cause revocation or suspension of any of its permits, licenses 
or authorizations under Environmental Protection Laws;

       (c)    Seller has not received at any time prior to the date hereof a
summons, citation, notice, directive, letter or other communication, written or
oral, from the EPA or any other federal, state, local or other governmental
agency or instrumentality, authorized pursuant to an Environmental Protection
Law, concerning any intentional or unintentional action or omission (except any
pertaining to emissions of fugitive dust and other non-hazardous particulates
that are routinely corrected) by Seller constituting a violation or potential
violation of any Environmental Protection Law, including, without limitation,
violations relating to the releasing, spilling, leaking, pumping, pouring,
emitting, emptying, dumping or otherwise disposing of any Regulated Substance
into the environment resulting in damage thereto or to the wildlife, biota and
other natural resources, and there exist no facts that would form the basis for
a finding of such a violation; and

       (d)    Seller has not received at any time prior to the date hereof any
summons, citation, notice, directive, letter or other communication, written or
oral, of any potential claim or liability under any Environmental Protection
Law, including, without limitation, any notification as a potentially
responsible party with respect to any Superfund or other clean-up site.  There
are no events, conditions, circumstances, activities, practices, incidents,
actions or plans at or concerning the operations of Seller which may (i)
interfere with or prevent continued compliance by Seller with any Environmental
Protection Law, (ii) give rise to any claim or liability under any Environmental
Protection Law, or (iii) form the basis for any claim, action, suit, proceeding,
hearing or investigation under any Environmental Protection Law.

       (e)    Except as set forth on Schedule 4.12(i) , Seller has not received
any notice from a governmental authority or otherwise of any health problem of
any current or former employee which in any way is or is alleged to be related
to the operation of the Business.

       SECTION 4.13  INTANGIBLE PERSONAL PROPERTY.

       (a)    There are no (i) patent, patent applications, copyright, copyright
applications, trademark, trademark applications (in any such case, whether
registered or required to be registered in the United States of America or
elsewhere), process, invention, trade secret, trade name, computer program,
formula and customer list (collectively, the "Intangible Personal Property") of
Seller related to, or necessary to continue the operation of, the Business, or
(ii) licenses or similar agreements or arrangements ("Licenses") to which Seller
is a party either as licensee or licensor for each such item of Intangible
Personal Property; and

       (b)    The conduct by Seller of the Business does not infringe the valid
patents, trademarks, trade secrets or trade names of others.

       SECTION 4.14  LABOR AND EMPLOYMENT AGREEMENTS.

                                        19

<PAGE>

       (a)    Schedule 4.14 sets forth as to those employees involved with the
Business, a complete and correct list of the following:

              (i)    Each employment, consulting, collective bargaining and
similar agreement, whether written or oral, to which Seller is a party or by
which it is bound; and

              (ii)   The name of (A) each employee of Seller who since January
1, 1997, was or is being paid $50,000 or more per year, and (B) each agent of or
consultant to Seller who since January 1, 1997 was or is being paid $50,000 or
more per year.

              As used in this Section 4.14, the word "agreement" includes both
oral and written contracts, understandings, arrangements and other agreements.

       (b)    Seller has complied in all material respects with all applicable
laws, rules and regulations relating to the employment of labor, including,
without limitation, those related to wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by appropriate
governmental authorities and has withheld and paid to the appropriate
authorities, or is holding for payment not yet due to such authorities, all
amounts required to be withheld from such employees and is not liable for any
arrears of wages, taxes, penalties or other sums for failure to comply with any
of the foregoing.

       (c)    No unfair labor practice complaint is pending against Seller
before the National Labor Relations Board or any federal, state or local agency
and no labor strike, grievance or other labor dispute affecting Seller is
pending or, to the best of Seller's knowledge, threatened.

       (d)    Except as set forth in Schedule 4.14, no organization effort, and
no sex discrimination, racial discrimination, age discrimination or other
employment-related allegation, claim, suit or proceeding, has been made or is
pending or, to the best of Seller's knowledge, threatened with respect to the
employees of Seller and no such effort, allegation, claim, suit or proceeding
has been made, raised, brought or threatened within the three-year period prior
to the date of this Agreement.

       (e)    No arbitration proceeding arising out of or under any collective
bargaining agreement applicable to Seller is pending and, to the best of
Seller's knowledge, no basis for any such proceeding exists.

       (f)    All reasonably anticipated obligations of Seller, whether arising
by operation of law, contract, past custom or otherwise, for unemployment
compensation benefits, pension benefits, advances, salaries, bonuses, vacation
and holiday pay, sick leave and other forms of compensation payable to the
employees or agents of Seller in respect of the services rendered by any of them
on or prior to the date of the Financials have been paid or adequate accruals
therefor have been made in the books and records of Seller and in the
Financials.  All such obligations in respect of services rendered on or prior to
the date hereof have been paid as of the date hereof, or adequate accruals
therefor have been made on the Interim Balance Sheet, in accordance with 


                                        20

<PAGE>

GAAP. All accrued obligations of Seller applicable to its employees, whether 
arising by operation of law, contract, past custom or otherwise, for payments 
to trusts or other funds or to any governmental agency, with respect to 
unemployment compensation benefits, social security benefits or any other 
benefits for employees, with respect to employment of said employees through 
the date of the Financials have been paid or adequate accruals therefor have 
been made on the books and records of Seller and in the Financials in 
accordance with GAAP.  All such obligations with respect to employment of 
employees through the date hereof have been paid as of the date hereof, or 
adequate accruals therefor have been made on the Interim Balance Sheet, in 
accordance with GAAP.

       SECTION 4.15  EMPLOYEE BENEFIT PLANS: ERISA.

       (a)    Except as set forth in Section 4.15(a) of the Disclosure Schedule,
Seller (i) does not maintain, contribute to or have any obligation with respect
to, and none of the employees of the Business is covered by, any bonus, deferred
compensation, severance pay, pension, profit-sharing, retirement, insurance, or
other fringe benefit plan, arrangement or practice, written or otherwise, or any
other "employee benefit plan," as defined in Section 3(3) of ERISA, whether
formal or informal (collectively, the "Plans"),  (ii) is not a party to a
contract for the employment of any employee of the Business or any other person
who renders services to the Business, and (iii) does not have any ERISA
Affiliates.  None of the Plans is, and neither Seller nor any of its ERISA
Affiliates has ever maintained or had an obligation to contribute to, (i) a plan
subject to Section 412 of the Code or Title I, Subtitle B, Part 3 of ERISA, (ii)
a "multi employer plan," as defined in Section 3(37) of ERISA (a "Multi employer
Plan"), (iii) a "multiple employer plan," as defined in ERISA or the Code, or 
(iv) a funded welfare benefit plan, as defined in Section 419 of the Code. 
Seller does not have any agreement or commitment to create or contribute to any
additional Plan, enter into any additional employment agreement or to modify or
change any existing Plan or employment agreement.  Section 4.15(a) of the
Disclosure Schedule contains a complete and accurate list of the following
information for each employee of the Business (including each employee who is on
a leave of absence or on layoff status): name, employer, job title(s), date of
hire, current salary and benefit arrangements, years of service for purposes of
eligibility, vesting, and benefit determination under any of the Plans, and
current status (E.G., active employee, on leave, etc.).  None of the employees
of the Business is a "leased employee," as defined in Section 414(n) of the
Code.

       (b)    With respect to each Plan, Seller has heretofore delivered or
caused to be delivered to Purchaser true, correct and complete copies of  (i)
all documents that comprise the most current version of such Plan, including any
related trust agreements, insurance contracts, or other funding or investment
agreements and any amendments thereto, and (ii) with respect to each Plan that
is an "employee benefit plan," as defined in Section 3(3) of ERISA, (A) the
three most recent Annual Reports (Form 5500 Series) and accompanying schedules
for each of the Plans for which such a report is required, (B) the most current
summary plan description (and any summary of material modifications), (C) the
three most recent certified financial statements for each of the Plans for which
such a statement is required or was prepared, and (D) for each Plan intended to
be "qualified" within the meaning of Section 401(a) of the Code, all Internal
Revenue Service determination letters issued with respect to such Plan.  Except
as set forth in 

                                        21

<PAGE>

Section 4.16(b) of the Disclosure Schedule, since the date of the foregoing 
documents,  there has not been any change in the assets or liabilities of any 
of the Plans or any change in their terms and operations that could 
reasonably be expected to affect or alter the tax status or affect the cost 
of maintaining such Plan, and  none of the Plans has been or will be amended 
prior to the Closing Date.   Each of the Plans can be amended, modified or 
terminated by Seller  within a period of thirty (30) days, without payment of 
any additional compensation or amount or the additional vesting or 
acceleration of any such benefits, except to the extent that such vesting is 
required under the Code upon the complete or partial termination of any Plan 
intended to be qualified within the meaning of Section 401(a) of the Code.

       (c)    Seller has performed and complied in all respects with all of its
obligations under and with respect to the Plans, and each of the Plans has, at
all times, in form, operation and administration complied in all respects with
its terms, and, where applicable, the requirements of all applicable laws.  Each
Plan that is intended to be "qualified" within the meaning of Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified
and nothing has occurred that reasonably could be expected to adversely affect
such qualified status.

       (d)    Seller has made all contributions with respect to a Plan that are
required to have been made as of the date hereof under the terms thereof, or
under the terms of any related insurance contract, or any applicable law.  

       (e)    All Plans that are group health plans have been operated in
compliance with the continuation coverage requirements of Section 4980B of the
Code (and any predecessor provisions) and Part 6 of Title I of ERISA ("COBRA").
Seller does not have any obligation to provide health benefits or other 
non-pension benefits to any retired or other former employees, except as
specifically required by COBRA.

       (f)    Neither Seller nor any other "disqualified person" or "party in
interest," as defined in Section 4975 of the Code and Section 3(14) of ERISA,
respectively, has engaged in any "prohibited transaction," as defined in
Section 4975 of the Code or Section 406 of ERISA, with respect to any Plan , and
Seller is not aware of any fiduciary violations under ERISA with respect to any
Plan, that could subject Seller  (or any employee thereof) to any penalty or tax
under Section 502(i) of ERISA or Sections 4971 and 4975 of the Code.

       (g)    Except as set forth in Section 4.15(g) of the Disclosure Schedule,
with respect to any Plan:  (i) no filing, application or other matter is pending
with the Internal Revenue Service, the Pension Benefit Guaranty Corporation, the
United States Department of Labor or any other governmental body, (ii) there is
no action, suit or claim pending (and Seller is not aware of any basis for such
a claim), other than routine claims for benefits, and (iii) there are no
outstanding liabilities for taxes, penalties or fees.

       (h)    Seller has not incurred any liability or taken any action, and is
not  aware of any event that has occurred or is likely to occur,  that could
cause any one of them to incur any liability (i) under Section 412 of the Code
or Title IV of ERISA with respect to any "single-

                                        22

<PAGE>

employer plan" (as defined in Section 4001(a)(15) of ERISA), (ii) on account 
of a partial or complete withdrawal (as defined in Sections 4203 and 4205 of 
ERISA, respectively) with respect to any Multi employer Plan,  (iii) on 
account of unpaid contributions to any Multi employer Plan, or (iv) on 
account of any reorganization, insolvency or termination of any Multi 
employer Plan. 

       (i)    Neither the execution and delivery of this Agreement nor the
consummation of any or all of the Transactions will:  (i) entitle any current or
former employee of the Business to severance pay, unemployment compensation or
any similar payment, (ii) accelerate the time of payment or vesting or increase
the amount of any compensation due to any such employee or former employee, or
(iii) directly or indirectly result in any payment made or to be made to or on
behalf of any person to constitute a "parachute payment" within the meaning of
Section 280G of the Code.

       SECTION 4.16  MATERIAL CONTRACTS AND RELATIONSHIPS.

       (a)    Except for agreements specifically identified on other schedules
hereto, Schedule 4.16(a) sets forth a complete and correct list of the
following, in each case to the extent related to the Business:

              (i)    All agreements (or groups of agreements with one or more
       related entities) between Seller and any customer or supplier in excess
       of $10,000 and all agreements and purchase orders extending beyond 12
       months;

              (ii)   In each case to the extent related to Seller, all
       agreements that relate to the borrowing or lending by Seller of any money
       or that create or continue any claim, lien, charge or encumbrance
       against, or right of any third party with respect to, any asset of
       Seller; 

              (iii)  All agreements by which Seller leases any real property,
       has the right to lease any real property or leases capital equipment or
       leases any other personal property, and all other leases involving Seller
       as lessee or lessor;

              (iv)   All agreements to which Seller is a party not in the
       ordinary course of business;

              (v)    All contracts or commitments relating to commission
       arrangements with others;

              (vi)   All license agreements, whether as licensor or licensee;

              (vii)  All agreements between Seller and its sales
       representatives;

              (viii) All agreements between Seller and its customers relating to
       volume rebates or price reductions;


                                        23

<PAGE>

              (ix)   All other agreements to which Seller is a party or by which
       it is bound and that involve $20,000 or more or that extend for a period
       of one year or more;

              (x)    All other agreements to which Seller is a party or by which
       it is bound and that are or may be material to the assets, liabilities
       (whether absolute, accrued, contingent or otherwise), condition
       (financial or otherwise), results of operations, business or prospects of
       Seller; and

              (xi)   A current list of Seller's active customers.

As used in this Section 4.16, the word "agreement" includes both oral and
written contracts, leases, understandings, arrangements and all other
agreements.  The term "Material Contracts" means the agreements of Seller
required to be disclosed on Schedule 4.16(a), including agreements specifically
identified in other schedules hereto.

       (b)    All of the Material Contracts are in full force and effect, are
valid and binding and are enforceable in accordance with their terms in favor of
Seller.  There are no liabilities of any party to any Material Contract arising
from any breach or default of any provision thereof and no event has occurred
that, with the passage of time or the giving of notice or both, would constitute
a breach or default by Seller or, to the best of Seller's knowledge, any other
party thereto.

       (c)    Seller (i) has fulfilled all obligations required pursuant to each
Material Contract to have been performed by it prior to the date hereof, and
(ii) as far as reasonably foreseeable based on current conditions, will be able
to fulfill all of its obligations under the Material Contracts that remain to be
performed after the date hereof.

       (d)    Schedules 4.16(b), (c) and (d) set forth a complete and correct
list of each (i) customer (or related group of customers) with whom Seller did
$50,000 or more of business during the last fiscal year or the current fiscal
year, (ii) supplier (or related group of suppliers) with whom Seller did $50,000
or more of business during the last fiscal year or the current fiscal year, and
(iii) agent (or related group of agents) or Representative (or related group of
Representatives) who was paid $25,000 or more by Seller during the last fiscal
year or the current fiscal year, respectively.

       (e)    Seller has maintained and continues to maintain good relations
with its customers, suppliers and agents and, except as set forth in Schedule
4.16(e), Seller does not reasonably expect that any customer (to which Seller
had annual sales in excess of $50,000 during the past two years), supplier or
agent will stop doing business with Seller or will change the terms on which
such customer, supplier or agent has done business with Seller in the past.

       SECTION 4.17  INVENTORY.  Except for tape stock and work in progress and
as disclosed on Schedule 4.17, Seller has no inventory relating to the Business.

       SECTION 4.18  ABSENCE OF CERTAIN BUSINESS PRACTICES.  Except as disclosed
on Schedule 4.18, neither Seller nor any employee, agent or other person acting
on behalf of Seller has, 

                                        24

<PAGE>

directly or indirectly, given or agreed to give any gift or similar benefit 
to any customer, supplier, competitor or governmental employee or official 
(domestic or foreign) related to the Business that would subject Seller to 
any damage or penalty in any civil, criminal or governmental litigation or 
proceeding.

       SECTION 4.19  COMPLIANCE WITH LAWS.  Except as set forth on Schedule
4.19, the operation, conduct and ownership of the property or the Business are
being, and at all times have been, conducted, in all respects, in material
compliance with all federal, state, local and other (domestic and foreign) laws,
rules, regulations and ordinances (including without limitation, those relating
to employment discrimination, occupational safety, conservation or corrupt
practices) and all judgments and orders of any court, arbitrator or governmental
authority applicable to it.  Except as set forth on Schedule 4.19, there are no
proposed federal, state, local and other (domestic or foreign) law, rule,
regulation, ordinance, order, judgment, decree, governmental taking,
condemnation or other proceeding that would be applicable to the business,
operations or properties of Seller.

       SECTION 4.20  LITIGATION.  Schedule 4.20 sets forth a complete and
correct list, together with a status report, of each legal, administrative,
arbitration or other proceeding, or governmental investigation, to which Seller
is a party (or by which Seller's properties are affected), or was a party or was
otherwise affected (or by which any of its properties were affected) during the
past three years.  Except as set forth on Schedule 4.20, there is no legal,
administrative, arbitration or other proceeding, or any governmental
investigation, pending or, to the best of Seller's knowledge,  threatened
against or otherwise affecting Seller or any of its assets.  Seller has given in
a timely manner to its insurers all notices required to be given under each of
its insurance policies, if any, with respect to all of the claims and actions
disclosed on Schedule 4.20, and no insurer has denied coverage of any of such
claims or actions or rejected any of the claims with respect thereto.

       SECTION 4.21  TAXES.  Except as set forth on Schedule 4.21:

       (a)    Seller has timely filed all Tax returns and reports required to
have been filed by it for all taxable periods ending on or prior to the date
hereof; 

       (b)    All Taxes of Seller for all taxable periods ending on or prior to
the date hereof have been paid or have been adequately reserved for on the
Interim Balance Sheet.  The Tax returns and reports filed are true and correct
in all respects;

       (c)    None of such returns contains, or will contain, a disclosure
statement under Section 6662 of the Code (or any predecessor statute) or any
similar provision of state, local or foreign law;

       (d)    Seller has not received notice that the IRS or any other taxing
authority has asserted against Seller any deficiency or claim for additional
Taxes;

       (e)    All Tax deficiencies asserted or assessed against Seller have been
paid or finally 

                                        25

<PAGE>

settled;

       (f)    There is no pending or, to the best of Seller's knowledge,
threatened action, audit, proceeding, or investigation with respect to (i) the
assessment or collection of Taxes of Seller or (ii) a claim for refund made by
Seller with respect to Taxes previously paid in connection therewith;

       (g)    All amounts that are required to be collected or withheld by
Seller or with respect to Taxes of Seller have been duly collected or withheld;
all such amounts that are required to be remitted to any taxing authority have
been duly remitted;

       (h)    Neither the IRS nor any state, foreign or local taxing authority
has examined any income tax return of Seller;

       (i)    Seller has not waived any statute of limitations (that have not
expired as of the date hereof) with respect to the assessment of any Tax;

       (j)    Seller has not taken any action not in accordance with past
practice that would have the effect of deferring any Tax liability of Seller
from any taxable period ending on or before the date hereof to any taxable
period ending after such date;

       (k)    No consent has been filed under Section 341(f) of the Code with
respect to Seller;

       (l)    There are no liens for Taxes due and payable upon any assets of
Seller;

       (m)    Seller has not participated in, or cooperated with, an
international boycott within the meaning of Section 999 of the Code;

       (n)    Seller is not currently required to include in income any
adjustment pursuant to Section 481(a) of the Code (or similar provisions of
other law or regulations) by reason of a change in accounting method nor does
Seller have any knowledge that the IRS (or other taxing authority) has proposed,
or is considering, any such change in accounting method;

       (o)    Seller is not a party to any agreement, contract, arrangement or
plan that would result in the payment of any "excess parachute payment" within
the meaning of Section 280G of the Code;

       (p)    None of the assets of Seller is property that is required to be
treated as owned by any other person pursuant to the "safe harbor lease"
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954 as
amended and in effect immediately prior to the enactment of the Tax Reform Act
of 1986 and none of the assets of Seller is "tax exempt use property" within the
meaning of Section 168(h) of the Code; and

       (q)    None of the assets of Seller secures any debt the interest on
which is tax exempt under Section 103 of the Code.

                                        26

<PAGE>

       SECTION 4.22  INSURANCE MATTERS.

       (a)    Schedule 4.22 sets forth a complete and correct list of:

              (i)    All insurance policies and of all claims made by Seller on
              any liability or other insurance policies during the past three
              years (other than worker's compensation claims);

              (ii)   All insurance currently in place and accurately sets forth
              the coverages, deductible amounts, carriers and expiration dates
              thereof; and

              (iii)  All insurance with respect to which the policy period has
              expired, but for which certain of the coverage years are still
              subject to audit or retrospective adjustment by the carrier, and
              accurately sets forth such coverage years and the coverages,
              deductible amounts, carriers and expiration dates hereof.

       (b)    There are no outstanding requirements or recommendations by any
insurance company that issued any policy of insurance to Seller or by any board
of underwriters or other similar body exercising similar functions or by any
governmental authority exercising similar functions that require or recommend
any changes in the conduct of the Business or any repairs or other work to be
done on or with respect to any of the Assets.

       (c)    Except as set forth on Schedule 4.22, no notice or other
communication has been received by Seller from any insurance company within the
two years preceding the date hereof canceling or amending or increasing the
annual or other premiums payable under any of its insurance policies, and no
such cancellation, amendment or increase of premiums is threatened.

       (d)    During the past two years, Seller has maintained occurrence-based
comprehensive general liability and completed operations insurance (including
product liability insurance) with a single combined annual limit of at least
$1,000,000, and no claims have been made or paid, and no claims are currently
pending, under any of such comprehensive general liability insurance policies.

       (e)    No lawsuits have been filed and no claims have been made or
threatened against Seller as a result of accidents which occurred during the
one-year period prior to the date hereof that would give rise to a claim with
respect to any services provided by or products designed, manufactured, or sold
by Seller or the operations of Seller.

       SECTION 4.23  NO POWERS OF ATTORNEY OR SURETYSHIPS.  Except as set forth
on Schedule 4.23, with respect to the Business or the Assets (i) Seller has not
granted any general or special powers of attorney and (ii) Seller does not have
any obligation or liability (whether actual, contingent or otherwise) as
guarantor, surety, co-signer, endorser, co-maker, indemnitor, obligor on an
asset or income maintenance agreement or otherwise in respect of the obligation
of any person, corporation, partnership, joint venture, association,
organization or other entity.

                                     27
<PAGE>

       SECTION 4.24  BROKERAGE FEES.  No Person is entitled to any brokerage or
finder's fee or other commission from Seller in respect of this Agreement or the
Transactions.

       SECTION 4.25  BANKING FACILITIES.  Schedule 4.25 sets forth, with respect
to the Business, a complete and correct list of:

       (a)    Each bank, savings and loan or similar financial institution in
which Seller has an account or safety deposit box and the numbers of such
accounts or safety deposit boxes maintained thereat; and

       (b)    The names of all persons authorized to draw on each such account
or to have access to any such safety deposit box, together with a description of
the authority (and conditions thereto, if any) of each person with respect
thereto.

       SECTION 4.26  MACHINERY, EQUIPMENT AND OTHER PERSONAL PROPERTY; PERSONAL
PROPERTY LEASES.  Except as set forth in Schedule 4.26, Seller owns all of the
machinery, equipment, vehicles, furniture, fixtures, leasehold improvements,
repair parts, tools and other property (collectively, the "Personal Property")
used by Seller in connection with, or relating to, the Business.  All such
Personal Property is in good operating condition and sufficient to carry on the
Business in the normal course as it is presently conducted and is free from
defects, whether patent or latent.  Schedule 4.26 sets forth a complete and
correct summary description and identification of each lease (a "Personal
Property Lease") of personal property used in the Business or constituting an
Asset under which Seller is either a lessee, sublessee, lessor or sublessor. 
Except as set forth in Schedule 4.26:

       (a)    Each Personal Property Lease is a valid and binding obligation of
Seller that is a party thereto, and each such Personal Property Lease is a valid
and binding obligation of each of the other parties thereto; and 

       (b)    Neither Seller nor any other party to a Personal Property Lease is
in default with respect to any term or condition thereof, and no event has
occurred that, with the passage of time or the giving of notice or both, would
constitute a default thereunder or would cause the acceleration of any
obligation of any party thereto or the creation of a lien or encumbrance upon
any asset of Seller.

       SECTION 4.27  PRODUCT WARRANTY AND LIABILITY.  Each product designed,
manufactured, or sold by Seller in its conduct of the Business and all services
performed by Seller in the Business have been in conformity in all respects with
all applicable contractual commitments and all express and implied warranties,
except for returns of duplicated tapes in an immaterial amount consistent with
Seller's history and standard industry experience.  Seller does not have any
liability, and there is no basis for any present or future action, suit or other
proceeding giving rise to any liability, (i) for replacement or repair of any
such product or other damages in connection therewith, or (ii) arising out of
any injury to persons or property as a result of any such product or any
services performed by Seller.  Seller has not received any notice that an
action, suit or proceeding has been, or in the future may be, made alleging that
products or 

                                      28
<PAGE>

services of Seller are or were defective in any respect.

       SECTION 4.28  STANDARDS AND CERTIFICATIONS.  Products previously
designed, manufactured, sold and leased by Seller met and had received at the
time of their design, manufacture and sale, and products currently designed,
manufactured, sold and leased by Seller meet and have received, all standards
established by relevant standard-setting organizations and all certifications
from all relevant safety and standards testing and certifying organizations, if
any, as were or are, as the case may be, necessary for such products to comply
with all applicable fire, safety and similar codes and regulations.

       SECTION 4.29  DEED OF TRUST.   Seller has good and marketable title to
the Olive Street Property, free and clear of all liens, claims, security
interests, charges and encumbrances except for (i) real property taxes not
delinquent and (ii) those exceptions to title listed as items 2 through 11 in
Schedule B of the Commitment for Title Insurance, dated May 20, 1998 at 7:30
a.m., issued by First American Title Company of Los Angeles.  The Deed of Trust
shall constitute on the Closing Date, a valid first lien and valid first
priority security interest on the Olive Street Property, subject only to
Permitted Encumbrances.  The fair market value of the Olive Street Property
exceeds $3,000,000.  The Olive Street Property is in the county of Los Angeles.

       SECTION 4.30  TAX CLEARANCE.  Purchaser has no obligation to withhold any
portion of the Purchase Price for tax purposes.

       SECTION 4.31  DISCLOSURE.  The information provided by Seller in this
Agreement, including, without limitation, the schedules hereto, the written
information provided to Purchaser in connection with its due diligence review of
Seller, and in any other writing delivered pursuant hereto does not and will not
contain any untrue statement of a fact or, omit to state a fact required to be
stated herein or therein or necessary to make the statements and facts contained
herein or therein, in light of the circumstances under which they are made, not
false or misleading, it being understood by Purchaser that the foregoing shall
not apply to projections, forecasts or predictions made by Seller regarding the
Business.  Copies of all documents heretofore or hereafter delivered or made
available by Seller to Purchaser pursuant hereto were or will be complete and
accurate records of such documents.

                                      ARTICLE 5

                     REPRESENTATIONS AND WARRANTIES OF PURCHASER

       The Purchaser hereby represents and warrants to Seller that:

       SECTION 5.1   ORGANIZATION AND CORPORATE AUTHORITY.  Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of California.  Purchaser has all requisite corporate power
and authority to enter into this Agreement and to consummate the Transactions. 
This Agreement and all agreements and instruments herein contemplated to be
executed by Purchaser have been duly authorized, executed and delivered by
Purchaser and no other corporate action is required on the part of Purchaser in
order to authorize 

                                      29
<PAGE>

the execution, delivery and performance of this Agreement. This Agreement and 
all agreements and instruments herein contemplated are the valid and binding 
agreements of Purchaser, enforceable against Purchaser in accordance with 
their respective terms. 

       SECTION 5.2   NO BREACH; CONSENTS AND APPROVALS.  Neither the execution
and delivery of this Agreement or the related agreements and instruments
contemplated hereby nor the consummation of the Transactions will violate,
result in a breach of any of the terms or provisions of, constitute a default
(or any event that, with the giving of notice or the passage of time or both,
would constitute a default) under, result in the acceleration of any
indebtedness under or performance required by, result in any right of
termination of, increase any amounts payable under, decrease any amounts
receivable under, change any other rights pursuant to, or conflict with, any
agreement, indenture or other instrument to which Purchaser is a party or by
which any of its property is bound, its charter documents, or any judgment,
decree, order or award of any court, governmental body or arbitrator (domestic
or foreign) applicable to Purchaser.  Subject to Section 8, all consents,
approvals and authorizations of, and declarations, filings and registrations
with, any governmental or regulatory authority (domestic or foreign) or any
other person (either governmental or private) required in connection with the
execution and delivery by Purchaser of this Agreement and the related agreements
and instruments contemplated hereby or the consummation of the Transactions have
been obtained, made and satisfied.

       SECTION 5.3   BROKERAGE FEES.  No Person is entitled to any brokerage or
finder's fee or other commission from Purchaser in respect of this Agreement or
the Transactions.

       SECTION 5.4   SEC DOCUMENTS.  Purchaser's Quarterly Report on Form 10-Q,
as amended, for the quarter ended March 31, 1998 complied as to form in all
material respects with the applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission thereunder.  Purchaser has not filed a Current Report on
Form 8-K since March 31, 1998 (it being understood by Seller that Purchaser
intends to file a Form 8-K with respect to the Transactions after the Closing).

                                      ARTICLE 6

                          COVENANTS OF SELLER AND PURCHASER

       Seller and Purchaser each covenant with the other as follows:

       SECTION 6.1   FURTHER ASSURANCES.  Upon the terms and subject to the
conditions contained herein, the parties agree, both before and after the
Closing, (i) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (ii) to execute any documents, instruments or conveyances of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (iii) to cooperate with each other in
connection with the foregoing.  Without limiting the foregoing, the parties
agree to use their respective reasonable efforts (A) to obtain all 

                                      30
<PAGE>

necessary waivers, consents and approvals from other parties to the Contracts 
and Leases to be assumed by Purchaser; PROVIDED, HOWEVER, that neither 
Purchaser nor Seller shall be required to make any payments, commence 
litigation or agree to modifications of the terms thereof in order to obtain 
any such waivers, consents or approvals, (B) to obtain all necessary Permits 
as are required to be obtained under any Regulations, (C) to give all notices 
to, and make all registrations and filings with third parties, including 
without limitation submissions of information requested by governmental 
authorities, and (D) to fulfill all conditions to this Agreement.

       SECTION 6.2   NO SOLICITATION.

       (a)    NO SOLICITATION.  From the date hereof through the Closing Date,
neither Seller or its officers, directors or other Representatives will enter
into discussions, provide materials to or solicit interest from other potential
buyers concerning any sale of all or a portion of the Assets or the Business, or
any merger, consolidation, liquidation, dissolution or similar transaction
involving Seller.  In the event that Seller accepts any offer other than from
Purchaser during such exclusivity period, Seller will pay to Purchaser $400,000
from its closing proceeds.  Seller represents that it is not now engaged in
discussions or negotiations with any party other than Purchaser with respect to
any of the foregoing.  Seller agrees not to release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which
Seller is a party.

       (b)    NOTIFICATION.  Seller shall immediately notify Purchaser (orally
and in writing) if any discussions or negotiations are sought to be initiated,
or any proposal is made, or any information is requested with respect to any
proposed transaction described above.

       SECTION 6.3   NOTIFICATION OF CERTAIN MATTERS.  From the date hereof
through the Closing, Seller and Purchaser shall give prompt notice to the other
of (a) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement or in any exhibit or schedule hereto to be untrue or inaccurate
in any respect and (b) any failure by it to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement or any exhibit or schedule hereto; PROVIDED, HOWEVER, that such
disclosure shall not be deemed to cure any breach of a representation, warranty,
covenant or agreement or to satisfy any condition.

       SECTION 6.4   INVESTIGATION BY PURCHASER.  From the date hereof through
the Closing Date Seller shall, and shall cause any and all of its respective
employees and agents to, afford the Representatives of Purchaser and its
Affiliates complete access at all reasonable times to the Assets for the purpose
of inspecting the same (which inspection shall be conducted at an off-site
location mutually agreeable to Seller and Purchaser), and to the employees,
agents, attorneys, accountants, properties, Books and Records and Contracts of
Seller, and shall furnish Purchaser and its Representatives all financial,
operating and other data and information as Purchaser or its Affiliates, through
their respective Representatives, may reasonably request, including unaudited
individual and consolidated balance sheets and the related statements of income,
retained earnings and cash flow for each month from the date of the Balance
Sheet through the Closing Date within twenty (20) calendar days after the end of
each month which financial statements 

                                      31
<PAGE>

shall (i) be true, correct and complete, (ii) be in accordance with the books 
and records of Seller, and (iii) accurately set forth the assets, Liabilities 
and financial condition, results of operations and other information 
purported to be set forth therein in accordance with generally accepted 
accounting principles consistently applied.

       SECTION 6.5   CONDUCT OF BUSINESS.  From the date hereof through the
Closing, Seller shall, except as contemplated by this Agreement, or as consented
to by Purchaser in writing, operate the Business in the ordinary course of
business and in accordance with past practice and use its best efforts to
preserve intact the Business and its goodwill, and preserve the goodwill and
business relationships with suppliers, distributors, customers and others having
business relationships with Seller, and shall not take any action inconsistent
with this Agreement or with the consummation of the Closing.  Without limiting
the generality of the foregoing, with respect to the Business or the Assets,
Seller shall not, except as specifically contemplated by this Agreement or as
consented to by Purchaser in writing:

       (a)    enter into, extend, modify, terminate or renew any Contract or
Lease, except in the ordinary course of business;

       (b)    sell, assign, transfer, convey, lease, mortgage, pledge or
otherwise dispose of or encumber any of the Assets, or any interests therein,
except in the ordinary course of business, and without limiting the generality
of the foregoing, Seller shall continue to operate the Business consistent with
its past practices;

       (c)    incur any indebtedness for borrowed money or commitment to borrow
money, other than Financing Obligations, guarantee the obligations of others,
indemnify others or, except in the ordinary course of business, incur any other
Liability;

       (d)    (i)    take any action with respect to the grant of any bonus,
severance or termination pay or with respect to any increase of benefits payable
under Seller's severance or termination pay policies or agreements in effect on
the date hereof or increase in any manner the compensation or fringe benefits of
any employee or pay any benefit not required by any existing Employee Benefit
Plan or policy;

              (ii)   make any change in the key management structure of Seller,
including without limitation the hiring of additional management personnel or
the termination of existing management personnel;

              (iii)  adopt, enter into or amend any Employee Benefit Plan,
agreement (including without limitation any collective bargaining or employment
agreement), trust, fund or other arrangement for the benefit or welfare of any
employee, except for any such amendment as may be required or, in Seller's
reasonable determination, desirable to comply with applicable Regulations; or

              (iv)   fail to maintain all Employee Benefit Plans in accordance
with applicable Regulations in any respect;

                                      32
<PAGE>

       (e)    cause Seller to acquire by merger or consolidation with, or merge
or consolidate with, or purchase all or substantially all of the assets of, or
otherwise acquire any assets or business of any corporation, partnership,
association or other business organization or division thereof;

       (f)    willingly allow or permit to be done, any act by which any of the
Insurance Policies may be suspended, impaired or canceled; 

       (g)    (A)    fail to pay its accounts payable and any debts owed or
obligations due to it, or pay or discharge when due any Liabilities, in the
ordinary course of business; or

              (B)    fail to collect its accounts receivable in the ordinary
course of business; 

       (h)    fail to maintain the Assets in substantially their current state
of repair, excepting normal wear and tear or fail to replace consistent with
Seller's past practice inoperable, worn-out or obsolete or destroyed Assets;

       (i)    make any loans or advances on behalf of Seller to any partnership,
firm or corporation, or, except for expenses incurred in the ordinary course of
business, any individual;

       (j)    make any income tax election or settlement or compromise with tax
authorities on behalf of Seller;

       (k)    fail to comply with all Regulations applicable to it, the Assets
and the Business;

       (l)    intentionally do any other act which would cause any
representation or warranty of Seller in this Agreement to be or become untrue in
any respect;

       (m)    fail to use its best efforts to (i) retain Seller's employees and
(ii) maintain the Business so that such employees will remain available to
Seller on and after the Closing Date, (iii) maintain existing relationships with
suppliers, customers and others having business dealings with Seller and (iv)
otherwise to preserve the goodwill of the Business so that such relationships
and goodwill will be preserved on and after the Closing Date; 

       (n)    enter into any agreement, or otherwise become obligated, to do any
action prohibited hereunder; 

       (o)    make or change any tax election affecting the Assets in the hands
of Purchaser; or

       (p)    fail to pay, or cause to be paid, when due all Taxes for which
Seller is or may become liable or that are or may become payable with respect to
any taxable period ending on or prior to the Closing Date.

       SECTION 6.6   EMPLOYMENT AGREEMENTS.  

                                      33
<PAGE>

       (a)    Purchaser shall hire each employee of Seller identified on
Schedule 6.6, subject to Purchaser's Board of Director's right to terminate an
employee for performance-related matters, for a base salary for the employee
thereto as set forth on Schedule 6.6.  Purchaser shall not be required to hire
or offer employment to any other employee of Seller not set forth on Schedule
6.6.  In the event Purchaser determines to hire such persons, however, all
employees of the Business who become employed by Purchaser as of the Closing (or
upon expiration of an approved leave of absence) are hereinafter referred to
individually as a "Transferred Employee" and collectively as the "Transferred
Employees."

       (b     Effective as of the Closing (or the date an employee becomes a
Transferred Employee, if later), all Transferred Employees shall cease to
participate in, or accrue benefits under, any of Seller's Plans, and Seller
shall be solely responsible for all of its Plans and all obligations and
liabilities thereunder.  Purchaser shall not assume any Plan of Seller or any
obligation or liability thereunder.  Seller shall be responsible for (i)
terminating all employees of  Seller who are not employed by Purchaser, and
shall be responsible for any and all obligations and liabilities arising in
connection with such terminations, including without limitation, any severance
or other termination pay, retirement and welfare benefits, (ii) providing the
appropriate notices to the employees of the Business pursuant to Section 4980B
of the Code and Part 6 of Title I of ERISA, (iii) all liabilities, including
without limitation, the cost of extended insurance coverage, for any employee of
Seller not actively employed by Seller on the Closing Date until such time, if
ever, that such employee returns to active employment and is employed by
Purchaser.

       (c     Nothing contained in this Agreement shall confer upon any 
Transferred Employee that is not an Employee any right with respect to 
continuance of employment by Purchaser, nor shall anything herein interfere 
with the right of Purchaser to terminate the employment of any (i) 
Transferred Employee that is not an Employee at any time, with or without 
cause, and (ii) any Transferred Employee that is an Employee, at any time, 
with cause, or restrict Purchaser in the exercise of its independent business 
judgment in modifying any of the terms and conditions of the employment of 
the Transferred Employees that are not Partners after the Closing Date.

       (d     No provision of this Agreement shall create any third party
beneficiary rights in any Transferred Employee, any beneficiary or dependents
thereof, or any collective bargaining representative thereof, with respect to
the compensation, terms and conditions of employment and benefits that may be
provided to any Transferred Employee by Purchaser or under any benefit plan
which Purchaser may maintain.  

       (e     Prior to and until Closing, each employee of Seller, shall receive
his or her salary and hospitalization, medical, surgical, dental, life insurance
and any other welfare and benefits plans and programs, comparable to what such
employee of Seller is receiving as of the date of this Agreement.

       SECTION 6.7   LEASES.  At the Closing, the Hollywood Lease and Olive
Lease between Purchaser and Seller shall be executed and delivered to Purchaser
and Seller.

       SECTION 6.8   COLLECTION OF ACCOUNTS RECEIVABLE AND LETTERS OF CREDIT. 
At the 

                                      34
<PAGE>

Closing, Purchaser shall acquire hereunder, and thereafter Purchaser or its 
designee shall have the right and authority to collect for Purchaser's or its 
designee's account, all Accounts Receivable, letters of credit and other 
items which constitute a part of the Assets, and Seller shall within 48 hours 
after receipt of any payment in respect of any of the foregoing, properly 
endorse and deliver to Purchaser any letters of credit, documents, cash or 
checks received on account of or otherwise relating to any such receivables, 
letters of credit or other items related to Seller or the Business.  Seller 
shall promptly transfer or deliver to Purchaser or its designee any cash or 
other property that Seller may receive in respect of any deposit, prepaid 
expense, claim, contract, license, lease, commitment, sales order, purchase 
order, letter of credit or receivable of any character, or any other item, 
constituting a part of the Assets.

       SECTION 6.9   BOOKS AND RECORDS; TAX MATTERS.

       (a     BOOKS AND RECORDS.  Purchaser shall retain all Books and Records
in the possession of Purchaser after the Closing Date relating to the operation
of the Business prior to the Closing in accordance with all applicable records
retention Regulations, including without limitation, all Environment Laws and
occupational health and safety laws and regulations.  Each party agrees that it
shall cooperate with and make available to the other party, during normal
business hours, all Books and Records, information and employees (without
substantial disruption of employment) retained and remaining in existence after
the Closing which are necessary or useful in connection with any tax,
environmental or occupational health and safety inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter requiring any such
Books and Records, information or employees for any reasonable business purpose.
The party requesting any such Books and Records, information or employees shall
bear all of the out-of-pocket costs and expenses (including without limitation
attorneys' fees) reasonably incurred in connection with providing such Books and
Records, information or employees.  All information received pursuant to this
Section 6.9(a) shall be treated as confidential and not disclosed to any person
or entity other than the Representatives of Seller or Purchaser, as the case may
be, who need to know such information in connection with the proceedings
contemplated by this Section 6.9(a).

       (b     COOPERATION AND RECORDS RETENTION.  Seller and Purchaser shall (i)
each provide the other with such assistance as may reasonably be requested by
any of them in connection with the preparation of any return, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to Liability for Taxes, (ii) each retain and provide the other with any
records or other information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide the other with
any final determination of any such audit or examination, proceeding, or
determination that affects any amount required to be shown on any tax return of
the other for any period.  Without limiting the generality of the foregoing,
Purchaser and Seller shall retain, until the applicable statutes of limitations
(including any extensions) have expired, copies of all tax returns, supporting
work schedules, and other records or information that may be relevant to such
returns for all tax periods or portions thereof ending on or before the Closing
Date and shall not destroy or otherwise dispose of any such records without
first providing the other party with a reasonable opportunity to review and copy
the same.

                                      35

<PAGE>

       SECTION 6.10  BULK SALES.  It may not be practicable to comply or 
attempt to comply with the procedures of the "Bulk Sales Act" or similar law 
of any or all of the states in which the Assets are situated or of any other 
state which may be asserted to be applicable to the transactions contemplated 
hereby. Accordingly, to induce Purchaser to waive any requirements for 
compliance with any or all of such laws, Seller hereby agrees that the 
indemnity provisions of Section 10.2 hereof shall apply to any Damages of 
Purchaser or any institution providing financing to Purchaser arising out of 
or resulting from the failure of Seller or Purchaser to comply with any such 
laws.

       SECTION 6.11  CONFIDENTIALITY. The terms of the Confidentiality 
Agreement between Seller and Purchaser dated December 19, 1997 shall be 
extended to, and shall remain in full force and effect during the period 
between the date hereof and the Closing Date, unless earlier terminated.

       SECTION 6.12  CONTRACTS TO BE ASSIGNED.  To the extent that any of the 
contracts or agreements which (i) are to be assigned to Purchaser pursuant to 
this Agreement or (ii) constitute an Assumed Liability, are not assignable 
without the consent of a third party, which contracts or agreements Seller 
represents are limited to those contracts or agreements identified on 
Schedule 4.4 hereto, Seller shall use its best efforts to obtain the consent 
of the other such party to the assignment to Purchaser.  If any required 
consent is not obtained before the Closing and the Closing is consummated, 
Seller agrees to use its best efforts to obtain all such required consents 
and to enforce, on behalf of Purchaser, the rights of Seller under any such 
non-assigned contracts or agreements.  Seller further agrees to cooperate 
with Purchaser after such date in any reasonable arrangement (such as, but 
not limited to, sub-contracting, sub-licensing or sub-leasing) designed to 
ensure for Purchaser, on terms no less favorable than contemplated hereby, 
all of the economic benefits (after reflecting the related reasonable and 
necessary costs) under the applicable contracts without causing any such 
breach or right of termination.  Sellers shall remain liable for the 
performance of all duties and obligations relating to any contract or 
agreement not properly assigned hereunder. 
                                       
                                   ARTICLE 7

                       CONDITIONS TO SELLER'S OBLIGATIONS

       The obligations of Seller to consummate the transactions provided for 
hereby are subject, in the discretion of Seller, to the satisfaction, on or 
prior to the Closing Date, of each of the following conditions, any of which 
may be waived by Seller by written notice to Purchaser:

       SECTION 7.1   REPRESENTATIONS, WARRANTIES AND COVENANTS.  All 
representations and warranties of Purchaser contained in this Agreement shall 
be true and correct in all material respects at and as of the date of this 
Agreement and at and as of the Closing Date, except as and to the extent that 
the facts and conditions upon which such representations and warranties are 
based are expressly required or permitted to be changed by the terms hereof, 
and Purchaser shall have performed and satisfied in all material respects all 
agreements and covenants required 

                                       36
<PAGE>

hereby to be performed by it prior to or on the Closing Date.

       SECTION 7.2   NO ACTIONS OR COURT ORDERS.  No Action by any 
governmental authority or other person shall have been instituted or 
threatened which questions the validity or legality of the transactions 
contemplated hereby and which could reasonably be expected to damage Seller 
materially if the transactions contemplated hereby are consummated.  There 
shall not be any Regulation or Court Order that makes the purchase and sale 
of the Business or the Assets contemplated hereby illegal or otherwise 
prohibited.

       SECTION 7.3   ASSUMPTION DOCUMENT.  Purchaser shall have executed the 
Assumption Document.

       SECTION 7.4   ANCILLARY AGREEMENTS.  Purchaser shall have executed and 
delivered the Ancillary Agreements to which it is a party.

       SECTION 7.5   CERTIFICATES.  Purchaser shall furnish Seller with such 
certificates to evidence compliance with the conditions set forth in this 
Article VII as may be requested by Seller.
                                       
                                   ARTICLE 8

                     CONDITIONS TO PURCHASER'S OBLIGATIONS

       The obligations of Purchaser to consummate the transactions provided 
for hereby are subject, in the discretion of Purchaser, to the satisfaction, 
on or prior to the Closing Date, of each of the following conditions, any of 
which may be waived by Purchaser by written notice to Seller:

       SECTION 8.1   REPRESENTATIONS, WARRANTIES AND COVENANTS.  All 
representations and warranties of Seller contained in this Agreement shall be 
true and correct in all respects at and as of the date of this Agreement and 
at and as of the Closing Date, except as and to the extent that the facts and 
conditions upon which such representations and warranties are based are 
expressly required or permitted to be changed by the terms hereof, and Seller 
shall have performed and satisfied all agreements and covenants required 
hereby to be performed by it prior to or on the Closing Date.

       SECTION 8.2   CONSENTS; REGULATORY COMPLIANCE AND APPROVAL.  Any 
necessary consents to the assignment of all Contracts and Leases shall have 
been obtained, as well as the consents identified on Schedule 4.4 hereof.  
All Permits, consents, approvals and waivers from governmental authorities 
necessary to the consummation of the transactions contemplated hereby by 
Purchaser shall have been obtained.  Purchaser shall be satisfied that all 
approvals required under any Regulations to carry out the transactions 
contemplated by this Agreement shall have been obtained and that the parties 
shall have complied with all Regulations applicable to such transactions.

                                       37
<PAGE>

       SECTION 8.3   NO ACTIONS OR COURT ORDERS.  No Action by any 
governmental authority or other person shall have been instituted or 
threatened which questions the validity or legality of the transactions 
contemplated hereby and which could reasonably be expected to damage 
Purchaser, the Assets or the Business materially if the transactions 
contemplated hereby are consummated, including without limitation any 
material adverse effect on the right or ability of Purchaser to own, operate, 
possess or transfer the Assets after the Closing. There shall not be any 
Regulation or Court Order that makes the purchase and sale of the Business or 
the Assets contemplated hereby illegal or otherwise prohibited.

       SECTION 8.4   OPINION OF COUNSEL.  Seller shall have delivered to 
Purchaser an opinion of McDermott, Will & Emery, counsel to Seller, dated as 
of the Closing Date, in form and substance reasonably satisfactory to 
Purchaser, to the effect that:

       (a     Seller is a corporation duly incorporated, validly existing and 
in good standing under the laws of the State of California;

       (b     Seller has the necessary corporate authority to enter into this 
Agreement and the Ancillary Agreements to which it is a party and to 
consummate the transactions contemplated hereby and thereby;

       (c     The execution, delivery and performance of this Agreement and 
the Ancillary Agreements by Seller has been duly authorized, and this 
Agreement and each of the Ancillary Agreements to which it is a party 
constitute legally valid and binding obligations of Seller, enforceable 
against Seller, in accordance with their terms, except as limited by (i) 
bankruptcy, insolvency, reorganization, moratorium or other similar laws 
relating to creditors' rights generally or by equitable principles (whether 
considered in an action at law or in equity) and (ii) limitations imposed by 
federal or state law or equitable principles upon the availability of 
specific performance, injunctive relief or other equitable remedies;

       (d     The documents to be delivered by Seller at the Closing to 
effect the transfer and assignment to Purchaser of all right, title and 
interest in and to the Assets are effective to do so.

       (e     The Deed of Trust creates a lien upon the fee estate of the 
Olive Street Property in favor of the trustee named therein for the benefit 
of Purchaser.  The Deed of Trust creates a perfected security interest in 
favor of Purchaser in any fixtures situated on the Olive Street Property and 
described therein and in any personal property collateral described therein.

       SECTION 8.5   CERTIFICATES.  Seller shall furnish Purchaser with such 
certificates to evidence compliance with the conditions set forth in this 
Article VIII as may be reasonably requested by Purchaser.

       SECTION 8.6   MATERIAL CHANGES.  As of the Closing Date, since January 
31, 1998, there shall not have been any actual or threatened adverse change 
in the Business or the Assets or the liabilities, earnings, results of 
operations, condition (financial or otherwise) or prospects of Seller.

                                       38
<PAGE>

       SECTION 8.7   CONVEYANCING DOCUMENTS; RELEASE OF ENCUMBRANCES.  Seller 
shall have executed and delivered each of the documents described in Section 
3.2 hereof so as to effect the transfer and assignment to Purchaser of all 
right, title and interest in and to the Assets, and Seller shall have filed 
(where necessary) and delivered to Purchaser the Deed of Trust and all 
documents necessary to release the Assets from all Encumbrances, which 
documents shall be in a form reasonably satisfactory to Purchaser's counsel.

       SECTION 8.8   OTHER AGREEMENTS.  Seller shall have executed and 
delivered the Ancillary Agreements in the forms attached as exhibits hereto.

       SECTION 8.9   NONFOREIGN AFFIDAVIT.  Seller shall furnish Purchaser 
with an affidavit, stating, under penalty of perjury, such Seller's United 
States taxpayer identification number and that Seller is not a foreign 
person, pursuant to Section 1445(b)(2) of the Code.

       SECTION 8.10  CUSTOMER RELATIONS.  Purchaser shall be satisfied with 
the business relationship of Seller with any customer named in Section 
4.16(a)(i) of the Disclosure Schedule.

       SECTION 8.11  DUE DILIGENCE.  
Purchaser shall be satisfied, in its sole discretion, with the results of its 
due diligence investigation.

       SECTION 8.12  FINANCING.  Purchaser shall have obtained an amendment 
to its existing line of credit with Union Bank of California sufficient to 
provide Purchaser with the Cash Portion.

       SECTION 8.13  TITLE POLICY.  First American Title Insurance Company 
("Title Company") shall be ready, willing and able to issue at the Closing to 
Purchaser the Title Policy insuring that the Deed of Trust constitutes a 
first priority lien in favor of Purchaser against the Olive Street Property 
and listing therein no exclusions or exceptions to title other than those 
that have been reasonably approved by Purchaser in writing ("Permitted 
Encumbrances");

       SECTION 8.14  AGREEMENT WITH ERNST & YOUNG LLP.  Purchaser shall have 
entered into an agreement with Ernst & Young LLP, the Seller's independent 
auditors, with respect an audit of the Business suitable for inclusion in a 
Current  Report on Form 8-K, including the delivery of any consents needed 
from such firm related to such audit.

                                   ARTICLE 9

                                  RISK OF LOSS

       SECTION 9.1   RISK OF LOSS.  From the date hereof through and 
including the Closing Date, all risk of loss or damage to the Assets shall be 
borne by Seller, and thereafter shall be borne by Purchaser.  If any portion 
of the Assets is destroyed or damaged by fire or any other cause on or prior 
to the Closing Date, other than use, wear or loss in the ordinary course of 
business, Seller shall give written notice to Purchaser as soon as 
practicable after, but in any 

                                       39
<PAGE>

event within five (5) calendar days of, discovery of such damage or 
destruction, which notice shall set forth in detail the nature of such damage 
or destruction, the amount of insurance, if any, covering such Assets and the 
amount, if any, which Seller is otherwise entitled to receive as a 
consequence. Prior to the Closing, in the event of damage or destruction of 
any Assets, Purchaser shall have the option, which shall be exercised by 
written notice to Seller within ten (10) calendar days after receipt of 
Seller's notice or if there is not ten (10) calendar days prior to the 
Closing Date, as soon as practicable prior to the Closing Date, of (a) 
accepting such Assets in their destroyed or damaged condition in which event 
Purchaser shall be entitled to the proceeds of any insurance or other 
proceeds payable with respect to such loss and the Purchase Price shall be 
reduced by the amount, if any, mutually agreed upon between the parties, (b) 
excluding such Assets from this Agreement, in which event the Purchase Price 
shall be reduced by the amount allocated to such Assets, as mutually agreed 
between the parties or (c) terminating this Agreement in accordance with 
Section 11.1.  If Purchaser accepts such Assets, then after the Closing, any 
insurance or other proceeds shall belong, and shall be assigned to, Purchaser 
without any reduction in the Purchase Price; otherwise, such insurance 
proceeds shall belong to Seller.                                       

                                   ARTICLE 10

                                 INDEMNIFICATION

       SECTION 10.1  SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF SELLER. 
The representations and warranties made by Seller and Purchaser in this 
Agreement and any document, schedule, exhibit (other than the Hollywood Lease 
and the Olive Lease) or other instrument relating hereto shall survive the 
Closing Date for a period of two years, except that (a) with respect to 
taxation matters, such period shall be the longer of (i) two years and (ii) 
the applicable statute of limitations and (b)with respect to representations 
and warranties made in the Hollywood Lease or the Olive Lease, such period 
shall be the term of such lease. Notwithstanding anything contained in this 
Agreement, including, without limitation, this Section 10.1, any claims with 
respect to representations and warranties made in this Agreement or in any 
document or other instrument relating hereto shall survive and continue 
following the expiration of the survival periods stated above (i) if such 
claim is submitted in writing to the Indemnifying Party (as defined below) 
prior to the end of the survival periods stated in this Section 10.1 and 
identified as a claim for indemnification pursuant to this Agreement or (ii) 
if such claim is based upon fraud or willful breach or misrepresentation by 
Seller.  In either event, such claims shall survive indefinitely. The right 
to indemnification, payment of Damages or other remedy based on such 
representations, warranties, covenants, and obligations will not be affected 
by any investigation conducted with respect to, or any knowledge acquired (or 
capable of being acquired) at any time, whether before or after the 
execution and delivery of this Agreement or the Closing Date, with respect to 
the accuracy or inaccuracy of or compliance with, any such representation, 
warranty, covenant, or obligation.

       SECTION 10.2  INDEMNIFICATION BY SELLER.  Seller shall indemnify and 
hold harmless Purchaser and each of Purchaser's Affiliates, directors, 
officers, employees, attorneys, agents and Representatives (collectively, the 
"Affiliated Parties") in respect of any and all claims, losses, damages, 
liabilities, penalties, interest, costs and expenses, including, without 
limitation,

                                       40
<PAGE>

reasonable attorneys', accountants' and consultants' fees and other expenses 
(collectively, "Damages"), incurred by Purchaser or Purchaser's Affiliated 
Parties, together with interest on cash disbursements in connection 
therewith, at an annual rate equal to the Prime Rate then in effect, from the 
date such cash disbursements were made by Purchaser or any of their 
respective Affiliated Parties until paid by Seller, in connection with, or 
resulting from, any or all of the following:

       (a     Any failure to perform or comply with any covenant, agreement 
or obligation of Seller contained in this Agreement or any document or other 
instrument contemplated by this Agreement;

       (b     The Barsotti Action or the Compact Storage Action;

       (c     Any injury to persons or death or property damage resulting 
from or contributed to by any products designed, manufactured, sold or leased 
by Seller or any services performed by Seller if the accident, incident or 
occurrence giving rise to such claim, action, lawsuit or proceeding occurred 
prior to the Closing Date;

       (d     Failure to obtain any consent, waiver, release or approval 
specified on Schedule 4.4 hereto;

       (e     Liabilities of the Seller resulting from events occurring 
before or on the Closing Date, other than a liability or obligation which is 
included in the Assumed Liabilities; and

       (f     Any claim arising out of the failure of Seller to comply with 
the bulk transfer or bulk sales laws of any jurisdiction in accordance with 
Section 6.11;

provided, however, that Seller's obligations set forth in this Section shall 
not apply to any Damages that arise from or are related to any willful 
misconduct or gross negligence by Purchaser and provided, further, that in no 
event shall Seller be required to pay Damages (including Damages payable 
under the Secured Indemnity Agreement) in excess of $8,000,000.

       No claim, demand, suit or cause of action shall be brought against 
Seller under this Section 10.2 unless and until the aggregate amount of 
Damages exceeds $130,000, but then Seller shall be required to pay the full 
amount of such Damages; PROVIDED, HOWEVER, that this limitation shall not 
apply to any breach of any of the Seller's representations and warranties of 
which Seller had knowledge at any time prior to the date on which such 
representation and warranty is made or any intentional breach by Seller of 
any covenant or obligation.

       Seller acknowledges and agrees that the foregoing indemnification 
obligation of Seller shall be an unsecured obligation of seller (and a 
personal liability thereof), independent of those certain indemnification 
obligations set forth in the Secured Indemnity Agreement.

       SECTION 10.3  INDEMNIFICATION BY SELLER FOR ENVIRONMENTAL MATTERS.  For a
period of two (2) years, in addition to, and not by way of limitation on, the
indemnities set forth in Sec-

                                       41
<PAGE>

tion 10.2, Seller shall indemnify and hold harmless Purchaser and Purchaser's 
Affiliated Parties in respect of any and all claims, losses, damages, 
liabilities, declines in value of the Assets or the Business, penalties, 
interest, costs and expenses (including, without limitation, reasonable 
attorneys', accountants', and consultants' fees and other expenses) incurred 
by Purchaser or Purchaser's Affiliated Parties, together with interest on 
cash disbursements in connection therewith, at an annual rate equal to the 
Prime Rate then in effect, from the date such cash disbursements were made by 
Purchaser or any of Purchaser's Affiliated Parties until paid by Seller, in 
connection with, or resulting from, any Environmental Liabilities for 
Pre-Closing Matters including, without limitation, any of the matters 
described on Schedule 4.12, regardless of the diligence performed or 
investigation made by Purchaser or its Representatives with respect thereto. 

       SECTION 10.4  INDEMNIFICATION BY PURCHASER.  Purchaser shall indemnify 
and hold harmless Seller in respect of any and all Damages reasonably 
incurred by Seller, together with interest on cash disbursements in 
connection therewith, at an annual rate equal to the Prime Rate then in 
effect, from the date that such cash disbursements were made by Seller until 
paid by Purchaser, in connection with, or resulting from, any or all of the 
following:

       (a     Any breach of any representation or warranty made by Purchaser 
in Article V of this Agreement or in any document or other instrument 
relating hereto;

       (b     Any misrepresentation contained in any written statement or 
certificate furnished by Purchaser to Seller pursuant to this Agreement or 
the Transactions;

       (c     Any failure to perform or comply with any covenant, agreement 
or obligation of Purchaser contained in this Agreement or any document or 
other instrument contemplated by this Agreement; and

       (d)    Liabilities of the Business (to parties other than Seller or 
the shareholders or other affiliates of Seller) arising in relation to the 
Business, the Assets or the Assumed Liabilities (except as provided in 
Section 6.12 hereof) resulting from events occurring after the Closing Date;

provided, however, that Purchaser's obligations set forth in this Section 
shall not apply to any Damages that arise from or are related to any willful 
misconduct or gross negligence by Seller and provided further that in no 
event shall Purchaser be required to pay Damages in excess of $8,000,000.

       No claim, demand, suit or cause of action shall be brought against 
Purchaser under this Section 10.5 unless and until the aggregate amount of 
Damages exceeds $130,000, but then Purchaser shall be required to pay the 
full amount of such Damages; provided, however, that this limitation shall 
not apply to any breach of any of the Purchaser's representations and 
warranties of which Purchaser had knowledge at any time prior to the date on 
which such representation and warranty is made or any intentional breach by 
Purchaser of any covenant or obligation.

                                       42
<PAGE>

       SECTION 10.5  CLAIMS FOR INDEMNIFICATION.  Whenever any claim shall 
arise for indemnification under this Agreement, the party entitled to 
indemnification (the "Indemnified Party") shall promptly notify the party 
obligated to provide indemnification (the "Indemnifying Party") of the claim 
and, when known, the facts constituting the basis for such claim; provided, 
however, that the failure to so notify the Indemnifying Party shall not 
relieve the Indemnifying Party of its obligation hereunder to the extent such 
failure does not materially prejudice the Indemnifying Party.  In the event 
of any claim for indemnification hereunder resulting from or in connection 
with any claim or legal proceedings by a third party, the notice to the 
Indemnifying Party shall specify, if known, the amount or an estimate of the 
amount of the liability arising therefrom.

       SECTION 10.6  DEFENSE OF CLAIMS.  In connection with any claim giving 
rise to indemnity under this Agreement resulting from or arising out of any 
claim or legal proceeding by a person who is not a party to this Agreement, 
the Indemnifying Party at its sole cost and expense and with counsel 
reasonably satisfactory to the Indemnified Party may, upon written notice to 
the Indemnified Party, assume the defense of any such claim or legal 
proceeding if (a) the Indemnifying Party acknowledges to the Indemnified 
Party in writing, within fifteen (15) days after receipt of notice from the 
Indemnified Party, its obligations to indemnify the Indemnified Party with 
respect to all elements of such claim based upon the facts then reasonably 
known to such Indemnifying Party, (b) the Indemnifying Party provides the 
Indemnified Party with evidence reasonably acceptable to the Indemnified 
Party that the Indemnifying Party will have the financial resources to defend 
against such third-party claims and fulfill its indemnification obligations 
hereunder, (c) the third-party claim involves only money damages and does not 
seek an injunction or other equitable relief, and (d) settlement or an 
adverse judgment of the third-party claim is not, in the good faith judgment 
of the Indemnified Party, likely to establish a pattern or practice adverse 
to the continuing business interests of the Indemnified Party.  The 
Indemnified Party shall be entitled to participate in (but not control) the 
defense of any such action, with its counsel and at its own expense; 
PROVIDED, HOWEVER, that if there are one or more legal defenses available to 
the Indemnified Party that conflict with those available to the Indemnifying 
Party, or if the Indemnifying Party fails to take reasonable steps necessary 
to defend diligently the claim after receiving notice from the Indemnified 
Party that it believes the Indemnifying Party has failed to do so, the 
Indemnified Party may assume the defense of such claim; PROVIDED, FURTHER, 
that the Indemnified Party may not settle such claim without the prior 
written consent of the Indemnifying Party, which consent may not be 
unreasonably withheld.  If the Indemnified Party assumes the defense of the 
claim, the Indemnifying Party shall reimburse the Indemnified Party for the 
reasonable fees and expenses of counsel retained by the Indemnified Party and 
the Indemnifying Party shall be entitled to participate in (but not control) 
the defense of such claim, with its counsel and at its own expense.  If the 
Indemnifying Party thereafter seeks to question the manner in which the 
Indemnified Party defended such third party claim or the amount or nature of 
any such settlement, the Indemnifying Party shall have the burden to prove by 
a preponderance of the evidence that the Indemnified Party did not defend or 
settle such third party claim in a reasonably prudent manner.  The parties 
agree to render, without compensation, to each other such assistance as they 
may reasonably require of each other in order to insure the proper and 
adequate defense of any action, suit or proceeding, whether or not subject to 
indemnification hereunder.  If the indemnification provided for in this 
Article X is for 

                                       43
<PAGE>

any reason unenforceable, the party against whom indemnification was sought 
agrees to contribute to the claims for which such indemnification is 
unenforceable in such proportion as is appropriate to reflect the relative 
fault of such party, on the one hand, and the Indemnified Party, on the other 
hand, as well as any other relevant equitable considerations.

       SECTION 10.7  MANNER OF INDEMNIFICATION.  All indemnification payments 
hereunder shall be effected by payment of cash or delivery of a certified or 
official bank check in the amount of the indemnification liability.

       SECTION 10.8  DEED OF TRUST. Seller's payment obligations under the 
Secured Indemnity Agreement shall be secured by the Deed of Trust.  The Deed 
of Trust shall not secure any of Seller's other obligations under this 
Agreement. The Deed of Trust shall create a first priority lien in favor of 
Purchaser against the Olive Street Property.  Purchaser's lien under the Deed 
of Trust shall be insured by an ALTA Lender's Title Insurance Policy issued 
by First American Title Insurance Company ("Title Company") in the amount of 
$3,000,000 ("Title Policy"). The cost of the Title Policy shall be paid by 
Seller. Purchaser shall re-convey the Deed of Trust upon the occurrence, and 
subject to the terms and conditions, set forth in Section 19 of the Deed of 
Trust.

                                       44
<PAGE>

                                  ARTICLE 11

                                 MISCELLANEOUS

       SECTION 11.1  TERMINATION.

       (a     TERMINATION.  This Agreement may be terminated at any time prior
to Closing:

              (i0    By mutual written consent of Purchaser and Seller;

              (ii0   By Purchaser or Seller if the Closing shall not have 
occurred on or before June __, 1998; PROVIDED, HOWEVER, that this provision 
shall not be available to Purchaser if Seller has the right to terminate this 
Agreement under clause (iv) of this Section 11.1, and this provision shall 
not be available to Seller if Purchaser has the right to terminate this 
Agreement under clause (iii) of this Section 11.1;

              (iii0  By Purchaser if there is a breach of any representation 
or warranty set forth in Article IV hereof or any covenant or agreement to be 
complied with or performed by Seller pursuant to the terms of this Agreement 
or the failure of a condition set forth in Article VII to be satisfied (and 
such condition is not waived in writing by Purchaser) on or prior to the 
Closing Date, or the occurrence of any event which results or would result in 
the failure of a condition set forth in Article VIII to be satisfied on or 
prior to the Closing Date, PROVIDED that, Purchaser may not terminate this 
Agreement prior to the Closing Date if Seller has not had an adequate 
opportunity (in any event, not to exceed ten (10) calendar days) to cure such 
failure;

              (iv0   By Seller if there is a material breach of any 
representation or warranty set forth in Article V hereof or of any covenant 
or agreement to be complied with or performed by Purchaser pursuant to the 
terms of this Agreement or the failure of a condition set forth in Article 
VII to be satisfied (and such condition is not waived in writing by Seller) 
on or prior to the Closing Date, or the occurrence of any event which results 
or would result in the failure of a condition set forth in Article VIII to be 
satisfied on or prior to the Closing Date, PROVIDED that, Seller may not 
terminate this Agreement prior to the Closing Date if Purchaser has not had 
an adequate opportunity (in any event, not to exceed ten (10) calendar days) 
to cure such failure.

       (b     IN THE EVENT OF TERMINATION.  In the event of termination of this
Agreement:

              (i0    Each party shall redeliver all documents, work papers 
and other material of any other party relating to the transactions 
contemplated hereby, whether so obtained before or after the execution 
hereof, to the party furnishing the same (and shall destroy all copies in 
their possession); and

              (ii0   No party hereto shall have any Liability to any other 
party to this Agreement, except as stated in subsections (i) and (ii) of this 
Section 11.1(b) and Seller's obligations under Section 6.2, except for any 
willful breach of this Agreement occurring prior to 

                                      45

<PAGE>

the termination of this Agreement. 

       SECTION 11.2  NOTICES.  All notices, requests, demands and other 
communications hereunder shall be in writing and shall be deemed given if 
delivered personally or by facsimile transmission (with subsequent letter 
confirmation by mail) or three days after being mailed by certified or 
registered mail, postage prepaid, return receipt requested, to the parties, 
their successors in interest or their assignees at the following addresses, 
or at such other addresses as the parties may designate by written notice in 
the manner aforesaid:

If to Purchaser:                   VDI Media
                                   6920 Sunset Boulevard
                                   Los Angeles, California  90028
                                   Telecopy: (213) 957-2164    
                                   Attention: Donald R. Stine

With a concurrent copy to:         Kaye, Scholer, Fierman, Hays & Handler, LLP
                                   1999 Avenue of the Stars, Suite 1600
                                   Los Angeles, California  90067
                                   Telecopy: (310) 788-1200
                                   Attention: Barry L. Dastin, Esq.
                                              Brian Hoye, Esq.

If to Seller:                      All Post, Inc.

                                   c/o McDermott, Will & Emery
                                   1301 Dove Street, Suite 500
                                   Newport Beach, California 92660 
                                   Telecopy: (714) 851-9348
                                   Attention: All Post, Inc.

With a concurrent copy to:         McDermott, Will & Emery
                                   1301 Dove Street, Suite 500
                                   Newport Beach, California 92660 
                                   Telecopy: (714) 851-9348
                                   Attention: John B. Miles, Esq.

With a concurrent copy to:         Westar Capital
                                   949 South Coast Drive, Suite 650
                                   Costa Mesa, California 92626 
                                   Attention: Robert Polenz.

       SECTION 11.3  ASSIGNABILITY AND PARTIES IN INTEREST.  This Agreement
shall not be assignable by any of the parties.  This Agreement shall inure to
the benefit of and be binding upon the parties and their respective permitted
successors and assigns.

                                     46

<PAGE>

       SECTION 11.4  GOVERNING LAW.  This Agreement shall be governed by, and 
construed and enforced in accordance with, the laws of the State of 
California.

       SECTION 11.5  COUNTERPARTS.  This Agreement may be executed in several 
counterparts, each of which shall be deemed an original, but all of which 
shall constitute one and the same instrument.

       SECTION 11.6  COMPLETE AGREEMENT.  This Agreement, the Secured 
Indemnity Agreement, the Confidentiality Agreement, the exhibits and 
schedules hereto and the documents delivered or to be delivered pursuant to 
this Agreement contain or will contain the entire agreement among the parties 
with respect to the Transactions and shall supersede all previous oral and 
written and all contemporaneous oral negotiations, commitments and 
understandings.

       SECTION 11.7  MODIFICATIONS, AMENDMENTS AND WAIVERS.  This Agreement 
may be modified, amended or otherwise supplemented only by a writing signed 
by Purchaser and Seller.  No waiver of any right or power hereunder shall be 
deemed effective unless and until a writing waiving such right or power is 
executed by the party waiving such right or power.

       SECTION 11.8  EXPENSES.  Except as otherwise expressly provided 
elsewhere in this Agreement, each party shall pay all fees and expenses 
incurred by it in connection with the transactions contemplated by this 
Agreement.

       SECTION 11.9  INVALIDITY.  In the event that any one or more of the 
provisions contained in this Agreement or in any other instrument referred to 
herein, shall, for any reason, be held to be invalid, illegal or 
unenforceable in any respect, then to the maximum extent permitted by law, 
such invalidity, illegality or unenforceability shall not affect any other 
provision of this Agreement or any other such instrument.

       SECTION 11.10 PUBLICITY.  Neither Purchaser, on the one hand, nor 
Seller, including Representatives or Affiliates thereof, on the other hand, 
shall issue any press release or make any public statement regarding the 
transactions contemplated hereby, without the prior written approval of the 
other parties, except as may be required by law but only after prior written 
notice to the other party; provided that Purchaser shall be entitled to issue 
a press release regarding the Transactions upon execution of this Agreement. 

       SECTION 11.11 LIMIT ON INTEREST.  Notwithstanding anything in this 
Agreement to the contrary, no party shall be obligated to pay interest at a 
rate higher than the maximum rate permitted by applicable law.  In the event 
that at any time an interest rate provided in this Agreement exceeds the 
maximum rate permitted by applicable law, such interest rate shall be deemed 
to be reduced to such maximum permissible rate.

       SECTION 11.12 ATTORNEYS' FEES AND COSTS.  Each party shall bear its 
own expenses arising from the preparation, negotiation and delivery of this 
Agreement and any other document required to be delivered in connection 
herewith.

                                      47

<PAGE>

       SECTION 11.13  JURISDICTION; SERVICE OF PROCESS.  Any action or 
proceeding seeking to enforce any provision of, or based on any right arising 
out of, this Agreement may be brought against any of the parties in the 
courts of the State of California, County of Los Angeles, and the parties 
hereto irrevocably submit to the jurisdiction of such courts and waive any 
objection to venue laid therein.  Process in any action or proceeding 
referred to in the preceding sentence may be served on any party anywhere in 
the world.

       SECTION 11.14 CONTRACT INTERPRETATION; CONSTRUCTION OF AGREEMENT.

       (a     The headings contained in this Agreement are for reference 
purposes only and shall not affect in any way the meaning or interpretation 
of this Agreement.  Article, section, exhibit, schedule, preamble, recital 
and party references are to this Agreement unless otherwise stated.  The 
words "include", "includes" and "including" shall be deemed to be followed by 
the phrase "without limitation". 

       (b     No party, nor its respective counsel, shall be deemed the 
drafter of this Agreement for purposes of construing the provisions of this 
Agreement, and all language in all parts of this Agreement shall be construed 
in accordance with its fair meaning, and not strictly for or against any 
party.

       (c     Whenever the context may require, any pronoun shall include the 
corresponding masculine, feminine and neuter forms.


                                      48

<PAGE>

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

                                       ALL POST, INC., as Seller


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       VDI MEDIA, as Purchaser


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                      49

<PAGE>

                               AGREEMENT NOT TO COMPETE

       Reference is made to that certain Asset Purchase Agreement between VDI 
Media, a California corporation, and All Post, Inc., a California 
corporation, dated as of June __, 1998 (the "Agreement").  Capitalized terms 
used herein without definition shall have the respective meanings set forth 
therefor in the Agreement.  As additional consideration for the payments made 
or to be made by Purchaser under the Agreement, from the Closing Date to and 
including the second anniversary thereof Seller hereby agrees that it shall 
not, for any reason, directly or indirectly, engage or be interested in any 
business that Competes with Purchaser, and shall not, directly or indirectly, 
have any interest in, own, manage, operate, control, be connected with as a 
stockholder (other than as a stockholder of less than five percent (5%) of 
the issued and outstanding stock of a publicly-held corporation), joint 
venturer, officer, partner, employee or consultant, or otherwise engage or 
invest or participate in, any business that Competes with Purchaser.  As used 
herein, the term "Competes with Purchaser" shall mean competing with the 
Business conducted by Seller at any time during the three year period 
preceding the date hereof in any county or any other political subdivision of 
any state of the United States of America or any of its possessions or 
territories where Seller conducted such businesses at any time during the 
three year period preceding the Closing  Date.  All of the parties agree that 
the duration and area for which the covenant not to compete set forth in this 
Agreement Not To Compete is to be effective are reasonable.  In the event 
that any court determines that the time period or the geographical areas 
provided for herein, or both of them, are unreasonable and that such covenant 
is to that extent unenforceable, such covenant shall remain in full force and 
effect for the greatest time period and in the greatest geographical area 
that would not render it unenforceable.  The parties intend that this 
covenant shall be deemed to be a series of separate covenants, one for each 
and every county of each and every state of the United States of America and 
for any other territory or possession of the United States of America where 
this covenant is intended to be effective.

       Notwithstanding the foregoing, the Cinetech Business shall be deemed 
not to Compete with Purchaser for the purposes of this Agreement Not To 
Compete.

       The parties agree that damages would be an inadequate remedy for 
Purchaser in the event of a breach or threatened breach of this Agreement Not 
to Compete and thus, in any such event, Purchaser may, either with or without 
pursuing any potential damage remedies and in addition to such remedies, 
immediately obtain and enforce an injunction, and/or a temporary restraining 
order, prohibiting any party from violating this Agreement, without having to 
prove actual damages or post bond.

<PAGE>

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

                                       ALL POST, INC.


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       VDI MEDIA


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:


                                       By:
                                          --------------------------------
                                          Name:
                                          Title:

<PAGE>

                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                   PAGE
<S>                                                                                <C>
1.   PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2.   PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3.   TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
4.   POSSESSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
5.   BASE RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
6.   SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
7.   MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
8.   USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9.   COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10.  ALTERATIONS AND ADDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11.  SURRENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.  LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13.  ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14.  HOLD HARMLESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15.  SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
16.  LIABILITY INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.  UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
18.  PROPERTY TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
19.  RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
20.  HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
21.  ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
22.  RECONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
23.  DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
24.  REMEDIES FOR DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
25.  SUCCESSOR LANDLORD'S LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . 34
26.  EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
27.  HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
28.  OFFSET STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
29.  TRAFFIC AND ENERGY MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . 39
30.  [INTENTIONALLY DELETED.]. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
31.  [INTENTIONALLY DELETED.]. . . . . . . . . . . . . . . . . . . . . . . . . . . 39
32.  AUTHORITY OF PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
33.  GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
34.  BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

                                         -i-

<PAGE>

                                  TABLE OF CONTENTS
                                     (CONTINUED)

<CAPTION>
                                                                                   PAGE
<S>                                                                                <C>

35.  QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

</TABLE>

                                         -ii-

<PAGE>

                                    BUILDING LEASE


1.      PARTIES.   This Building Lease ("Lease"), dated for reference purposes
only, June 11, 1998, is made by and between ALL POST, INC., a California
corporation, herein called "Landlord" and VDI MEDIA, a California corporation,
herein called "Tenant."

2.      PREMISES.

        2.1     Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain real property (herein called "Premises") indicated on
EXHIBIT A attached hereto and reference thereto made a part hereof.  Said
Premises are commonly known as 1133 North Hollywood Way, Burbank, California
which has been improved with a building of approximately 32,000 square feet
("Building") and that certain real property commonly known as 1122 North
Hollywood Way, Burbank, California, which provides additional parking for the
Building.  The Premises are more particularly described in EXHIBIT A hereto.
Any statement of size set forth in this Lease or that may have been used in
calculating rental is an approximation which Tenant and Landlord agree is
reasonable.  Notwithstanding the foregoing, the Tenant or Landlord may elect, at
its sole cost, to cause the square footage of the Building to be measured by a
California licensed architect according to the following criteria:  (i) the
square footage of each above ground floor shall be based on measurements from
the exterior of all exterior walls; and (ii) the square footage of the basement
area shall be based on measurements from the interior of all basement exterior
walls.  When completed, Tenant or Landlord, as the case may be, may deliver its
measurements and calculations to the other and, if within ten (10) business days
of delivery, the other party does not object in writing to the calculated square
footage of the Building, such square footage shall be used to recalculate Base
Rent as provided at Paragraph 5 below.  If the other party disagrees in writing
with the calculated square footage within such ten (10) business-day period,
then it may conduct its own calculation thereof in accordance with this
paragraph which shall be completed as soon as reasonably possible.  If after the
time periods provided in this paragraph have elapsed and Landlord and

                                        Page 1
<PAGE>


Tenant are still in disagreement as to the appropriate square footage after the
second calculation, the matter shall be submitted to a California licensed
architect selected by the other two architects and such architect shall
determine which of the two previously made calculations of square footage shall
be used.  Such architect's determination shall be binding on Landlord and
Tenant.  Notwithstanding anything herein to the contrary, the recalculation of
the square footage of the Building must be commenced by the delivery no later
than August 15, 1998 of the initial recalculation by one party to the other.
Failure to do so shall be deemed both parties' agreement that the Building
contains 32,000 square feet for all purposes under this Lease.

        2.2     This Lease is subject to the terms, covenants and conditions
herein set forth and Tenant and Landlord covenant to the other as a material
part of the consideration for this Lease to keep and perform each and all of
said terms, covenants and conditions to be kept and performed by Tenant or
Landlord, as applicable, and that this Lease is made upon the condition of said
performance.

        2.3     Landlord shall deliver the Premises to Tenant broom clean and
free of debris and in good operating order, condition and state of repair on the
Commencement Date (as defined below) and, so long as the required service
contracts as described in subparagraph 7.2 below are obtained by Tenant within
thirty (30) days following the Commencement Date warrants that the existing
electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
condition systems ("HVAC"), loading doors, if any, and all other such elements
in the Premises, other than those constructed by Tenant shall be in good,
operating condition on the Commencement Date and that the structural elements of
the roof, bearing walls and foundation of the Building shall be free of material
defects.  If a noncompliance with this warranty exists as of the Commencement
Date, Landlord shall, except as otherwise provided in this Lease, promptly after
receipt of written notice from Tenant setting forth the specificity of the
nature and extent of such noncompliance, rectify the same at Landlord's expense.
If, within six (6) months of the Commencement Date, Tenant does not give
Landlord written notice of any noncompliance with this warranty, correction of
such non-compliance shall be the obligation of Tenant at Tenant's sole cost and
expense.

                                        Page 2
<PAGE>

        2.4     Landlord warrants that the improvements on the Premises
materially comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("Applicable Requirements") in effect
on the Commencement Date. This warranty does not apply to the use to which
Tenant will put the Premises or to any alterations or modifications made or to
be made to the Premises by Tenant.  If the Premises do not comply with this
warranty, Landlord shall, except as otherwise provided herein, promptly after
receipt of written notice from Tenant setting forth with specificity the nature
and extent of such noncompliance rectify the same at Landlord's expense if
mandated by the Applicable Requirements (in other words, Landlord shall not be
required to rectify such noncompliance if it is a legal pre-existing condition).
If the Applicable Requirements are hereafter changed (as opposed to being in
existence at the Commencement Date) so as to require during the term of this
Lease  construction of an addition to or an alteration of the Building or the
reinforcement or other physical modifications of the Building (each such event
is referred to herein as "Capital Expenditure"), Landlord and Tenant shall
allocate the cost of work as follows:

                (a)     If such Capital Expenditures are required as a result of
the specific and unique use of the Premises by Tenant as compared with the uses
by tenants in general, Tenant shall be fully responsible for the cost thereof.

                (b)     If such Capital Expenditure is not the result of the
specific and unique use of the Premises by Tenant (such as, governmentally
mandated seismic modifications) then Landlord shall complete the work and
Landlord and Tenant shall allocate the obligation to pay for such cost as
follows: the cost of the work/modification shall be prorated between Landlord
and Tenant and Tenant shall only be obligated to pay, each month during the
remainder of the Term, on the date Base Rent is due, an amount equal to the
product of multiplying the cost of such work/modification by a fraction, the
numerator of which is one, and the denominator of which is the number of months
of the useful life of such work/modification as such useful life is specified
pursuant to Federal income tax regulations or guidelines for depreciation
thereof (including interest on the unamortized balance as is then commercially
reasonable in the judgment of Landlord's accountants), with Tenant reserving the
right to prepay its obligation at any time.  Provided,

                                        Page 3
<PAGE>

however, (i) in no event shall Tenant be obligated to pay more than One Hundred
Thousand dollars ($100,000) on account of such Capital Expenditure; (ii) if the
total cost of such Capital Expenditure exceeds the then monthly Base Rent
multiplied by twelve (12), Landlord shall have the option to terminate this
Lease upon one hundred eighty (180) days prior written notice to Tenant; and
(iii) if such Capital Expenditure is required during the last two years of this
Lease, Landlord shall have the option to terminate this Lease upon one hundred
eighty (180) days' prior written notice to Tenant.  Notwithstanding the
foregoing, in the event Landlord elects to terminate pursuant to
subparagraph 2.4(b)(ii) or (iii), Tenant may notify Landlord, in writing, within
ten (10) days after receipt of Landlord's termination notice that Tenant shall
pay for such Capital Expenditure and in such event this Lease shall not
terminate and Tenant shall pay the entire amount of such Capital Expenditure.

                The provisions concerning Capital Expenditures are intended only
to apply to non-voluntary new Applicable Requirements.  If the Capital
Expenditures are instead triggered as a result of a Tenant's modification of the
Premises, then, and in that event, Tenant shall be fully responsible for the
cost thereof; provided, however, Tenant may elect not to effect such
modification.

3.      TERM.

        3.1     The term of this Lease shall be for one hundred twenty (120)
months (the "Term"), commencing on the 11th day of June, 1998 ("Commencement
Date") and ending on the 10th day of June, 2008, subject to extension or
earlier termination as provided herein.

        3.2     Landlord hereby grants to Tenant the option to extend the Term
(the "Option") for one 60-month period ("Option Term") commencing when the prior
term expires upon each and all of the following terms and conditions:

                (a)     In order to exercise the Option, Tenant must give
written notice of such election to Landlord and Landlord must receive the same
at least nine (9) but not more than fifteen (15) months prior to the date that
the option period would commence, time being of the essence.  If proper
notification of the exercise of the Option is not given and/or received, the
Option shall automatically expire.

                                        Page 4
<PAGE>

                (b)     Tenant shall have no right to exercise the Option,
notwithstanding any provision in the grant of Option to the contrary, (i) during
the period commencing with the giving of any notice of default under Paragraph
23 and continuing until the noticed default is cured; or (ii) during the period
of time any monetary obligation due Landlord from Tenant is unpaid (provided
written notice thereof is given Tenant in accordance with the provisions of this
Lease); or (iii) during the time Tenant is in breach of this Lease.  The period
of time within which the Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise the Option because of the
provisions of subparagraph 3.2(a).  All rights of Tenant under the provisions of
the Option shall terminate and be of no further force or effect, notwithstanding
Tenant's due and timely exercise of the Option, (i) if after such exercise and
prior to commencement of the Option Term, Tenant fails to pay to Landlord a
monetary obligation of Tenant for a period of thirty (30) days after such
obligation becomes due (provided written notice thereof to Tenant in accordance
with the provisions of this Lease); or (ii) if Tenant is in breach of this Lease
on the date the Option Term would otherwise commence.

                (c)     Except for the provisions of this Lease granting the
Option, all of the terms and conditions of this Lease except where specifically
modified by the Option shall apply.

                (d)     The Option granted to Tenant in this Lease is personal
to the original Tenant named in Paragraph 1 hereof, and cannot be voluntarily or
involuntarily assigned or exercised by any person or entity other than said
original Tenant while the original Tenant is in full and actual possession of
the Premises and without the intention of thereafter assigning or subletting.
The Option, herein granted to Tenant is not assignable, either as a part of an
assignment of this Lease or separately or apart therefrom, and the Option may
not be separated from this Lease in any manner, by reservation or otherwise.

                (e)     The Base Rent for each month of the Option Term shall be
calculated as follows, using the method(s) indicated below:

                        (i)     On commencement of the Option Term ("Market
Rental Value Adjustment Date"), the Base Rent shall be adjusted to the Market
Rental Value ("MRV") of the Premises as follows:

                                        Page 5
<PAGE>

                                (1)     Four (4) months prior to the Market
Rental Value Adjustment Date, the parties shall attempt to agree upon what the
new MRV will be on the Market Rental Value Adjustment Date.  If agreement cannot
be reached, within thirty days, then:

                                        a.      Landlord and Tenant shall
immediately appoint a mutually acceptable appraiser or broker to establish the
new MRV within the next thirty days.  Any associated costs will be split equally
between the parties, or

                                        b.      Both Landlord and Tenant shall
each immediately make a reasonable determination of the MRV and submit such
determination, in writing, to arbitration in accordance with the following
provisions:

                                                i.      Within fifteen (15) days
thereafter, Landlord and Tenant shall each select an appraiser of their choice
to act as an arbitrator.  The two arbitrators so appointed shall immediately
select a third mutually acceptable consultant to act as a third arbitrator.

                                                ii.     The three (3)
arbitrators shall within thirty (30) days of the appointment of the third
arbitrator reach a decision as to what the actual MRV for the Premises is, and
whether Landlord's or Tenant's submitted MRV is the closest thereto.  The
decision of a majority of the arbitrators shall be binding on the parties.  The
submitted MRV which is determined to be the closest to the actual MRV shall
thereafter be used by the parties.

                                                iii.    If either of the parties
fails to appoint an arbitrator within the specified fifteen (15) days, the
arbitrator timely appointed by one of them shall reach a decision on his or her
own, and said decision shall be binding on the parties.

                                                iv.     The entire cost of such
arbitration shall be paid by the party whose submitted MRV is not selected,
i.e., the one that is NOT the closest to the actual MRV.

                                        c.      In no event shall any person or
entity, or any affiliate of such person or entity, who or which is entitled to
any commission or fee arising from this Lease or any person or entity who is an
affiliate of either of the parties hereto, or who has provided services to
either party hereto, act as an arbitrator for purposes of establishing MRV.

                                        Page 6
<PAGE>

                                (2)     Notwithstanding the foregoing, the MRV
shall not be less than the Base Rent payable for the month immediately preceding
the Market Rental Value Adjustment Date multiplied by 1.03.

                        (ii)    Upon the commencement of the Option Term, the
MRV will become the new "Base Rent" for the purpose of calculating any further
adjustments to Base Rent pursuant to Section 5.2.

                (f)     The new Base Rent (i.e., MRV) in effect on the
commencement of the Option Term is subject to adjustment as provided at
Section 5 and Tenant continues to be responsible for other rental as provided
herein.

4.      POSSESSION.  Landlord shall deliver possession of the Premises to Tenant
on the Commencement Date.

5.      BASE RENT.

        5.1     Tenant  agrees to pay to Landlord as Base Rent, without prior
notice, offset, deduction or demand, for the Premises the sum of Thirty-two
Thousand Dollars ($32,000) (which equates to One Dollar ($1.00) per square foot
of the Building and which is subject to adjustment as provided at Subparagraph
2. above), in advance, on or before the first day of the first full calendar
month of the term hereof and a like sum on or before the first day of each and
every successive calendar month thereafter during the term hereof, except that
the first month's rent shall be paid upon execution hereof.  Base Rent for any
period during the term hereof which is for less than one (1) month shall be a
prorated portion of the monthly installment herein, based upon a thirty (30) day
month.  Said rental shall be paid to Landlord in lawful money of the United
States of America, which shall be legal tender at the time of payment, at such
place as Landlord may from time to time designate in writing.

        5.2     Notwithstanding anything to the contrary contained in Paragraph
5.1 of this Lease, the Base Rent shall increase annually on the first
anniversary of the first day of the first calendar month

                                        Page 7
<PAGE>

immediately following the Commencement Date and on the anniversary of such date
thereafter in accordance with Schedule 1 hereto.

6.      SECURITY DEPOSIT.  Tenant has paid or will pay to Landlord concurrently
with the execution and delivery hereof by Tenant the sum of Thirty-two Thousand
Dollars ($32,000) representing the first full month's Base Rent during the term
of this Lease as security for the full and faithful performance of the terms
hereof by Tenant.  Within forty-five (45) days of Landlord's receipt of the
security deposit, Landlord shall place such deposit in an interest-bearing
account mutually acceptable to Landlord and Tenant.  The account shall be in
Landlord's name, but Tenant shall be entitled to interest thereon.  If Tenant
defaults with respect to any provision of this Lease, including, but not limited
to, the provisions relating to the payment of rent, Landlord may, but shall not
be required to, use, apply or retain all or any part of this security deposit
for the payment of any rent or any other sum in default, or for the payment of
any other amount which Landlord may spend or become obligated to spend by reason
of Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default, including without limitation,
reasonable costs and attorneys' fees incurred by Landlord to recover possession
of the Premises upon a default by Tenant hereunder.  If any portion of said
deposit is so used or applied, Tenant shall, within five (5) days after receipt
of written demand therefor, deposit cash with Landlord in an amount sufficient
to restore the security deposit to its original amount and Tenant's failure to
do so shall constitute a default hereunder by Tenant.  If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
security deposit may be applied against any amounts owed by Tenant to Landlord
at the expiration or termination of this Lease and any balance thereof shall be
returned to Tenant (or, at Landlord's option, upon written notice to Tenant, to
the last assignee of Tenant's interest hereunder) within the time specified in
California Civil Code Section 1950.7.  As and when Base Rent increases pursuant
to the provisions of subparagraphs 3.2 or 5.2 above, Tenant shall deposit with
Landlord such additional funds as may be necessary to cause the Security Deposit
then held by Landlord to equal the amount of Base Rent then payable under this
Lease.

                                        Page 8
<PAGE>

7.      MAINTENANCE AND REPAIRS.

        7.1     Subject to Paragraphs 2 and 22 and the provisions of this
subparagraph 7.1, Tenant shall, at Tenant's sole expense, keep the Premises in
good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Tenant, and whether or not the need for such repairs occurs as a
result of Tenant's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, heating, ventilating, air-conditioning, electrical, lighting
facilities, boilers, pressure vessels, fire protection system, fixtures, walls
(interior and exterior), ceilings, roofs, floors, windows, doors, plate glass,
skylights, landscaping, driveways, parking lots, fences, retaining walls, signs,
sidewalks and parkways located in, on, or adjacent to the Premises.  Tenant, in
keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices, specifically including the procurement and
maintenance of the service contracts required by subparagraph 7.2 below.
Tenant's obligations shall include restorations, replacements or renewals when
necessary to keep the following components of the Premises in good order,
condition and state of repair:  HVAC, flooring, interior walls, electrical,
plumbing fixtures, signs, landscaping and parking lot surface (including parking
lot ingress and egress and restriping).  Tenant shall, during the term of this
Lease, keep the exterior appearance of the Building in a first-class condition
consistent with the exterior appearance of other similar facilities of
comparable age and size in the vicinity, including, when necessary, the exterior
repainting of the Building.  Notwithstanding the foregoing, Landlord shall be
responsible for all repair and maintenance, to the extent needed, of the
structural elements of the Building limited to the foundation, the structural
elements of the roof and all load bearing walls.  However, Tenant shall be
responsible for any and all regular maintenance of the roof.

        7.2     Tenant shall, at Tenant's sole expense, procure and maintain
contracts, with copies to Landlord, in customary form and substance for, and
with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if and when installed on the Premises:
(i) HVAC equipment, (ii) boiler and pressure vessels, (iii) fire extinguishing
systems, including fire alarm

                                        Page 9
<PAGE>

and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof
covering and drains, (vi) driveways and parking lots, and (vii) elevators.

        7.3     Subject to the provisions of subparagraph 7.1 and Paragraphs 2
and 22, it is intended by the parties hereto that Landlord have no obligation,
in any manner whatsoever, to repair and maintain the Premises, or the equipment
therein, all of which obligations are intended to be that of Tenant.  It is the
intention of the Landlord and Tenant that the terms of this Lease govern the
respective obligations of the parties as to maintenance and repair of the
Premises, and they expressly waive the benefit of any statute now or hereafter
in effect to the extent it is inconsistent with the terms of this Lease.

        7.4     Except as provided in Paragraph 22 hereof, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein.  As a material
inducement to Landlord's entering into this Lease, Tenant expressly waives any
right to make repairs at Landlord's expense whether granted by law, statute,
ordinance or otherwise now or hereafter in effect, including but not limited to
California Civil Code Sections 1941, 1941.1 and 1942.

8.      USE.  Tenant shall use the Premises for video duplication and audio
production services, vault storage of videos, and any ancillary general office
use and shall not use or permit the Premises to be used for any other purpose
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld.  Tenant shall not do or permit anything to be done in or
about the Premises, nor bring or keep anything therein, which will in any way
increase the existing rate of, or adversely affect, any fire insurance upon the
Building or any of its contents, or cause cancellation of any insurance policy
covering the Building or any part thereof or any of its contents.  Tenant shall
not allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises.  Tenant, its employees, agents and contractors
shall not commit or suffer to be committed any waste in or upon the Premises.
Without limiting the generality of the foregoing, Tenant shall not (i) place a
load upon any floor of the Premises which exceeds the floor

                                       Page 10
<PAGE>

load per square foot which such floor was designed to carry or (ii) permit any
objectionable sounds or odors to carry outside the Premises.

9.      COMPLIANCE WITH LAW.  Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated.  Tenant shall, at its sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to,
or affecting the condition use or occupancy of the Premises, excluding
structural changes not related to or affected by Tenant's improvement or acts.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of the fact as between the Landlord and
Tenant.

10.     ALTERATIONS AND ADDITIONS.

        10.1    Only if required by law or government regulations and upon
giving Tenant as much advance notice thereof as is reasonably practical,
Landlord may change the name, number or designation by which the Building is
commonly known.  Subject to Landlord's approval, Tenant may, at its own cost and
expense, remove the signage presently on the Building and replace same with its
own signage provided that any and all signage shall be in conformance with
applicable laws.  Within five (5) days of expiration of the Term, or sooner as
reasonably requested by the Landlord, Tenant shall remove any and all signage
from the Building at its sole cost and expense.

        10.2    Tenant shall not make any alterations, additions or improvements
without the prior written consent of Landlord which shall not be unreasonably
withheld.  All such alterations, additions and improvements shall be made in
conformity with plans therefor reasonably approved by Landlord in writing prior
to the commencement of such work and shall be performed by a tenant improvements
contractor

                                       Page 11
<PAGE>

reasonably approved by Landlord.  All such alterations, additions and
improvements (except movable furniture, equipment, furnishings and trade
fixtures) shall become the property of Landlord and shall be surrendered with
the Premises, as a part thereof, at the expiration or earlier termination of the
term hereof.  All such alterations, additions or improvements shall, however, be
made by Tenant at Tenant's sole expense.  Upon termination of the Lease, Tenant
shall, upon demand by Landlord, at Tenant's sole cost and expense, forthwith
remove any alterations, additions or improvements made by Tenant and designated
by Landlord at the time of Landlord's initial approval to be removed, and repair
and restore the Premises to their original condition, reasonable wear and tear
excepted.  Any personal property left on or in the Premises at the expiration or
earlier termination of this Lease may, at the option of Landlord, after fifteen
(15) days' written notice to Tenant, either be deemed abandoned and retained by
Landlord, or be placed in storage at a public warehouse in the name of, for the
account of and at the expense and risk of Tenant or otherwise disposed of by
Landlord in the manner provided by law.  Tenant releases Landlord of and from
any and all claims and liability for damage to or destruction or loss of
property left by Tenant upon the Premises at the expiration or other termination
of this Lease.  Tenant further waives all claims to all property (and the
proceeds thereof) abandoned by Tenant and retained or disposed of by Landlord.

        All alterations, additions and improvements to the Premises made by
Tenant shall comply with the plans therefor approved in advance by Landlord.
Such plans and any specifications associated therewith shall be prepared by an
architect or interior designer reasonably approved in advance by Landlord.  All
such work by Tenant shall comply with all applicable requirements of all
governmental authorities having jurisdiction of the Premises and shall comply
with all reasonable rules and regulations established by Landlord to ensure the
safety, cleanliness and good order of the Building, including but not limited to
those relating to establishment of off-Premises staging areas, disposal of
refuse and the hours of performing operations which result in the creation of
noise, dust and odors.  No such alterations, additions or improvements by Tenant
shall incorporate therein any hazardous materials, as defined in Paragraph 27.

                                       Page 12
<PAGE>

        10.3    No antenna, satellite dish, microwave receiver or other
receiving or transmission equipment shall be installed by Tenant in or on the
roof of the Building or elsewhere at the Premises except with the prior written
consent of Landlord which shall not be unreasonably withheld.  Landlord's
consent shall not be withheld unless such installation would materially injure
the Premises.  Any such installation by Tenant shall be only the particular
equipment specifically approved by Landlord, shall be limited to the manner and
location approved by Landlord and shall be subject to such terms and conditions
as are provided by Landlord to Tenant at the time Landlord approves such
installation.

11.     SURRENDER.  Tenant shall surrender the Premises by the end of the Term
or any earlier termination date with all the improvements, parts and services
thereof, broom clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear accepted.  "Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice.  Tenant shall repair any damage occasioned by the
installation, maintenance  or removal of its trade fixtures, furnishings and
personal property.

12.     LIENS.  Tenant shall keep the Premises free from any liens arising out
of any work performed, materials furnished or obligations incurred by or for
Tenant.  In the event that Tenant shall not, within ten (10) business days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper lien release bond, Landlord shall have,
in addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall deem
reasonably proper, including payment of or defense against the claim giving rise
to such lien.  All sums paid by Landlord and all reasonable expenses incurred by
it in connection therewith shall automatically create an obligation of Tenant to
pay an equivalent amount as additional rent, which additional rent shall be
payable by Tenant within five (5) days after Tenant's receipt of Landlord's
demand therefor with interest at the rate of ten percent (10%) per annum
permitted by law to be charged from date of payment by Landlord until paid by
Tenant.  Nothing herein shall imply any consent by Landlord to subject
Landlord's estate to liability under any mechanics' or other lien law.  Tenant
shall give Landlord

                                       Page 13
<PAGE>

adequate opportunity and Landlord shall have the right to post in or on the
Premises such notices of nonresponsibility as are provided for in the mechanics
lien laws of the state of California.

13.     ASSIGNMENT AND SUBLETTING.

        13.1    Tenant shall not, either voluntarily or involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Lease or in the Premises or permit the Premises
to be occupied by anyone other than Tenant or Tenant's employees without
obtaining the prior written consent of Landlord, which consent shall be subject
to the provisions of subsections 13.2 through 13.8 below.  Any such attempted
assignment, subletting, mortgage or other encumbrance without such consent shall
be null and void and of no effect.

        13.2    No assignment, subletting, mortgage or other encumbrance of
Tenant's interest in this Lease shall relieve Tenant of its obligation to pay
the rent and to perform all of the other obligations to be performed by Tenant
hereunder.  The acceptance of rent by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to any subletting, assignment, mortgage or other encumbrance.  Consent
to one sublease, assignment, mortgage or other encumbrance shall not be deemed
to constitute consent to any subsequent attempted subletting, assignment,
mortgage or other encumbrance.

        13.3    If Tenant desires at any time to assign this Lease or to sublet
the Premises or any portion thereof, it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord:  (i) the name of the
proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or
assignee's business to be carried on in the Premises; (iii) the terms and
provisions of the proposed sublease or assignment and the proposed effective
date thereof; (iv) such financial information as Landlord may reasonably request
concerning the proposed subtenant or assignee; and (v) the minimum payment of at
least $500.00, required pursuant to subparagraph 13.8 below.  The submission
pursuant to clause (iii) shall include a copy of any agreement, escrow
instructions or other document which contains or memorializes the terms and
provisions of the transaction for which Landlord's consent is required.

                                       Page 14
<PAGE>

Similarly, if Tenant desires to mortgage or encumber its interest in this Lease,
Tenant shall first supply to Landlord in writing such information as to such
transaction as may be reasonably requested by Landlord.

        13.4    [INTENTIONALLY DELETED.]

        13.5    At any time within thirty (30) days after Landlord's receipt of
the last of the information specified in subparagraph 13.3 above, Landlord may,
by written notice to Tenant, (i) approve the proposed assignment or sublease; or
(ii) subject to the provisions of subparagraph 13.6 below, reasonably disapprove
the proposed assignment or sublease.  If Landlord does not disapprove the
proposed subletting or assignment in writing within said thirty (30) day period,
Tenant may thereafter within ninety (90) days after the expiration of said
thirty (30) day period enter into a valid assignment or sublease of the Premises
or portion thereof, upon the terms and conditions set forth in the information
furnished by Tenant to Landlord pursuant to subparagraph 13.3 above.  Provided,
however, that any material change in such terms shall be subject to Landlord's
consent as provided in this Paragraph and, provided further, that any amount to
be paid by Tenant in connection with such subletting or assignment pursuant to
subparagraph 13.3 above shall be paid to Landlord upon and as a condition to
consummation of such transaction.

        13.6    Landlord shall have the right to reasonably approve or
disapprove any proposed assignee or sublessee.  In exercising such right of
reasonable approval or disapproval, Landlord shall be entitled to take into
account any fact or factor which Landlord reasonably deems relevant to such
decision, including, but not necessarily limited to, the following, all of which
are agreed to be reasonable factors for Landlord's consideration:

                (a)     The financial strength of the proposed assignee or
subtenant.

                (b)     The proposed use of the Premises by such proposed
assignee or subtenant and the compatibility of such proposed use with the
Building.

                (c)     Any materially adverse impact of the proposed use of the
Premises by such proposed assignee or subtenant.

                                       Page 15
<PAGE>

                (d)     Whether there then exists any uncured default by Tenant
pursuant to this Lease or any non-payment or non-performance by Tenant under
this Lease which, with the passage of time and/or the giving of notice, would
constitute a default under this Lease.

                (e)     Whether the proposed transferee is a public or
governmental agency.

Moreover, Landlord shall be entitled to be reasonably satisfied that each and
every covenant, condition or obligation imposed upon Tenant by this Lease and
each and every right, remedy or benefit afforded Landlord by this Lease is not
impaired or diminished by such assignment or subletting.  Landlord and Tenant
acknowledge that the express standards and provisions set forth in this Lease
dealing with assignment and subletting, including those set forth in this
subparagraph 13.6, have been freely negotiated and are reasonable at the date
hereof taking into account Tenant's proposed use of the Premises and the nature
and quality of the Building and the Project.  No withholding of consent by
Landlord shall give rise to any claim by Tenant or any proposed assignee or
subtenant or entitle Tenant to terminate this Lease or to any abatement of rent.
Approval of any assignment of Tenant's interest shall, whether or not expressly
so stated, be conditioned upon such assignee assuming in writing all obligations
of Tenant hereunder.  In the event Landlord withholds its consent to an
assignment or subletting proposed by Tenant and Tenant believes such withholding
is unreasonable, Tenant may submit such matter to binding arbitration in
accordance with subparagraph 13.10 below.

        13.7    All options to extend the Term contained in this Lease are
personal to Tenant.  Consent by Landlord to any assignment or subletting shall
not include consent to the assignment or transfer of any such options with
respect to the Premises granted to Tenant by this Lease, any addendum or
amendment hereto or any letter agreement.  All such options shall terminate upon
such subletting or assignment unless Landlord specifically grants the same in
writing to such assignee or subtenant.

        13.8    The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation hereof shall not work a merger, and shall at the option of
Landlord, terminate all or any existing subleases or subtenancies or shall
operate as an assignment to Landlord of such subleases or subtenancies.  If
Tenant is a corporation which is not required under the Securities Exchange Act
of 1934 to file periodic

                                       Page 16
<PAGE>

informational reports with the Securities and Exchange Commission, or is an
unincorporated association or partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate in excess of twenty-five percent (25%) shall be
deemed an assignment within the meaning and provisions of this Paragraph 13.
Tenant agrees to reimburse Landlord, in no event less than $500.00 for each
proposed transfer, for Landlord's administrative time and reasonable costs and
attorneys' fees incurred in connection with the processing and documentation of
any such requested assignment, subletting, transfer, change of ownership or
hypothecation of this Lease or Tenant's interest in and to the Premises.

        13.9    For purposes of this Lease, an assignment or sublease shall
include the merger or consolidation of Tenant.  Landlord's consent to such,
merger or consolidation shall not be required where (i) the
transferee/successor-in-interest to Tenant's rights under this Lease has assumed
Tenant's obligations hereunder in writing, (ii) the
transferee/successor-in-interest has provided written notice to Landlord of such
merger or consolidation, and (iii) the shareholders' equity of such
transferee/successor-in-interest immediately after such merger or consolidation
is equal to or greater than the lesser of (y) Tenant's shareholders' equity as
of March 31, 1998 or (z) Tenant's shareholders' equity on the day immediately
preceding such merger or consolidation.

        13.10   In the event Tenant believes that Landlord's refusal to consent
to an assignment or subletting is unreasonable, Tenant may submit the matter to
binding arbitration before a single arbitrator appointed by Judicial Arbitration
and Mediation Services (J.A.M.S.).  The request for arbitration shall be
submitted by Tenant in writing to J.A.M.S. no later than ten (10) business days
after delivery of Landlord's written notice to Tenant of its refusal to consent.
Tenant's notice to J.A.M.S. shall be sent concurrently to Landlord.  Landlord
and Tenant may each supply written briefs to the arbitrator and the other party
within ten (10) days after receipt of written notice of the appointment of the
arbitrator by J.A.M.S.  Landlord and Tenant may also deliver written reply
briefs to the arbitrator and the other party within five (5) days after receipt
of the other party's brief.  The arbitrator shall render his/her decision, in
writing, as soon as

                                       Page 17
<PAGE>

reasonably possible after the last day on which the parties can submit reply
briefs.  The cost of the arbitrator shall be shared equally by Landlord and
Tenant.

14.     HOLD HARMLESS.

        14.1    Except for Landlord's gross negligence or willful misconduct,
Tenant shall indemnify, protect, defend and hold harmless the Premises, Landlord
and its employees and agents from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultant's fees,
expenses and/or liabilities arising out of, involving or in connection with, the
use and/or occupancy of the Premises by Tenant and/or Tenant's breach of the
terms of the Lease.  If any action or proceeding is brought against Landlord by
reason of any of the foregoing matters, Tenant shall, upon notice, defend the
same at Tenant's expense by counsel reasonably satisfactory to Landlord and
Landlord shall cooperate with Tenant in such defense.  Landlord need not have
first paid any such claim in order to be defended or indemnified.

        14.2    Landlord shall not be liable for any damage to property  of
Tenant entrusted to employees or agents of Landlord, nor for loss or damage to
any property by theft or otherwise, nor for any injury to or damage to persons
or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Building, or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place resulting from dampness or any other cause
whatsoever, unless caused by or due to the gross negligence or willful
misconduct of Landlord, its agents, servants or employees.  Landlord or its
agents shall not be liable to Tenant for interference with the light or other
incorporeal hereditaments nor loss of business by Tenant.  Landlord or its
agents shall not be liable to Tenant for any damages caused by the act or
neglect of any third party at the Premises.  Tenant shall give prompt notice to
Landlord in case of fire or accidents in the Premises or in the Building or of
defects therein or in the fixtures or equipment.

        14.3    Except for Tenant's gross negligence or willful misconduct,
Landlord shall indemnify, protect, defend and hold harmless Tenant and its
agents and employees from and against any and all claims, damages, liens,
judgments, penalties, attorneys' and consultant's fees, expenses and/or
liabilities

                                       Page 18
<PAGE>

arising out of, involving or in connection with the gross negligence or willful
misconduct of Landlord, its employees and agents in, on or about the Premises
and/or Landlord's breach of the terms of this Lease.

15.     SUBROGATION.  Landlord and Tenant each hereby waive any and all rights
of recovery against the other, for loss of or damage to such waiving party or
its property or the property of others under its control, arising from any cause
insured against under any policy of property insurance required to be carried by
such waiving party pursuant to the provisions of this Lease (or any other policy
of insurance carried by such waiving party in lieu thereof) at the time of such
loss or damage.  Landlord and Tenant shall, upon obtaining the policies of
insurance which they are required to maintain under this Lease, give notice to
their respective insurance carrier(s) that the foregoing mutual waiver of
subrogation is contained in this Lease.

16.     LIABILITY INSURANCE.

        16.1    At all times during the Term, Tenant shall maintain in effect
policies of fire insurance covering:  (i) all leasehold improvements (including
any alterations, additions or improvements as may be made by Tenant pursuant to
provisions of Article 10 hereof) in which Tenant may have an insurable interest;
and (ii) trade fixtures, merchandise and other personal property from time to
time in, on or upon the Premises, in an amount not less than one hundred percent
(100%) of their actual replacement cost from time to time during the term of
this Lease, providing protection against any peril included within the
classification "All-Risk."  The proceeds of such insurance shall be used for the
repair or replacement of the property so insured.  Upon termination of this
Lease following a casualty as set forth herein, the proceeds under subpart (i)
above shall be paid to Landlord, and the proceeds under subpart (ii) above shall
be paid to Tenant.

        16.2    Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force comprehensive general liability
insurance for bodily injury and property damage, adequate to protect Landlord
against liability for injury to or death of any person, arising in connection
with the use, operation or condition of the premises or construction of
improvements therein.  Such insurance

                                       Page 19
<PAGE>

at all times shall be in an amount of not less than a combined single limit of
Two Million Dollars ($2,000,000.00), insuring against any and all liability of
the insured with respect to the Premises or arising out of the use or occupancy
thereof.

        16.3    Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force worker's compensation coverage as
required by law together with employee's liability coverage.

        16.4    If required by Landlord, Tenant shall, at all times during the
term hereof and at its own cost and expense, procure and continue in force
business interruption and/or loss of income insurance in amounts reasonably
satisfactory to Landlord.

        16.5    In no event shall the then limits of any policy be considered as
limiting the liability of Tenant under this Lease.

        16.6    All insurance required to be carried by Tenant hereunder shall
be issued by responsible insurance companies, qualified to do business in the
State of California, rated A + XII or better in the current Bests' Insurance
Guide.  Each insurance policy required to be maintained by Tenant hereunder
pursuant to subparagraphs 16.1 and 16.2 shall name Landlord, its officers,
agents, and employees, and at Landlord's request any mortgagee of Landlord, as
additional insureds, as their respective interests may appear, and copies of all
policies or certificates evidencing the existence and amounts of such insurance
shall be delivered to Landlord by Tenant prior to Tenant's occupancy of the
Premises.  No such policy shall be cancelable or materially reduced except after
thirty (30) days prior written notice to Landlord.  Tenant shall furnish
Landlord with renewals or "binders" of any such policy at least thirty (30) days
prior to the expiration thereof.  Tenant agrees that if Tenant does not take out
and maintain such insurance, Landlord may (but shall not be required to), after
fifteen (15) days notice to Tenant, procure said insurance on Tenant's behalf
and charge the Tenant the premium, payable upon demand.  Tenant shall have the
right to provide such insurance coverage pursuant to blanket policies obtained
by the tenant provided such blanket policies expressly afford coverage to the
Premises and to Tenant as required by this Lease.

                                   Page 20
<PAGE>

        16.7    All insurance required to be carried by Tenant hereunder shall
also contain an inflation guard protection causing an increase in the annual
property insurance coverage amount and liability insurance coverage amount by a
factor not less than the adjusted U.S. Department of Labor Consumer Price Index
for All Urban Consumers for the Los Angeles-Anaheim-Riverside Statistical Area.

        16.8    At all times during the Term, Landlord shall maintain in effect
a policy or policies of property insurance covering the Building in an amount
not less than the replacement cost thereof, providing protection against any
peril included within the classification "All Risk," excluding coverage for
flood or earthquake (unless Landlord in its sole discretion elects to obtain
endorsements for flood or earthquake).

        16.9    [INTENTIONALLY DELETED.]

        16.10   Tenant shall pay for all insurance required under this Paragraph
16.  To the extent insurance is maintained by Landlord pursuant to this
Paragraph 16, Tenant shall pay the cost thereof to Landlord within ten (10) days
following receipt of an invoice therefor with any premiums for policy periods
commencing prior to or extending beyond the Term prorated to correspond with the
Term.

17.     UTILITIES.  Tenant shall pay for all water, gas, heat, light power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon.  If such services are not separately
metered to Tenant, Tenant shall pay a reasonable proportion, to be determined by
Landlord, of all charges jointly metered.

18.     PROPERTY TAXES.

        18.1    Tenant shall be liable for and shall pay thirty (30) days before
delinquency all taxes, levies and assessments levied against any personal
property or trade fixtures placed by Tenant in or about the Premises, and, when
possible, Tenant shall cause such personal property and trade fixtures to be
assessed and billed separately from the Building and the Premises.  If any such
taxes, levies and assessments on Tenant's personal property or trade fixtures
are levied against Landlord or Landlord's property, or if the assessed value of
the Building or the Project is increased by the inclusion therein of a

                                   Page 21
<PAGE>

value placed upon such personal property or trade fixtures of Tenant, and if
Landlord pays the taxes, levies and assessments based upon such increased
assessment, which Landlord shall have the right to do regardless of the validity
thereof, but only under proper protest if requested by Tenant, Tenant shall
repay to Landlord upon demand, as additional rent, the taxes, levies and
assessments so levied against Landlord, or the proportion of such taxes, levies
and assessments resulting from such increase in the assessment, together with
interest thereon from the date of payment by Landlord to the date of
reimbursement by Tenant at the rate of ten percent (10%) per year.  Provided,
however, that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation but without any cost to Landlord,
to bring suit in any court of competent jurisdiction to recover the amount of
any such taxes, levies and assessments so paid under protest, any amount so
recovered to belong to Tenant.

        18.2    If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant, and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's "building standard" for the Building are assessed, then
the Real Property Taxes levied against Landlord or the Premises by reason of
such excess assessed valuation shall be deemed to be taxes levied against
personal property of Tenant and shall be governed by the provisions of
subparagraph 18.1 above.  If the records of the County Assessor are available
and sufficiently detailed to serve as a basis for determining whether said
tenant improvements are assessed at a higher valuation than Landlord's "building
standard," such records shall be binding on both Landlord and Tenant; otherwise
the actual cost of construction shall be the basis for such determination.

        18.3    As used herein, the term "Real Property Taxes" shall include any
form of assessment; real estate, general, special, ordinary or extraordinary, or
rental levy or tax (other than inheritance, personal income or estate taxes);
improvement bond; and/or license fee imposed upon or levied against any legal or
equitable interest of Landlord in the Premises, Landlord's right to other income
therefrom, and/or Landlord's business of leasing, by any authority having the
direct or indirect power to tax and where the funds are generated with reference
to the Building address and where the proceeds so

                                    Page 22
<PAGE>

generated are to be applied by the city, county or other local taxing authority
of a jurisdiction within which the Premises are located.  The term "Real
Property Taxes" shall also include any tax, fee, levy, assessment or charge, or
any increase therein, imposed by reason of events occurring during the term of
this Lease, including but not limited to, a change of ownership of the Premises
pursuant to California Revenue and Taxation Code Section 61 ET SEQ. or
otherwise.

        18.4    Tenant shall pay the Real Property taxes applicable to the
Premises during the term of this Lease.  Subject to the subparagraph 18.5, all
such payments shall be made at least ten (10) days prior to any delinquency
date.  Tenant shall promptly furnish Landlord with satisfactory evidence that
such taxes have been paid upon request by Landlord.  If any such taxes shall
cover any period of time prior to or after the expiration or termination of this
Lease, Tenant's share of such taxes shall be prorated to cover only that portion
of the tax bill applicable to the period that this Lease is in effect, and
Landlord shall reimburse Tenant for any overpayment.  If Tenant shall fail to
pay any required Real Property Taxes, Landlord shall have the right to pay the
same, and Tenant shall reimburse Landlord therefor upon demand.

        18.5    In the event Tenant incurs a late charge on any rent payment,
Landlord may, at Landlord's option, estimate the current Real Property Taxes and
premiums for insurance to be carried by Landlord pursuant to Paragraph 16 above,
and require that such taxes and premiums be paid in advance to Landlord by
Tenant, either (i) in a lump sum amount equal to the installment due, at least
twenty (20) days prior to the applicable delinquency date, or (ii) monthly in
advance with the payment of the Base Rent.  If Landlord elects to require
payment monthly in advance, the monthly payment shall be an amount equal to the
amount of the estimated installment of Real Property Taxes and insurance
premiums divided by the number of months remaining before the month in which
said installment becomes delinquent.  When the actual amount of the applicable
tax bill and insurance premium is known, the amount of such equal monthly
advance payments shall be adjusted as required to provide the funds needed to
pay the applicable taxes and insurance premiums.  If the amount collected by
Landlord is insufficient to pay such Real Property Taxes and insurance premiums
when due, Tenant shall pay Landlord, upon demand, such

                                   Page 23
<PAGE>

additional sums as are necessary to pay such obligations.  All moneys paid to
Landlord under this subparagraph may be intermingled with other moneys of
Landlord and shall not bear interest.  In the event of a default by Tenant in
the performance of its obligations under this Lease, then any balance of funds
paid to Landlord under the provisions of this subparagraph 18.5 may at the
option of Landlord, be treated as an additional security deposit.

        18.6    If the Premises are not separately assessed, Tenant's liability
shall be an equitable proportion of the Real Property Taxes for all of the land
and improvements included within the tax parcel assessed, such proportion to be
conclusively determined by Landlord from the respective valuations assigned in
the assessor's work sheets or such other information as may be reasonably
available.

        18.7    Payments by Tenant hereunder in addition to Base Rent, which
payments include but are not limited to insurance premiums payable to Landlord
and Real Property Taxes, are referred to herein as "Additional Rent."

19.     RULES AND REGULATIONS.  Tenant agrees to abide by all rules and
regulations of the Premises imposed by Landlord as set forth in EXHIBIT B
attached hereto, as the same may be reasonably changed from time to time by
Landlord upon reasonable notice to Tenant.  Any such change shall be effective
upon delivery of a copy thereof to Tenant.  These rules and regulations are
imposed for the cleanliness, good appearance, proper maintenance, good order and
reasonable use of the Premises and the Building.

20.     HOLDING OVER.  If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.
Any holding over without the express written consent obtained from Landlord by
Tenant shall not constitute a renewal or extension hereof or give Tenant any
rights under this Lease.  If Tenant shall hold over without the express written
consent of Landlord, Landlord may, at its option treat Tenant as a tenant at
sufferance only and subject to all of the terms and conditions herein contained,
except that the monthly rental shall

                                   Page 24
<PAGE>

be one-hundred fifty percent (150%) of the total monthly rental applicable at
the date of expiration plus all other charges payable hereunder, or at
Landlord's then published rent for the Premises without regard to any tenant
concessions, whichever is greater.  If Tenant fails to surrender the Premises
upon the expiration of this Lease, Tenant shall indemnify and hold Landlord
harmless from all loss or liability, including without limitation, any claims
made by any succeeding tenant founded on or resulting from such failure to
surrender.  Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a holdover hereunder or result in
a renewal of this Lease.

21.     ENTRY BY LANDLORD.  Landlord reserves, and shall at reasonable times
upon twenty-four (24) hours prior notice (except in the case of an emergency
when prior notice will not be required) have, the right to enter the Premises,
inspect the same, provide any and all services which are to be provided by
Landlord to Tenant hereunder, to submit said Premises to prospective purchasers
or tenants, to post notices of non-responsibility and to alter, improve or
repair the Premises and any portion thereof that Landlord may deem necessary or
desirable and may for that purpose erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed without abatement of rent so long as access to and use of the Premises
shall not be blocked or prevented thereby and further providing that the
business of Tenant shall not be interfered with unreasonably.  So long as access
to and use of the Premises is not blocked or prevented by Landlord's actions
contemplated by the immediately preceding sentence, Tenant shall have no claim
for damages or for any injury or inconvenience to or interference with Tenant's
business occasioned thereby.  For each of the aforesaid purposes, Landlord shall
at all times have and retain a key with which to unlock all of the doors in,
upon and about the Premises, excluding Tenant's vaults, safes and files, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises without liability to Tenant except for any failure to exercise due care
for Tenant's property.  Any entry to the Premises obtained by Landlord by any of
said means or otherwise shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Premises or an
eviction of Tenant from the Premises or any portion thereof.

                                       Page 25
<PAGE>

22.     RECONSTRUCTION.

        22.1    For purposes of this Paragraph 22, the following terms shall
have the following meanings:

                (a)     "PREMISES PARTIAL DAMAGE"  shall mean damage or
destruction to the improvements on the Premises, other than improvements
installed by and/or paid for by Tenant, which can reasonably be repaired in six
(6) months or less from the date of the damage or destruction.  Landlord shall
notify Tenant in writing within thirty (30) days from the date of the damage or
destruction as to whether or not the damage is Partial or Total.

                (b)     "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than improvements installed by and/or paid
for by Tenant, which cannot reasonably be repaired in six (6) months or less
from the date of the damage or destruction.  Landlord shall notify Tenant in
writing within thirty (30) days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

                (c)     "INSURED LOSS" shall mean damage or destruction to
improvements on the Premises, other than improvement installed by and/or paid
for by Tenant, which was caused by an event required to be covered by the
insurance described in Paragraph 16, irrespective of any deductible amounts or
coverage limits involved.

                (d)     "REPLACEMENT COST" shall mean the cost to repair or
rebuild the improvements owned by Landlord at the time of the occurrence to
their condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of Applicable Requirements, and
without deduction for depreciation.

        22.2    If a Premises Partial Damage that is an Insured Loss occurs,
then Landlord shall, at Landlord's expense, repair such damage (but not
improvements installed by and/or paid for by Tenant) as soon as reasonably
possible and this Lease shall continue in full force and effect.
Notwithstanding the foregoing, if the required insurance was not in force, the
party required to maintain the insurance as required by this Lease shall
promptly contribute the shortage in proceeds as and when required to complete
said repairs.  In the event, however, such shortage was due to the fact that, by
reason of the

                                       Page 26
<PAGE>

unique nature of the improvements, full replacement cost insurance coverage was
not commercially reasonable and available, Landlord shall have no obligation to
pay for the shortage in insurance proceeds or to fully restore the unique
aspects of the Premises unless Tenant provides Landlord with the funds to cover
same, or adequate assurance thereof, within ten (10) days following receipt of
written notice of such shortage and request therefor.  If Landlord receives said
funds or adequate assurance thereof within said ten (10) day period, Landlord
shall complete them as soon as reasonably possible and this Lease shall remain
in full force and effect.  If such funds or assurance are not received, Landlord
may nevertheless elect by written notice to Tenant within ten (10) days
thereafter to:  (i) make such restoration and repair as is commercially
reasonable with Landlord paying any shortage in proceeds, in which case this
Lease shall remain in full force and effect, or (ii) have this Lease terminate
thirty (30) days thereafter. Tenant shall not be entitled to reimbursement of
any funds contributed by Tenant to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to
Paragraph 22.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either party.

        22.3    If a Premises Partial Damage that is not an Insured Loss occurs,
unless caused by a grossly negligent or willful act of Tenant (in which event
Tenant shall make the repairs at Tenant's expense), Landlord may either:  (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii)
terminate this Lease by giving written notice to Tenant within thirty (30) days
after receipt by Landlord of knowledge of the occurrence of such damage.  Such
termination shall be effective sixty (60) days following the date of such
notice.  In the event Landlord elects to terminate this Lease, Tenant shall have
the right within ten (10) days after receipt of the termination notice to give
written notice to Landlord of Tenant's commitment to pay for the repair of such
damage without reimbursement from Landlord.  Tenant shall provide Landlord with
said funds or satisfactory assurance thereof within thirty (30) days after
making such commitment.  In such event this Lease shall continue in full force
and effect, and Landlord shall proceed to make such

                                       Page 27
<PAGE>

repairs as soon as reasonably possible after the required funds are available.
If Tenant does not make the required commitment, this Lease shall terminate as
of the date specified in the termination notice.

        22.4    Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate sixty (60) days following such
destruction.  If the damage or destruction was caused by the gross negligence or
willful misconduct of Tenant, Landlord shall have the right to recover
Landlord's damages from Tenant, except to the extent covered by insurance.

        22.5    If at any time during the last six (6) months of this Lease
there is damage for which the cost to repair exceeds one (1) month's Base Rent,
whether or not an Insured Loss, Landlord may terminate this Lease effective
sixty (60) days following the date of occurrence of such damage by giving a
written termination notice to Tenant within thirty (30) days after the date of
occurrence of such damage.  Notwithstanding the foregoing, if Tenant at that
time has an exercisable option to extend this Lease, then Tenant may preserve
this Lease by:  (a) exercising such option and (b) providing Landlord with any
shortage in insurance proceeds (or adequate assurance thereof) needed to make
the repairs on or before the earlier of (i) the date which is ten days after
Tenant's receipt of Landlord's written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires.  If
Tenant duly exercises such option during such period and provides Landlord with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Landlord shall, at Landlord's commercially reasonable expense, repair
such damage as soon as reasonably possible and this Lease shall continue in full
force and effect.  If Tenant fails to exercise such option and provide such
funds or assurance during such period, then this Lease shall terminate on the
date specified in the termination notice and Tenant's option shall be
extinguished.

        22.6    In the event of Premises Partial Damage or Premises Total
Destruction for which Tenant is not responsible under this Lease, the Rent
payable by Tenant for the period required for the repair, remediation or
restoration of such damage shall be abated in proportion to the degree to which
Tenant's use of the Premises is impaired.  All other obligations of Tenant
hereunder shall be performed by Tenant,

                                       Page 28
<PAGE>

and Landlord shall have no liability for any such damage, destruction,
remediation, repair or restoration as provided herein.

        22.7    If Landlord shall be obligated to repair or restore the Premises
and does not commence, in a substantial and meaningful way, such repair or
restoration within ninety (90) days after such obligation shall accrue, Tenant
may, at any time prior to the commencement of such repair or restoration, give
written notice to Landlord and to any lenders of Landlord of which Tenant has
actual notice, of Tenant's election to terminate this Lease on a date not less
than sixty (60) days following the giving of such notice.  If Tenant gives such
notice and such repair or restoration is not commenced within thirty (30) days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within said thirty (30) days, this
Lease shall continue in full force and effect.  If the repair or restoration of
the Premises is not substantially completed within two hundred seventy (270)
days after the date of the damage or destruction, Tenant may, at any time prior
to the substantial completion of such repair or restoration, terminate this
Lease on written notice to Landlord.  "COMMENCE" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

        22.8    Landlord and Tenant agree that the terms of this Lease shall
govern the effect of any damage to or destruction of the Premises with respect
to the termination of this Lease and hereby waive the provisions of any present
or future statute to the extent inconsistent herewith.

23.     DEFAULT.  The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:

        23.1    Any failure by Tenant to pay the rent or to make any other
payment required to be made by Tenant hereunder at the time specified for
payment.  Landlord shall give Tenant three (3) days' written notice of default,
which notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 et seq. of the California Code of Civil Procedure, as
amended.

        23.2    The abandonment of the Premises by Tenant.  Abandonment is
herein defined to include, but is not limited to, any absence by Tenant from the
Premises for thirty (30) days or longer, except where

                                       Page 29
<PAGE>

Tenant has advised Landlord in writing that Tenant has not abandoned the
Premises and Tenant continues during such absence to perform all of its
obligations under this Lease.

        23.3    Any failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for thirty (30) days (except where a different period of time is
specified in this Lease) after written notice by Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 et seq. of the California Code of Civil
Procedure, as amended.  If the nature of such default is such that the same
cannot reasonably be cured within such thirty (30) day period Tenant shall not
be deemed to be in default if Tenant shall commence such cure within such period
and thereafter diligently prosecute the same to completion.

        23.4    Tenant makes or has made or furnishes or has furnished any
warranty, representation or statement to Landlord in connection with this Lease,
or any other agreement to which Tenant and Landlord are parties, which is or was
false or misleading in any material respect when made or furnished.

        23.5    [INTENTIONALLY DELETED.]

        23.6    The making by Tenant of any general assignment for the benefit
of creditors; the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or of a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within sixty (60) days; the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within sixty (60) days; or Tenant's convening of a meeting of its
creditors or any class thereof for the purpose of effecting a moratorium upon or
composition of its debts.

24.     REMEDIES FOR DEFAULT.

        24.1    In the event of any default by Tenant pursuant to Paragraph 23
above, then in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to

                                       Page 30
<PAGE>

terminate this Lease and all rights of Tenant hereunder by giving written notice
of such intention to terminate.  In the event that Landlord shall elect to so
terminate this Lease then Landlord may recover from Tenant:

                (a)     The worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus


                (b)     The worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss which Tenant proves reasonably
could have been avoided; plus

                (c)     The worth at the time of award of the amount by which
the unpaid rent for the balance of the term of this Lease after the time of
award exceeds the amount of such rental loss that Tenant proves reasonably could
be avoided; plus

                (d)     Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including without limitation the unamortized balance
of any tenant improvement allowance provided to Tenant by Landlord or of any
tenant improvements constructed or paid for by Landlord at the commencement of
the term hereof, which amount shall be deemed Additional Rent automatically due
and payable hereunder upon the occurrence of an event of default by Tenant and
shall be recoverable as rent in any unlawful detainer or other action arising
out of or pertaining to such default, whether or not specified in any notice
given by Landlord as a condition or prior to the commencement of any such
action; and at Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable California
law.

        24.2    As used in subparagraphs 24.1(a) and (b) above, the "worth at
the time of award" is computed by allowing interest at the rate of ten percent
(10%) per annum.  As used in subparagraphs 24.1(c), the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award plus one percent.

                                       Page 31
<PAGE>

        24.3    In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.

        24.4    In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided above
or shall take possession of the Premises pursuant to legal proceedings or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in this Paragraph 24, Landlord may from time to
time, without terminating this Lease, either recover all rental as it becomes
due or relet the Premises or any part thereof for such term or terms and at such
rental or rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises.  Election by Landlord to proceed pursuant to this
subparagraph shall be made upon written notice to Tenant and shall be deemed an
election of the remedy described in California Civil Code Section 1951.4 and,
unless Landlord re-lets the Premises, Tenant shall have the right to sublet or
assign subject to the prior written consent of Landlord.  Such consent shall not
be unreasonably withheld and shall be subject to all of the terms and provisions
of Paragraph 13.

        24.5    In the event that Landlord shall elect to so relet, then rentals
received by Landlord from such reletting shall be applied: first, to the payment
of any indebtedness other than rent due hereunder from Tenant to Landlord;
second, to the payment of any reasonable cost of such reletting; third, to the
payment of the cost of any repairs to the Premises necessitated by Tenant's use;
fourth, to the payment of rent due and unpaid hereunder; and the residue if any,
shall be held by Landlord and applied in payment of future amounts as the same
may become due and payable hereunder.  Should the rent for such reletting,
during any month for which the payment of rent is required hereunder, be less
than the rent payable during that month by Tenant hereunder, then Tenant shall
pay such deficiency to Landlord immediately upon demand therefor by Landlord.
Such deficiency shall be calculated and paid monthly.  Tenant shall also pay to
Landlord as soon as ascertained, any reasonable costs and expenses incurred

                                       Page 32
<PAGE>

by Landlord in such reletting or in making such repairs not covered by the
rentals received from such reletting.

        24.6    No re-entry or taking possession of the Premises by Landlord
pursuant to this Paragraph 24 shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.

        24.7    In any action for unlawful detainer commenced by Landlord
against Tenant by reason of any default hereunder, the reasonable rental value
of the Premises for the period of the unlawful detainer shall be the amount of
rent reserved in this Lease for such period.  The rights and remedies reserved
to Landlord herein, including those not specifically described, shall be
cumulative and, except as otherwise provided by California statutory law in
effect at the time, Landlord may pursue any or all of such rights and remedies,
at the same time or otherwise.

        24.8    All covenants and agreements to be performed by Tenant under
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of rent.  If Tenant fails to pay any sum of money, other
than rent, required to be paid by it or fails to perform any other act on its
part to be performed, and such failure continues beyond any applicable grace
period set forth in the Paragraph providing for such obligation (or if no grace
period is set forth in such Paragraph, then the applicable grace period pursuant
to Paragraph 23), then in addition to any other remedies provided herein
Landlord may, but shall not be obligated so to do, without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant's part, including the removal of any offending signs.
Landlord's election to make any such payment or perform any such act on Tenant's
part shall not give rise to any responsibility of Landlord to continue making
the same or similar payments or performing the same or similar acts.  Tenant
shall, within ten (10) days after written demand therefor by Landlord, reimburse
Landlord for all sums so paid by Landlord and all necessary incidental costs,
together with interest thereon at the rate of ten percent (10%) per annum,
accruing from

                                       Page 33
<PAGE>

the date of such payment by Landlord, and Landlord shall have the same rights
and remedies in the event of failure by Tenant to pay such amounts as Landlord
would have in the event of a default by Tenant in payment of rent.

25.     SUCCESSOR LANDLORD'S LIABILITY.  The liability of any
successor-in-interest to Landlord under this Lease ("Successor Landlord") shall
be limited to the Successor Landlord's estate in the Premises.

26.     EMINENT DOMAIN.  If the whole of the Premises shall be taken, or such
part thereof shall be taken as shall substantially interfere with Tenant's use
and occupancy of the balance thereof, under power of eminent domain, or sold,
transferred, or conveyed in lieu thereof, either Tenant or Landlord may
terminate this Lease as of the date of such condemnation or as of the date
possession is taken by the condemning authority, whichever date occurs later.
If any part of the Premises shall be so taken, sold, transferred or conveyed in
lieu thereof, which does not substantially interfere with Tenant's use and
occupancy of the balance thereof, this Lease shall not terminate but Landlord's
and Tenant's rights shall be as set forth below.  No award for any partial or
entire taking shall be apportioned, and Tenant hereby assigns to Landlord any
award which may be made in such taking or condemnation, together with any and
all rights of Tenant now or hereafter arising in or to the same or any part
thereof; provided, however, that nothing contained herein shall be deemed to
give Landlord any interest in or require Tenant to assign to Landlord any award
made to Tenant for the taking of personal property and fixtures belonging to
Tenant and removable by Tenant at the expiration of the term hereof, as provided
hereunder, or for the interruption of, or damage to Tenant's business or for
relocation expenses recovered against the condemning authority.  In the event of
a partial taking, or a sale, transfer, or conveyance in lieu thereof, which does
not result in a termination of this Lease, Landlord shall, to the extent of any
funds received from the condemning authority for repair or restoration, restore
the Premises substantially to their condition prior to such partial taking, and
thereafter Base Rent shall be abated in the proportion which the square footage
of the part of the Premises so made unusable bears to the amount of area rented
immediately prior to the taking.  No taking for a period of less than thirty
(30) days of all or a part of the

                                       Page 34
<PAGE>

Premises shall give Tenant any right to terminate this Lease, but Tenant shall
receive an abatement of Base Rent.

27.     HAZARDOUS MATERIALS.

        27.1    Without limiting the generality of Paragraphs 8 and 9 of this
Lease, Tenant covenants and agrees that Tenant, its employees, agents and other
third parties entering upon the Premises at the request or invitation of Tenant
shall not bring into, maintain upon, generate, produce, use, store, dispose of
or release or discharge in or about the Premises any hazardous or toxic
substances or hazardous waste, as more fully defined below (collectively,
"hazardous materials").  The foregoing covenant shall not extend to substances
typically found or used in applications of the type permitted by this Lease so
long as:  (a) such substances are maintained only in such quantities as are
reasonably necessary for Tenant's operations in the Premises; (b) such
substances and all equipment which generates such substances are used strictly
in accordance with the manufacturers' instructions therefor; (c) such substances
are not disposed of in or about the Premises in a manner which would constitute
a release or discharge thereof; and (d) all such substances and all equipment
which generates such substances are removed from the Premises by Tenant upon the
expiration or earlier termination of this Lease.  Any introduction, use,
storage, generation, maintenance, production, disposal, release or discharge by
Tenant of hazardous materials in or about the Premises as is permitted pursuant
to this Paragraph shall be carried out in compliance with all applicable
federal, state and local laws, ordinances, rules and regulations.  Moreover, no
hazardous waste resulting from any operations by Tenant shall be stored or
maintained by Tenant in or about the Premises for more than thirty (30) days
prior to removal by Tenant.  In no event shall Tenant install any chemical
storage tank in or about the Premises.  Tenant shall, annually within thirty
(30) days after Tenant's receipt of Landlord's written request therefor, provide
to Landlord a written list identifying any hazardous materials then maintained
by Tenant in the Premises, the use of each such hazardous material and the
approximate quantity of each such hazardous material so maintained by Tenant,
together

                                       Page 35
<PAGE>

with written certification by Tenant stating, in substance, that neither Tenant
nor any person for whom Tenant is responsible has released or discharged any
hazardous materials in or about the Premises.

        27.2    In the event that Tenant proposes to conduct any use or to
operate or store any equipment which will or may utilize or generate a hazardous
material other than as specified in subparagraph 27.1, Tenant shall first submit
in writing such use, storage or equipment proposal to Landlord for approval.  No
approval by Landlord shall relieve Tenant of any obligation of Tenant pursuant
to this Paragraph, including the removal, clean-up and indemnification
obligations imposed upon Tenant by this Paragraph.  Tenant shall, within five
(5) days after receipt thereof, furnish to Landlord copies of all notices or
other communications received by Tenant with respect to any actual or alleged
release or discharge of any hazardous material in or about the Premises and
shall, whether or not Tenant receives any such notice or communication, notify
Landlord in writing of any discharge or release of hazardous material in or
about the Premises.

        27.3    Upon any violation of the foregoing covenants, Tenant shall be
obligated, at Tenant's sole cost, to clean-up and remove from the Premises all
hazardous materials introduced into the Premises by Tenant or any third party
for whom Tenant is responsible.  Such clean-up and removal shall include all
testing and investigation required by any governmental authorities having
jurisdiction and preparation and implementation of any remedial action plan
required by any governmental authorities having jurisdiction.  All such clean-up
and removal activities of Tenant shall, in each instance, be conducted to the
reasonable satisfaction of Landlord and all governmental authorities having
jurisdiction.  Landlord's right of entry pursuant to Paragraph 21 shall include
the right to enter and inspect the Premises for violations of Tenant's covenants
herein.

        27.4    Tenant shall indemnify, defend (with counsel approved by
Landlord) and hold harmless Landlord, its partners, directors, officers,
employees, agents, lenders and attorneys and their respective successors and
assigns from and against any and all claims, liabilities, losses, actions, costs
and expenses (including attorneys' fees and costs of defense) incurred by such
indemnified persons, or any of them, as the result of:  (i) the introduction of
any hazardous materials into or about the Premises by

                                       Page 36
<PAGE>


Tenant, its employees, agents or contractors; (ii) the usage, storage,
maintenance, generation, production, disposal, release or discharge of hazardous
materials in or about the Premises by Tenant, its employees, agents or
contractors; (iii) any injury to or death of persons or damage to or destruction
of property resulting from the use, introduction, maintenance, production,
storage, generation, disposal, disposition, release or discharge of hazardous
materials in or about the Premises by Tenant, its employees, agents or
contractors; and/or (iv) any failure of Tenant, its employees, agents or
contractors to observe the covenants of this Paragraph 27.  Payment shall not be
a condition precedent to enforcement of the foregoing indemnification provision.
If any claim for indemnification is made by Landlord hereunder, or if Tenant is
required hereunder to perform any remedial activity pursuant to this Paragraph,
Landlord agrees to grant to Tenant such access to portions of the Premises as is
reasonably necessary for the purpose of effecting a remediation of the
occurrence giving rise to such claim for indemnification or duty of remediation.

        27.5    In the event that Tenant is required by any governmental
authority to maintain any hazardous materials license or permit in connection
with any use conducted by Tenant or any equipment operated by Tenant in, on or
about the Premises, copies of such license or permit, each renewal or revocation
thereof, and any communication relating to suspension, renewal or revocation
thereof shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant.  Compliance by Tenant with the provisions of this
subparagraph and the second subparagraph of this Paragraph 27 shall not relieve
Tenant of any other obligation of Tenant pursuant to this Paragraph.

        27.6    Upon any violation of the foregoing covenants Landlord shall be
entitled to exercise all remedies available to a landlord against a defaulting
tenant, including, but not limited to these set forth in Paragraph 24.  Without
limiting the generality of the foregoing, Tenant expressly agrees that upon any
such violation Landlord may, at its option, (i) immediately terminate this
Lease, or (ii) continue this Lease in effect until compliance by Tenant with its
clean-up and removal covenant notwithstanding any earlier expiration date of the
term of this Lease.  No action by Landlord hereunder shall impair the
obligations of Tenant pursuant to this Paragraph.

                                       Page 37
<PAGE>

        27.7    As used in this Paragraph 27, the term "hazardous materials"
shall mean any hazardous materials, hazardous wastes or hazardous or toxic
substances as defined by Environmental Laws.  As used in this Paragraph 27,
"Environmental Laws" means the Resource Conservation and Liability Act, and
Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act, the Safe Drinking Water Act, the Clean Air Act, the toxic
Substances Control Act, the Atomic Energy Act, the Endangered Species Act,
California Health and Safety Code Section 25316 , and any similar laws affecting
the Premises or the use thereof, and any amendments to any of the foregoing.

        27.8    Landlord represents and warrants that, as of the Commencement
Date, the Premises are in compliance with the applicable environmental laws,
rules, regulations, directives or orders of any governmental authority relating
to the protection of human health or the environment, relating to the injury or
damage to, or restoration or replacement of, natural resources, or relating to
land reclamation, including, but not limited to, to the extent applicable,
requirements under Environmental Laws.  To Landlord's knowledge as of the
Commencement Date, there has not been any notice, written or oral, provided to
Landlord by any governmental agency or authority, or by any previous tenant or
owner, or any other party of any violation, alleging violation, of, or
investigation relating to, any Environmental Law.  To Landlord's knowledge as of
the Commencement Date, there is no legal, administrative, investigatory or other
proceedings, pending or threatened against Landlord which relate to any
violation of Environmental Law.  These representations and warranties, and the
indemnification obligations set forth below, shall survive the termination or
expiration of the Lease until the lapse of all applicable statutes of
limitations, if any.  Landlord hereby agrees to indemnify and hold Tenant
(including its officers, directors, employees, agents, successors and assigns)
harmless from any damages, losses, costs or expenses, suffered or paid as a
result of any and all claims, damages, suits, causes of action, proceedings,
judgments, liabilities, penalties, interest, losses, damages, costs or expenses,
including reasonable attorney's fees incurred in litigation or otherwise,
assessed, incurred or sustained by or against Tenant with respect to or arising
out of the failure or breach of any representation or warranty contained herein
and made by Landlord with respect to Environmental Laws or hazardous materials,
or the use, production, storage,

                                       Page 38
<PAGE>

maintenance, generation, disposal, release or discharge of any hazardous
materials into the environment from or at the Premises or from materials which
Landlord or any prior tenant or owner of the Premises disposed of or arranged
for the disposal of offsite, or any adverse effect or potential adverse effect
on humans or the environment deriving therefrom.

        27.9    Attached to this Lease at EXHIBIT "C" is a true copy of
Environmental Audit Report for the Premises prepared by Ralph Stone and Company,
Inc.

28.     OFFSET STATEMENT.  Tenant shall at any time and from time to time upon
not less ten (10) days' prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing, (a) certifying that this Lease
is unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease as so modified, is in full
force and effect) and the date to which the rental and other charges are paid in
advance, if any, and (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults if any are claimed.  Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part.  In the event Tenant does
not provide Landlord with an offset statement as required in this paragraph
within the ten (10) day period mentioned therein, Tenant shall be deemed to have
acknowledged all of the matters set forth herein.

29.     TRAFFIC AND ENERGY MANAGEMENT.

        29.1    Tenant agrees to cooperate and use reasonable efforts to
participate in governmentally mandated traffic management programs generally
applicable to businesses located in Burbank, California or to the Premises.
Neither this Paragraph nor any other provision in this Lease, however, is
intended to or shall create any rights or benefits in any other person, firm,
company, governmental entity or the public.

        29.2    Tenant agrees to cooperate and use reasonable efforts to comply
with any and all mandatory guidelines or controls imposed upon either Landlord
or Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.

                                       Page 39
<PAGE>

        29.3    [INTENTIONALLY DELETED.]

30.     [INTENTIONALLY DELETED.]

31.     [INTENTIONALLY DELETED.]

32.     AUTHORITY OF PARTIES.  Each individual executing this Lease on behalf of
Landlord and Tenant represents and warrants that the execution and delivery of
this Lease on behalf of the party for whom such person is executing is duly
authorized, that he or she is authorized to execute and deliver this Lease and
that this Lease is binding upon such party in accordance with its terms.  If
Tenant is a corporation, Tenant shall, within ten (10) days after execution of
this Lease, deliver to Landlord a certified copy of a resolution of the Board of
Directors of Tenant, or any executive committee thereof, authorizing or
ratifying the execution of this Lease.  Failure of Tenant to provided such
resolution shall not, however, relieve Tenant of its obligations pursuant to
this Lease.

33.     GENERAL PROVISIONS.

        33.1    CLAUSES, PLATS AND RIDERS.  Clauses, plats, and riders, if any,
signed by the Landlord and the Tenant and endorsed on or affixed to this Lease
are a part hereof.

        33.2    WAIVER.  No waiver by Landlord of any provision of this Lease or
of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any other
provision.  Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act of Tenant.
No act or thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, unless done
in a writing signed by Landlord.  Tenant's delivery of keys to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises unless done pursuant to a written agreement to such
effect executed by Landlord.  The acceptance of any rent by Landlord following a
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such

                                       Page 40
<PAGE>

breach (other than the failure to pay the particular rent so accepted) or any
other breach unless such waiver is expressly stated in a writing signed by
Landlord.  The acceptance of any payment from a debtor in possession, a trustee,
a receiver or any other person acting on behalf of Tenant or Tenant's estate
shall not waive or cure a default under Paragraph 23.6 or waive the provisions
of Paragraph 13.

        33.3    NOTICES.  All notices and demands which may or are to be
required or permitted to be given by either party to the other hereunder shall
be in writing.  All notices and demands by the Landlord to the Tenant shall be
personally served on Tenant at the Premises or shall be sent by United States
certified mail, return receipt requested, postage prepaid, addressed to the
Tenant at the Premises, or to such other place as Tenant may from time to time
designate in a notice to the Landlord.  All notices and demands by the Tenant to
the Landlord shall be personally served on Landlord at the office of the
Building or shall be sent by United States certified mail, return receipt
requested, postage prepaid, addressed to the Landlord in care of John B. Miles,
Esq., McDermott, Will & Emery at 1301 Dove Street, Suite 500, Newport Beach,
California 92660, or to such other person or place as the Landlord may from time
to time designate in a notice to the Tenant.  All notices shall be deemed
effective upon receipt.  If personally delivered, notices shall be deemed
received at the time of delivery.  If any notice is sent by mail, the same shall
be deemed delivered and received on the date of receipt, refusal or nondelivery
indicated on the return receipt.  Any notice provided for herein may also be
sent by facsimile transmission or by any reputable overnight courier so long as
written confirmation of delivery of such notice is obtained by the sender.

        33.4    [INTENTIONALLY DELETED.]

        33.5    MARGINAL HEADINGS.  The marginal headings and Paragraph titles
to the Paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.

        33.6    TIME.  Time is of the essence of this Lease and of each and all
of its provisions in which performance is a factor.

                                       Page 41
<PAGE>

        33.7    SUCCESSORS AND ASSIGNS.  The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

        33.8    LATE CHARGES.  Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain.  Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount for the first late payment during any twelve
(12) month period and six percent (6%) of such overdue amount for any other late
payment during such twelve (12) month period.  In addition, any amount not paid
when due shall bear interest at the rate of ten percent (10%) per year from the
due date until paid.  The parties hereby agree that such late charges and
interest represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of the late payment by Tenant.  Acceptance of such late charges
and interest by the Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder regardless of
any indication to the contrary on the check cashed.  In the event that any check
or other payment device for rent, or any other charge hereunder, is returned due
to insufficient funds or any other reason, the foregoing late payment and
interest charges shall apply and Landlord may require all further payments to be
made by money order, cashier's check or in cash.

        33.9    PRIOR AGREEMENTS.  This Lease and the Exhibits hereto contain
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreements or understanding pertaining
to any such matters shall be effective for any purpose.  No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or

                                       Page 42
<PAGE>

their respective successors in interest.  This Lease shall not be effective or
binding on any party until fully executed by both parties hereto.

        33.10   INABILITY TO PERFORM.  This Lease and the obligations of each
party hereunder shall not be affected or impaired because the other party is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such liability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of such other party.

        33.11   ATTORNEYS' FEES.  In the event of any action or proceeding
brought by either party against the other under this Lease the prevailing party
shall be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees.  If Landlord is involuntarily made a party
defendant to any litigation concerning this Lease or the Premises by reason of
any act or omission of Tenant, then Tenant shall hold Landlord harmless from all
costs, liabilities, damages and expenses by reason thereof, including attorneys'
fees and all costs incurred by Landlord in such litigation.

        33.12   SALE OF PREMISES BY LANDLORD.  In the event of any sale of the
Building, Landlord shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease arising out of any
act, occurrence or omission occurring after the consummation of such sale.

        33.13   SUBORDINATION, ATTORNMENT.  Without the necessity of any
additional documents being executed by Tenant for the purpose of effecting a
subordination and at the election of Landlord or any mortgagees with a lien on
the Building or ground lessor with respect to Building, this Lease is subject
and subordinate to any and all ground or underlying leases, mortgages or deeds
of trust which may hereafter be executed covering the Premises, the Building and
the real property of which it is a part, or any

                                       Page 43
<PAGE>

renewals, modifications, consolidations, replacements or extensions thereof, for
the full amount of all advances made or to be made thereunder and without regard
to the time or character of such advances, together with interest thereon and
subject to all the terms and provisions thereof.  Notwithstanding the foregoing,
Tenant agrees, within ten (10) days after Landlord's written request therefor,
to:  (a) execute, acknowledge and deliver any and all documents or instruments
requested by Landlord, or that are necessary or proper to assure the
subordination of this Lease to any such mortgages, deeds of trust, or leasehold
estates; and (b) supply such financial information concerning Tenant as may be
requested by any ground lessor or lender.  Notwithstanding such subordination,
Tenant's quiet enjoyment of the Premises will not be disturbed so long as Tenant
pays rent and observes and performs all of the provisions of this Lease to be
observed and performed by Tenant.  Notwithstanding anything to the contrary set
forth in this Paragraph, Tenant hereby attorns and agrees to attorn to (at the
option of) any person, firm, or corporation purchasing or otherwise acquiring
the building and the real property of which it is a part, at any sale or other
proceeding or pursuant to the exercise of any other rights, powers, or remedies
under such mortgages, or deeds of trust, or ground or underlying leases, as if
such person, firm or corporation had been named as Landlord herein, provided
that such person, firm, or corporation shall accept the Premises subject to this
Lease.  Tenant hereby appoints Landlord the attorney-in-fact of Tenant,
irrevocably, to execute and deliver any documents provided for herein for and in
the name of Tenant; such power, being coupled with an interest, being
irrevocable.  The provisions of this Paragraph to the contrary notwithstanding,
and so long as Tenant is not in default hereunder, this Lease shall remain in
full force and affect for the full term hereof.

        33.14   NAME.  Tenant shall not use the name of the Building or of the
Project for any purpose other than as an address of the business to be conducted
by the Tenant in the Premises.

        33.15   SEPARABILITY.  Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
affect.

                                       Page 44
<PAGE>

        33.16   CUMULATIVE REMEDIES.  No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

        33.17   CHOICE OF LAW.  This Lease shall be governed by the laws of the
State of California.

        33.18   AUCTIONS.  Tenant shall not conduct any auction on the Premises
without Landlord's prior written consent.

        33.19   [INTENTIONALLY DELETED.]

        33.20   NEGOTIATED TRANSACTION.  This Lease has been negotiated at arm's
length.  Accordingly, the provisions of this Lease shall be deemed to have been
drafted by all of the parties and any rule of law that would require
interpretation of this Lease against the party that has drafted it is not
applicable and is waived.

        33.21   [INTENTIONALLY DELETED.]

        33.22   QUITCLAIM OF INTEREST.  At the expiration or earlier termination
of this Lease, Tenant shall execute, acknowledge and deliver to Landlord, within
five (5) days after written demand from Landlord to Tenant, any quitclaim deed
or other document which may be reasonably requested by any reputable title
insurance company to remove this Lease as a matter affecting title to the
Premises on a preliminary title report or title policy issued with respect to
the Premises.

        33.23   [INTENTIONALLY DELETED.]

        33.24   SURVIVAL OF INDEMNITIES.  The obligations of the indemnifying
party under each and every indemnification and hold harmless provision in this
Lease shall survive the expiration or earlier termination of this Lease to and
until the last to occur of:   (a) the last date permitted by law for the
bringing of any claim or action with respect to which indemnification may be
claimed by the indemnified party against the indemnifying party under such
provisions, or (b) the date on which any claim or action for which
indemnification may be claimed under such provision is fully and finally
resolved and, if applicable, any compromise thereof or judgment or award thereon
is paid in full by the indemnifying party and the indemnified party is
reimbursed by the indemnifying party for any amounts paid by the indemnified
party in compromise thereof or upon a judgment or award thereon and in defense
of such action or claim,

                                       Page 45
<PAGE>

including reasonable attorneys' fees incurred.  Notwithstanding anything to the
contrary in that certain Asset Purchase Agreement or Secured Indemnity
Agreement, each dated approximately of even date herewith and executed by
Landlord and Tenant, or that certain Deed of Trust, dated approximately of even
date herewith and executed by Landlord, as trustor, in favor of Tenant, as
beneficiary, none of the representations, warranties, or other covenants or
obligations herein are secured by such Deed of Trust.

        33.25   NO REPRESENTATION BY LANDLORD.  In no event shall the review,
approval, inspection or examination by Landlord of any item to be reviewed,
approved, inspected or examined by Landlord under the terms of this Lease be
deemed to be an approval of, or representation or warranty as to, the adequacy,
accuracy, sufficiency or soundness of any such item or the quality or
suitability of such item for its intended use.  Any such review, approval,
inspection or examination by Landlord shall be for the sole purpose of
protecting Landlord's interests in the Building and the Project under this
Lease, and no third parties shall have any rights pursuant thereto.

34.     BROKERS.  Tenant warrants that it has had no dealings with any real
estate broker or agents in connection with the negotiation of this Lease and it
knows of no other real estate broker or agent who is entitled to a commission in
connection with this Lease.

35.     QUIET ENJOYMENT.  Upon the payment by Tenant of Base Rent, Additional
Rent and all other sums to be paid hereunder by Tenant and the observance and
performance of all covenants, conditions and provisions on Tenant's part to be
observed and performed under this Lease, Tenant shall have quiet possession of
the Premises for the entire Term subject to all of the provisions of this Lease.

                                       Page 46
<PAGE>


        The parties hereto have executed this Lease at the place and on the
dates specified immediately adjacent to their respective signatures.



                                        ALL POST, INC., a California corporation

                                        By:
                                           -----------------------------------
                                        By:
                                           -----------------------------------
Address                                 Execution Date:
        -----------------------------                   ----------------------
- -------------------------------------                        "Landlord"


                                        VDI MEDIA, a California corporation

                                        By:
                                           -----------------------------------
                                        By:
                                           -----------------------------------
Address                                 Execution Date:
        -----------------------------                   ----------------------
- -------------------------------------                         "Tenant"

                                       Page 47
<PAGE>


                                      SCHEDULE 1

<TABLE>
<CAPTION>

                                      BASE RENT

Adjustment Date                                         Base Rent Per Month
- ---------------                                         -------------------
<S>                                                     <C>
First Adjustment Date                                   $40,000.00
Second Adjustment Date                                  $41,200.00
Third Adjustment Date                                   $42,436.00
Fourth Adjustment Date                                  $43,709.08
Fifth Adjustment Date                                   $45,020.35
Sixth Adjustment Date                                   $46,370.96
Seventh Adjustment Date                                 $47,762.09
Eighth Adjustment Date                                  $49,194.95
Ninth Adjustment Date                                   $50,670.80

</TABLE>


                                      SCHEDULE 1
<PAGE>


                                     EXHIBIT A

                                PREMISES DESCRIPTION

That certain real property situated in the City of Burbank, County of Los
Angeles, State of California, more particularly described as:

Lots 185, 187, 189, 191 and the North one-half of Lot 293 of Tract 7383, as per
map recorded in Book 84, Pages 20 and 21 of Maps, in the office of the County
Recorder of said County.




                                     EXHIBIT A

<PAGE>

                                     EXHIBIT B

                           BUILDING RULES AND REGULATIONS

                 [To be mutually agreed upon by Tenant and Landlord,
              such agreement not to be unreasonably withheld or delayed]



                                     EXHIBIT B

<PAGE>

                                     EXHIBIT C

                              ENVIRONMENTAL AUDIT REPORT







                                    EXHIBIT C

<PAGE>

                                   BUILDING LEASE


1.      PARTIES.   This Building Lease ("Lease"), dated for reference purposes
only, June 11, 1998, is made by and between ALL POST, INC., a California
corporation, herein called "Landlord" and VDI MEDIA, a California corporation,
herein called "Tenant."

2.      PREMISES.

        2.1     Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain real property (herein called "Premises") indicated on
EXHIBIT A attached hereto and by reference thereto made a part hereof.  Said
Premises are commonly known as 2660 West Olive Avenue, Burbank, California and
have been improved with a building of approximately 33,000 square feet (the
"Building").  The Premises are more particularly described in EXHIBIT A hereto.
Any statement of size set forth in this Lease or that may have been used in
calculating rental is an approximation which Tenant and Landlord agree is
reasonable. Notwithstanding the foregoing, the Tenant or Landlord may elect, at
its sole cost, to cause the square footage of the Building to be measured by a
California licensed architect according to the following criteria:  (i) the
square footage of each above ground floor shall be based on measurements from
the exterior of all exterior walls; and (ii) the square footage of the basement
area shall be based on measurements from the interior of all basement exterior
walls.  When completed, Tenant or Landlord, as the case may be, may deliver its
measurements and calculations to the other and, if within ten (10) business days
of delivery, the other party does not object in writing to the calculated square
footage of the Building, such square footage shall be used to recalculate
Monthly Rent as provided at Paragraph 5 below.  If the other party disagrees in
writing with the calculated square footage within such ten (10) business-day
period, then it may conduct its own calculation thereof in accordance with this
paragraph which shall be completed as soon as reasonably possible.  If after the
time periods provided in this paragraph have elapsed and Landlord and Tenant are
still in disagreement as to the appropriate square


                                        Page 1
<PAGE>

footage after the second calculation, the matter shall be submitted to a
California licensed architect selected by the other two architects and such
architect shall determine which of the two previously made calculations of
square footage shall be used.  Such architect's determination shall be binding
on Landlord and Tenant.  Notwithstanding anything herein to the contrary, the
recalculation of the square footage of the Building must be commenced by the
delivery no later than August 15, 1998 of the initial recalculation by one party
to the other.  Failure to do so shall be deemed both parties' agreement that the
Building contains 33,000 square feet for all purposes under this Lease.

        2.2     This Lease is subject to the terms, covenants and conditions
herein set forth and Tenant and Landlord each covenant to the other as a
material part of the consideration for this Lease to keep and perform each and
all of said terms, covenants and conditions to be kept and performed by Tenant
or Landlord, as applicable, and that this Lease is made upon the condition of
said performance.

        2.3     Landlord shall deliver the Premises to Tenant broom clean and
free of debris  and in good operating order, condition and repair on the
Commencement Date (as defined below) and warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air condition
systems ("HVAC"), loading doors, if any, and all other such elements in the
Premises, other than those constructed by Tenant shall be in good, operating
condition on the Commencement Date and that the structural elements of the roof,
bearing walls and foundation of the Building shall be free of material defects.

        2.4     Landlord warrants that the improvements on the Premises
materially comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("Applicable Requirements") in effect
on the Commencement Date. This warranty does not apply to the use to which
Tenant will put the Premises or to any alterations or modifications made or to
be made to the Premises by Tenant.

3.      TERM.  The term of this Lease shall be for nine (9) months, commencing
on the 11th day of June, 1998 ("Commencement Date"), and ending on the 10th day
of March, 1999 ("Term"), subject to earlier termination as provided herein.
Notwithstanding the foregoing, Landlord may terminate this Lease on not less
than thirty (30) days' advance written notice to Tenant with such termination to
be effective on the


                                        Page 2
<PAGE>

date set forth in such notice which date shall not be earlier than December 10,
1998.  In addition to Landlord's foregoing right to terminate the Lease, Tenant
may, on thirty (30) days' advance written notice to Landlord, (i) terminate this
Lease or (ii) reduce the size of the Premises by returning to Landlord portions
of the Premises as described in SCHEDULE 1 hereto.  Any portion of the Premises
returned to Landlord pursuant to this Paragraph 3 is referred to herein as
"Former Premises."  Effective on the date on which any portion of the Premises
are transitioned to Former Premises, the Monthly Rent shall be reduced in an
amount equal to the Monthly Rent allocable to the Former Premises as more
particularly set forth in SCHEDULE 1.  Additionally, "Premises" shall then be
defined to exclude all Former Premises.  Tenant acknowledges that any Former
Premises may be leased by Landlord to third parties.  In such event Landlord
shall have the right to designate portions of the Premises as "common areas" for
joint use by Landlord, Tenant, such third party tenants and others.  The common
areas shall include only such minimal areas as are necessary to provide for
ingress and egress to the Former Premises and areas for use by others in
connection with the Former Premises including, by way of example, restroom
facilities, stairs, elevators, and parking areas.

4.      POSSESSION. Landlord shall deliver possession of the Premises to Tenant
on the Commencement Date.

5.      MONTHLY RENT. Tenant agrees to pay to Landlord as "Monthly Rent,"
without prior notice, offset, deduction or demand, for the Premises the sum of
Sixty Two Thousand Seven Hundred Dollars ($62,700) ( which equates to One and
90/100 Dollar ($1.90) per square foot of the Building and which is subject to
adjustment as provided at Subparagraph 2.1 above), in advance, on or before the
first day of the first full calendar month of the term hereof and a like sum on
or before the first day of each and every successive calendar month thereafter
during the Term, except that the first month's rent shall be paid upon execution
hereof.  Monthly Rent for any period during the term hereof which is for less
than one (1) month shall be a prorated portion of the monthly installment
herein, based upon a thirty (30) day month.


                                        Page 3
<PAGE>

Monthly Rent shall be paid to Landlord in lawful money of the United States of
America, which shall be legal tender at the time of payment, at such place as
Landlord may from time to time designate in writing.

6.      [INTENTIONALLY DELETED.]

7.      [INTENTIONALLY DELETED.]

8.      USE.  Tenant shall use the Premises for video duplication and audio
production services, vault storage of videos and any ancillary general office
use, and shall not use or permit the Premises to be used for any other purpose
without the prior written consent of Landlord which consent shall not be
unreasonably withheld.  Tenant shall not do or permit anything to be done in or
about the Premises, nor bring or keep anything therein, which will in any way
increase the existing rate of, or adversely affect, any fire insurance upon the
improvements at the Premises or any of its contents, or cause cancellation of
any insurance policy covering said improvements or any part thereof or any of
its contents.  Tenant shall not allow the Premises to be used for any improper,
immoral or unlawful purpose, nor shall Tenant cause, maintain or permit any
nuisance in, on or about the Premises.   Tenant shall not do or permit to be
done anything in or about the Premises which will in any way materially and
adversely obstruct or interfere with the rights of other tenants or occupants of
the improvements at the Premises or injure or annoy them on or about the
Building.  Tenant, its employees, agents and contractors shall not commit any
waste in or upon the Premises.  Without limiting the generality of the
foregoing, Tenant shall not:  (i) obstruct or store anything in the common areas
(including service or exit corridors), (ii) place a load upon any floor of the
Premises which exceeds the floor load per square foot which such floor was
designed to carry or (iii) permit any objectionable sounds or odors to carry
outside the Premises.  Except for the specific uses described in the first
sentence of this Paragraph 8 (i.e., video duplication, audio production services
and vault storage of videos), Landlord shall require similar restrictions on use
as contained in this paragraph from any tenants of the Former Premises, if any,
for the benefit of Tenant and such other tenants.


                                        Page 4
<PAGE>

9.      COMPLIANCE WITH LAW.  Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated.  Tenant shall, at its sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to,
or affecting the condition, use or occupancy of the Premises, excluding
structural changes not related to or affected by Tenant's improvement or acts.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of the fact as between the Landlord and
Tenant.

10.     ALTERATIONS AND ADDITIONS.

        10.1    Only in the event Tenant returns possession of a portion of the
Premises to Landlord pursuant to Paragraph 3 above, Landlord shall have the
right, at any time thereafter, to change the arrangement and/or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets, and other public parts of the improvements at the Premises.  Only if
required by law or government regulations and upon giving Tenant as much advance
notice thereof as is reasonably practical, Landlord shall have the right to
change the name, number or designation by which the Premises are commonly known.

        10.2    Tenant shall not make any alterations, additions or improvements
without the prior written consent of Landlord which shall not be unreasonably
withheld.  All such alterations, additions and improvements shall be made in
conformity with plans therefor reasonably approved by Landlord in writing prior
to the commencement of such work and shall be performed by a tenant improvements
contractor reasonably approved by Landlord.  All such alterations, additions and
improvements (except movable furniture, equipment, furnishings and trade
fixtures) shall become the property of Landlord and shall be



                                        Page 5
<PAGE>

surrendered with the Premises, as a part thereof, at the expiration or earlier
termination of the term hereof.  All such alterations, additions or improvements
shall, however, be made by Tenant at Tenant's sole expense.  Upon termination of
this Lease, Tenant shall, upon demand by Landlord, at Tenant's sole cost and
expense, forthwith remove any alterations, additions or improvements (except
those made initially at the commencement of Tenant's possession of the Premises
with Landlord's written approval) made by Tenant and designated by Landlord at
the time of Landlord's initial approval to be removed, and repair and restore
the Premises to their original condition, reasonable wear and tear excepted.
Any personal property left on or in the Premises at the expiration or earlier
termination of this Lease may, at the option of Landlord, after fifteen (15)
days' written notice to Tenant, either be deemed abandoned and retained by
Landlord, or be placed in storage at a public warehouse in the name of, for the
account of and at the expense and risk of Tenant, or otherwise disposed of by
Landlord in a manner provided by law.  Tenant releases Landlord of and from any
and all claims and liability for damage to, or destruction or loss of, property
left by Tenant upon the Premises at the expiration or other termination of this
Lease.  Tenant further waives all claims to all property (and the proceeds
thereof) abandoned by Tenant and retained or disposed of by Landlord.

        All alterations, additions and/or improvements to the Premises made by
Tenant shall comply with the plans therefor approved in advance by Landlord.
Such plans and any specifications associated therewith shall be prepared by an
architect or interior designer reasonably approved in advance by Landlord.  All
such work by Tenant shall comply with all applicable requirements of all
governmental authorities having jurisdiction of the Premises and shall comply
with all reasonable rules and regulations established by Landlord to ensure the
safety, cleanliness and good order of the Premises and its occupants, including
but not limited to those relating to usage of elevators and loading docks,
establishment of off-Premises staging areas, disposal of refuse and the hours of
performing operations which result in the creation of noise, dust and odors.  No
such alterations, additions or improvements by Tenant shall incorporate therein
any hazardous materials, as defined in Paragraph 27.


                                        Page 6
<PAGE>

        10.3    No antenna, satellite dish, microwave receiver or other
receiving or transmission equipment shall be installed by Tenant in or on the
roof of the improvements at the Premises or elsewhere at the Premises except
with the prior written consent of Landlord which shall not be unreasonably
withheld.  Landlord's consent shall not be withheld unless such installation
would materially injure the Premises.  Any such installation by Tenant shall be
only the particular equipment specifically approved by Landlord, shall be
limited to the manner and location approved by Landlord and shall be subject to
such terms and conditions as are provided by Landlord to Tenant at the time
Landlord approves such installation.

11.     SURRENDER/REPAIRS.

        11.1    Tenant shall surrender the Premises by the end of the Term or
any earlier Termination Date with all the improvements, parts and services
thereof, room clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear accepted.  "Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice.  Tenant shall repair any damage occasioned by the
installation, maintenance removal of its trade fixtures, furnishings and
personal property.

        11.2    Subject to the provisions of Paragraph 22 hereof, Landlord shall
repair and maintain the structural portions of the Premises, including the basic
plumbing, air conditioning, heating, and electrical systems, installed or
furnished by Landlord, unless such maintenance and repairs are necessitated in
part or in whole by the act, neglect, fault or omission of any duty of Tenant,
its agents, servants, employees or invitees, in which case Tenant shall pay to
Landlord the reasonable cost of such maintenance and repairs.  Landlord shall
not be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant.  Except as provided in Paragraph 22 hereof, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Premises or in or to
fixtures, appurtenances and/or equipment therein.  As a material inducement to


                                        Page 7
<PAGE>

Landlord's entering into this Lease, Tenant expressly waives any right to make
repairs at Landlord's expense whether granted by law, statute, ordinance or
otherwise now or hereafter in effect, including but not limited to California
Civil Code Sections 1941, 1941.1. and 1942.

12.     LIENS.  Tenant shall keep the Premises free from any liens arising out
of any work performed, materials furnished or obligations incurred by or for
Tenant.  In the event that Tenant shall not, within ten (10) business days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper lien release bond, Landlord shall have,
in addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall
reasonably deem proper, including payment of or defense against the claim giving
rise to such lien.  All sums paid by Landlord, and all reasonable expenses
incurred by it in connection therewith, shall create automatically an obligation
of Tenant to pay an equivalent amount as additional rent, which additional rent
shall be payable by Tenant within five (5) days after Tenant's receipt of
Landlord's demand therefor with interest at the rate of ten percent (10%)
interest per annum to be charged from date of payment by Landlord until paid by
Tenant.  Nothing herein shall imply any consent by Landlord to subject
Landlord's estate to liability under any mechanics' or other lien law.  Tenant
shall give Landlord adequate opportunity, and Landlord shall have the right, to
post in or on the Premises such notices of nonresponsibility as are provided for
in the mechanics lien laws of the State of California.

13.     ASSIGNMENT AND SUBLETTING.

        13.1    Tenant shall not, either voluntarily, involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Lease or in the Premises or permit the Premises
to be occupied by anyone other than Tenant or Tenant's employees without
obtaining the prior written consent of Landlord, which consent shall be subject
to the provisions of subparagraphs 13.2 through 13.8 below.  Any such attempted
assignment, subletting, mortgage or other encumbrance without such consent shall
be null and void and of no effect.


                                        Page 8
<PAGE>

        13.2    No assignment, subletting, mortgage or other encumbrance of
Tenant's interest in this Lease shall relieve Tenant of its obligation to pay
the rent and to perform all of the other obligations to be performed by Tenant
hereunder.  The acceptance of rent by Landlord from any person other than Tenant
shall not be deemed to be a waiver by Landlord of any provision of this Lease or
to be a consent to any subletting, assignment, mortgage or other encumbrance.
Landlord's consent to one sublease, assignment, mortgage or other encumbrance
shall not be deemed to constitute consent to any subsequent attempted
subletting, assignment, mortgage or other encumbrance.

        13.3    If Tenant desires at any time to assign this Lease or to sublet
the Premises or any portion thereof, it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord:  (i) the name of the
proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or
assignee's business to be carried on in the Premises; (iii) the terms,
conditions and provisions of the proposed sublease or assignment and the
proposed effective date thereof; (iv) such financial information as Landlord may
reasonably request concerning the proposed subtenant or assignee; and (v) the
minimum payment of $500.00 required pursuant to subparagraph 13.8 below.  The
submission pursuant to clause (iii) shall include a copy of any agreement,
escrow instructions or other document which contains or memorializes the terms
and provisions of the transaction for which Landlord's consent is required.
Similarly, if Tenant desires to mortgage or encumber its interest in this Lease,
Tenant shall first supply to Landlord in writing such information as to such
transaction as may be reasonably requested by Landlord.

        13.4    [INTENTIONALLY DELETED]

        13.5    At any time within thirty (30) days after Landlord's receipt of
the last of the information specified in subparagraph 13.3 above, Landlord may,
by written notice to Tenant, (i) approve the proposed assignment or sublease; or
(ii) subject to the provisions of subparagraph 13.6 below, reasonably disapprove
the proposed assignment or sublease.  If Landlord does not disapprove the
proposed subletting or assignment in writing within said thirty (30) day period,
Tenant may thereafter, within ninety (90) days after the expiration of said
thirty (30) day period, enter into a valid assignment or sublease of the
Premises or portion thereof, upon the terms and conditions set forth in the
information


                                        Page 9
<PAGE>

furnished by Tenant to Landlord pursuant to subparagraph 13.3 above.  Provided,
however, that any material change in such terms shall be subject to Landlord's
consent as provided in this Paragraph and, provided further, that any amount to
be paid by Tenant in connection with such subletting or assignment pursuant to
subparagraph 13.4 above shall be paid to Landlord upon and as a condition to
consummation of such transaction.

        13.6    Landlord shall have the right to reasonably approve or
disapprove any proposed assignee or sublessee.  In exercising such right of
reasonable approval or disapproval, Landlord shall be entitled to take into
account any fact or factor which Landlord reasonably deems relevant to such
decision, including, but not necessarily limited to, the following, all of which
are agreed to be reasonable factors for Landlord's consideration:

                (a)     The financial strength of the proposed assignee or
subtenant.

                (b)     The proposed use of the Premises by such proposed
assignee or subtenant and the compatibility of such proposed use with the
quality of the other uses in the Building.

                (c)     Any violation which the proposed use by such proposed
assignee or subtenant would cause of any other rights granted by Landlord to
other tenants of the Building.

                (d)     Any materially adverse impact of the proposed use of the
Premises by such proposed assignee or subtenant upon the parking or other
services provided for Building tenants generally.

                (e)     Whether there then exists any default by Tenant pursuant
to this Lease or any non-payment or non-performance by Tenant under this Lease
which, with the passage of time and/or the giving of notice, would constitute a
default under this Lease.

                (f)     Whether the proposed assignee or subtenant is a public
or governmental agency.

Moreover, Landlord shall be entitled to be reasonably satisfied that each and
every covenant, condition or obligation imposed upon Tenant by this Lease, and
each and every right, remedy or benefit afforded Landlord by this Lease, is not
impaired or diminished by such assignment or subletting.  Landlord and Tenant
acknowledge that the express standards and provisions set forth in this Lease
dealing with


                                       Page 10
<PAGE>

assignment and subletting, including those set forth in this subparagraph 13.6,
have been freely negotiated and are reasonable at the date hereof taking into
account Tenant's proposed use of the Premises and the nature and quality of the
Premises.  No withholding of consent by Landlord shall give rise to any claim by
Tenant or any proposed assignee or subtenant or entitle Tenant to terminate this
Lease or to any abatement of rent.  Approval of any assignment of Tenant's
interest shall, whether or not expressly so stated, be conditioned upon such
assignee assuming, in writing, all obligations of Tenant hereunder.  In the
event Landlord withholds its consent to an assignment or subletting proposed by
Tenant and Tenant believes such withholding is unreasonable, Tenant may submit
such matter to binding arbitration in accordance with subparagraph 13.9 below.

        13.7    All exterior sign rights contained in this Lease are personal to
Tenant.  Consent by Landlord to any assignment or subletting shall not include
consent to the assignment or transfer of any such rights with respect to the
Premises or any other special privileges or extra services granted to Tenant by
this Lease, any addendum or amendment hereto or any letter agreement.  All such
rights, privileges and extra services shall terminate upon such subletting or
assignment unless Landlord specifically grants the same, in writing, to such
assignee or subtenant.

        13.8    The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation hereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or shall
operate as an assignment to Landlord of such subleases or subtenancies.  If
Tenant is a corporation which is not required under the Securities Exchange Act
of 1934 to file periodic information reports with the Securities and Exchange
Commission, or is an unincorporated association or partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of twenty-five percent
(25%) shall be deemed and assignment within the meaning and provisions of this
Paragraph 13.  Tenant agrees to reimburse Landlord not less than $500.00 for
each proposed transfer, for Landlord's administrative time and reasonable costs
and attorneys' fees incurred in connection with the processing and documentation
of


                                       Page 11
<PAGE>

any such requested assignment, subletting, transfer, change of ownership or
hypothecation of this Lease or Tenant's interest in and to the Premises or any
portion thereof.

        13.9    For purposes of this Lease, an assignment or sublease shall
include the merger or consolidation of Tenant.  Landlord's consent to such,
merger or consolidation shall not be required where (i) the
transferee/successor-in-interest to Tenant's rights under this Lease has assumed
Tenant's obligations hereunder in writing, (ii) the
transferee/successor-in-interest has provided written notice to Landlord of such
merger or consolidation, and (iii) the shareholders' equity of such
transferee/successor-in-interest immediately after such merger or consolidation
is equal to or greater than the lesser of (y) Tenant's shareholders' equity as
of March 31, 1998 or (z) Tenant's shareholders' equity on the day immediately
preceding such merger or consolidation.

        13.10   In the event Tenant believes that Landlord's refusal to consent
to an assignment or subletting is unreasonable, Tenant may submit the matter to
binding arbitration before a single arbitrator appointed by Judicial Arbitration
and Mediation Services (J.A.M.S.).  The request for arbitration shall be
submitted by Tenant in writing to J.A.M.S. no later than ten (10) business days
after delivery of Landlord's written notice to Tenant of its refusal to consent.
Tenant's notice to J.A.M.S. shall be sent concurrently to Landlord.  Landlord
and Tenant may each supply written briefs to the arbitrator and the other party
within ten (10) days after receipt of written notice of the appointment of the
arbitrator by J.A.M.S.  Landlord and Tenant may also deliver written reply
briefs to the arbitrator and the other party within five (5) days after receipt
of the other party's brief.  The arbitrator shall render his/her decision, in
writing, as soon as reasonably possible after the last day on which the parties
can submit reply briefs.  The cost of the arbitrator shall be shared equally by
Landlord and Tenant.

14.     HOLD HARMLESS.

        14.1    Except for Landlord's gross negligence or willful misconduct,
Tenant shall indemnify, protect, defend and hold harmless the Premises, Landlord
and its employees and agents from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultant's fees,
expenses and/or liabilities arising out of, involving or in connection with, the
use and/or occupancy of


                                       Page 12
<PAGE>

the Premises by Tenant and/or Tenant's breach of the terms of this Lease.  If
any action or proceeding is brought against Landlord by reason of any of the
foregoing matters, Tenant shall, upon notice, defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord and Landlord shall
cooperate with Tenant in such defense.  Landlord need not have first paid any
such claim in order to be defended or indemnified.

        14.2    Landlord or its agents shall not be liable for any damage to
property entrusted to employees of Landlord, nor for loss or damage to any
property by theft or otherwise, nor for any injury to or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Premises
(including improvements which comprise a part of the Premises), or from the
pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place, resulting from dampness or any other cause
whatsoever, unless caused by or due to the gross negligence or willful
misconduct of Landlord, its agents, servants or employees.  Landlord or its
agents shall not be liable to Tenant for interference with the light or other
incorporeal hereditaments, loss of business by Tenant.  Landlord or its agents
shall not be liable to Tenant for any damages caused by the act or neglect of
any other tenant in the Building.  Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Premises or of defects therein or in the
fixtures or equipment.

        14.3    Except for Tenant's negligence or willful misconduct, Landlord
shall indemnify, protect, defend and hold harmless Tenant and its agents and
employees from and against any and all claims, damages, liens, judgments,
penalties, attorneys' and consultant's fees, expenses and/or liabilities arising
out of, involving or in connection with the gross negligence or willful
misconduct of Landlord, its employees and agents in, on or about the Premises
and/or Landlord's breach of the terms of this Lease.

15.     SUBROGATION.  Landlord and Tenant each hereby waive any and all rights
of recovery against the other, and (to the extent such parties have waived
rights of recovery as to Landlord or Tenant, as the case may be) against any
other tenant or occupant of the Building and against the officers, employees,
agents, representatives, customers and business visitors of such other party and
of such other tenant or


                                       Page 13
<PAGE>

occupant of the Building for loss of, or damage to, such waiving party or its
property or the property of others under its control arising from any cause
insured against under any policy of property insurance required to be carried by
such waiving party pursuant to the provisions of this Lease (or any other policy
of insurance carried by such waiving party in lieu thereof) at the time of such
loss or damage.  Landlord and Tenant shall, upon obtaining the policies of
insurance which they are required to maintain under this Lease, give notice to
their respective insurance carrier(s) that the foregoing mutual waiver of
subrogation is contained in this Lease.

16.     LIABILITY INSURANCE.

        16.1    At all times during the Term, Tenant shall maintain in effect
policies of fire insurance covering:  (i) all leasehold improvements (including
any alterations, additions or improvements as may be made by Tenant pursuant to
provisions of Article 10 hereof) in which Tenant may have an insurable interest,
and (ii) trade fixtures, merchandise and other personal property which from time
to time are in, on or upon the Premises, in an amount not less than one hundred
percent (100%) of their actual replacement cost from time to time during the
term of this Lease, providing protection against any peril included within the
classification "All-Risk".  The proceeds of such insurance shall be used for the
repair or replacement of the property so insured.  Upon termination of this
Lease following a casualty as set forth herein, the proceeds under subpart (i)
above shall be paid to Landlord and, the proceeds under subpart (ii) above shall
be paid to Tenant.

        16.2    Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force comprehensive general liability
insurance for bodily injury and property damage adequate to protect Landlord
against liability for injury to or death of any person arising in connection
with the use, operation or condition of the premises or construction of
improvements thereon.  Such insurance at all times shall be in an amount of not
less than a combined single limit of Two Million Dollars ($2,000,000.00),
insuring against any and all liability of the insured with respect to the
Premises or arising out of the use or occupancy thereof.


                                       Page 14
<PAGE>

        16.3    Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force worker's compensation coverage as
required by law together with employees' liability coverage.

        16.4    If required by Landlord, Tenant shall, at all times during the
term hereof and at its own cost and expense, procure and continue in force
business interruption and/or loss of income insurance in amounts satisfactory to
Landlord.

        16.5    In no event shall the then limits of any policy be considered as
limiting the liability of Tenant under this Lease.

        16.6    All insurance required to be carried by Tenant hereunder shall
be issued by responsible insurance companies, qualified to do business in the
State of California, rated A + XII or better in the current Bests' Insurance
Guide.  Each insurance policy required to be maintained by Tenant hereunder
pursuant to subparagraphs 16.1 and 16.2 shall name Landlord, its officers,
agents, and employees, and at Landlord's request any mortgagee of Landlord, as
additional insureds, as their respective interests may appear, and copies of all
policies or certificates evidencing the existence and amounts of such insurance
shall be delivered to Landlord by Tenant prior to Tenant's occupancy of the
Premises.  No such policy shall be cancelable or materially reduced except after
thirty (30) days prior written notice to Landlord.  Tenant shall furnish
Landlord with renewals or "binders" of any such policy at least ten (10) days
prior to the expiration thereof.  Tenant agrees that if Tenant does not take out
and maintain such insurance, Landlord may (but shall not be required to), after
fifteen (15) days notice to Tenant, procure said insurance on Tenant's behalf
and charge the Tenant the premium, payable upon demand.  Tenant shall have the
right to provide such insurance coverage pursuant to blanket policies obtained
by the Tenant provided such blanket policies expressly afford coverage to the
Premises and to Tenant as required by this Lease.

        16.7    [INTENTIONALLY DELETED.]

        16.8    At all times during the Term, Landlord shall maintain in effect
a policy or policies of property insurance covering the building improvements at
the Premises in an amount not less than the


                                       Page 15
<PAGE>

replacement cost thereof, providing protection against any peril included within
the classification "All Risk," excluding coverage for flood or earthquake
(unless Landlord in its sole discretion elects to obtain endorsements for flood
or earthquake).

        16.9    [INTENTIONALLY DELETED.]

17.     SERVICES AND UTILITIES.  Landlord shall pay for all water, sewer, gas,
heat, electrical and trash disposal services supplied to the Premises, together
with any taxes thereon.  Tenant shall be responsible and pay for any telephone,
cable or other communication services supplied to the Premises.

18.     PROPERTY TAXES.

        18.1    Tenant shall be liable for, and shall pay thirty (30) days
before delinquency, all taxes, levies and assessments levied against any
personal property or trade fixtures placed by Tenant in or about the Premises,
and, when possible, Tenant shall cause such personal property and trade fixtures
to be assessed and billed separately from the Premises.  If any such taxes,
levies and assessments on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property, or if the assessed value of the
Premises is increased by the inclusion therein of a value placed upon such
personal property or trade fixtures of Tenant, and if Landlord pays the taxes,
levies and assessments based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof, but only under
proper protest if requested by Tenant, Tenant shall repay to Landlord upon
demand, as additional rent, the taxes, levies and assessments so levied against
Landlord, or the proportion of such taxes, levies and assessments resulting from
such increase in the assessment, together with interest thereon from the date of
payment by Landlord to the date of reimbursement by Tenant at the rate of ten
percent (10%) per year.  Provided, however, that in any such event, Tenant shall
have the right, in the name of Landlord and with Landlord's full cooperation but
without any cost to Landlord, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes, levies and assessments so
paid under protest, any amount so recovered to belong to Tenant.


                                       Page 16
<PAGE>

        18.2    If the tenant improvements in the Premises, installed and/or
paid for by Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which tenant improvements conforming to
Landlord's "building standard" for the Premises are assessed, then the real
property taxes and assessments levied against Landlord or the Premises by reason
of such excess assessed valuation shall be deemed to be taxes levied against
personal property of Tenant and shall be governed by the provisions of
subparagraph 18.1 above.  If the records of the County Assessor are available
and sufficiently detailed to serve as a basis for determining whether said
tenant improvements are assessed at a higher valuation than Landlord's "building
standard', such records shall be binding on both Landlord and Tenant; otherwise
the actual cost of construction shall be the basis for such determination.

19.     RULES AND REGULATIONS.  Tenant agrees to abide by all rules and
regulations of the Building and the Premises imposed by Landlord as set forth in
EXHIBIT "B" attached hereto, as the same may be reasonably changed from time to
time by Landlord upon reasonable notice to Tenant.  Any such change shall be
effective upon delivery of a copy thereof to Tenant.  These rules and
regulations are imposed for the cleanliness, good appearance, proper
maintenance, good order and reasonable use of the Premises, and as may be
necessary for the enjoyment of the Premises and the Former Premises by all
tenants and their clients, customers and employees.

20.     HOLDING OVER.  If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.
Any holding over without the express written consent obtained from Landlord by
Tenant, shall not constitute a renewal or extension hereof or give Tenant any
rights under this Lease.  If Tenant shall hold over without the express written
consent of Landlord, Landlord may, at its option, treat Tenant as a tenant at
sufferance only and subject to all of the terms and conditions herein contained,
except that the monthly rental shall be one-hundred fifty percent (150%) of the
Monthly Rent applicable at the date of expiration plus all other


                                       Page 17
<PAGE>

charges payable hereunder, and upon all the terms hereof applicable to a month
to month tenancy, or at the then currently scheduled rent for comparable space
in the Building without regard to any tenant concessions, whichever is greater.
If Tenant fails to surrender the Premises upon the expiration of this Lease,
Tenant shall indemnify and hold Landlord harmless from all loss or liability,
including without limitation, any claims made by any succeeding tenant or by a
purchaser of the Premises founded on or resulting from such failure to
surrender.  Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a holdover hereunder or result in
a renewal of this Lease.

21.     ENTRY BY LANDLORD.  Landlord reserves, and shall at reasonable times,
upon twenty-four (24) hours prior notice (except in the case of an emergency
when prior notice will not be required), have the right to enter the Premises,
inspect the same, provide any and all services which are to be provided by
Landlord to Tenant hereunder, to submit said Premises to prospective purchasers
or tenants, to post notices of non-responsibility, to post "for sale" and "for
rent" signs, and to alter, improve or repair the Premises and any portion of the
improvements at the Building that Landlord may deem necessary or desirable and
may for that purpose erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed, without
abatement of rent so long as access to and use of the Premises shall not be
blocked or prevented thereby, and further providing that the business of Tenant
shall not be interfered with unreasonably.  So long as access to and use of the
Premises is not blocked or prevented by Landlord's actions contemplated by the
immediately preceding sentence, Tenant shall have no claim for damages or for
any injury or inconvenience to or interference with Tenant's business occasioned
thereby.  For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults, safes and files, and Landlord shall have
the right to use any and all means which Landlord may deem proper to open said
doors in an emergency, in order to obtain entry to the Premises, without
liability to Tenant except for any failure to exercise due care for Tenant's
property.  Any entry to the Premises obtained by Landlord by any of said means,
or otherwise, shall not under any circumstances be construed


                                       Page 18
<PAGE>

or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from the Premises or any portion thereof.

22.     RECONSTRUCTION.

        22.1    In the event the Premises are damaged by any peril:

                (a)     In the event of total destruction of the Premises, this
Lease shall terminate effective as of the date of such destruction.

                (b)     In the event of partial destruction of the Premises,
Landlord or Tenant on written notice to the other given within thirty (30) days
of such partial destruction, may terminate this Lease.  If neither Landlord nor
Tenant so elects to terminate, Landlord shall be responsible for repairing such
damage and restoring the Premises.

                (c)     As used herein, a total destruction of the Premises
shall have occurred where (a) the repair or restoration thereof, in Landlord's
opinion, cannot be completed within one hundred eighty (180) days of
commencement of repair or restoration; (b) the estimated cost thereof exceeds
the insurance proceeds available for repair or restoration plus any amount which
Tenant is obligated or elects to pay for such repair or restoration; (c) the
estimated cost of repair or restoration of the Premises exceeds fifty percent
(50%) of the full replacement cost of the Premises; or (d) the Premises cannot
be restored except in a substantially different structural or architectural form
than existed before the damage and destruction.  Any other destruction of the
Premises shall be deemed a partial destruction.  In the event of a partial
destruction and either Landlord or Tenant elects to terminate this Lease, this
Lease shall expire, and all interest of Tenant in the Premises shall terminate,
on the date specified in the notice and rent shall be paid up to the date of
termination.  Landlord shall refund to Tenant the rent theretofore paid for any
period of time subsequent to such date of termination.

                (d)     Notwithstanding anything herein to the contrary, any
damage to the Premises not affecting more than ten percent (10%) of the floor
area of the Premises may be repaired by Landlord at its


                                       Page 19
<PAGE>

election and, in such event, Landlord shall diligently pursue such repair to
completion and neither Landlord nor Tenant shall have the right to terminate
this Lease.

        22.2    Upon any termination of this Lease under any of the provisions
of this Paragraph 22, the parties shall be released thereby, without further
obligation to the other, from the date possession of the Premises is surrendered
to the Landlord, except for items which have theretofore accrued and are then
unpaid.

        22.3    Unless the damage or destruction is caused by the gross
negligence of Tenant or its employees or agents, or unless the Premises were
unusable for a period of less than five (5) days, if the Premises are rendered
totally or partially untenantable, Monthly Rent shall abate during the period of
reconstruction in the same proportion to the total Monthly Rent as the portion
of the Premises rendered untenantable bears to the entire Premises.  In no event
shall Tenant be entitled to any compensation or damages for loss of use of the
whole or any part of the Premises or for any inconvenience occasioned by any
such destruction, rebuilding or restoration of the Premises or access thereto.
Tenant waives the provisions of California Civil Code Sections 1932(2) and
1933(4) and any present and future laws and case decisions to the same effect.

        22.4    Notwithstanding any destruction or damage to the Premises,
including the parking facilities, Tenant shall not be released from any of its
obligations under this Lease except to the extent and upon the conditions
expressly stated in this Paragraph 22.

        22.5    [INTENTIONALLY DELETED.]

        22.6    It is hereby acknowledged that if Landlord is obligated to, or
elects to, repair or restore the Premises as herein provided, Landlord shall be
obligated to make repairs or restoration only of those portions of the Premises
which were originally provided at Landlord's expense, and the repair and
restoration of items not provided at Landlord's expense shall be the obligation
of Tenant.  Tenant understands that Landlord will not carry insurance of any
kind on Tenant's furniture, furnishings, fixtures, equipment or other personal
property, and that Landlord shall not be obligated to repair any damage thereto
or replace the same.


                                       Page 20
<PAGE>

        22.7    [INTENTIONALLY DELETED.]

23.     DEFAULT.  The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:

        23.1    Any failure by Tenant to pay the rent or to make any other
payment required to be made by Tenant hereunder at the time specified for
payment.  Landlord shall give Tenant three (3) days' written notice of default,
which notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 ET SEQ. of the California Code of Civil Procedure, as
amended.

        23.2    The abandonment or vacation of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to, any absence by
Tenant from the Premises for thirty (30) days or longer except where Tenant has
advised Landlord in writing that Tenant has not abandoned the Premises and
Tenant continues during such absence to perform all of its obligations under
this Lease.

        23.3    Any failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for thirty (30) days (except where a different period of time is
specified in this Lease) after written notice by Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 ET SEQ. of the California Code of Civil
Procedure, as amended.  If the nature of such default is such that the same
cannot reasonably be cured within such thirty (30) day period Tenant shall not
be deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion.

        23.4    Tenant makes or has made, or furnishes or has furnished, any
warranty, representation or statement to Landlord in connection with this Lease,
or any other agreement to which Tenant and Landlord are parties, which is or was
false or misleading in any material respect when made or furnished.

        23.5    [INTENTIONALLY DELETED.]

        23.6    The making by Tenant of any general assignment for the benefit
of creditors; the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or of a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant,


                                       Page 21
<PAGE>

the same is dismissed within sixty (60) days); the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days; the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within sixty (60) days; or Tenant's convening of a meeting of its creditors or
any class thereof for the purpose of effecting a moratorium upon or composition
of its debts.

24.     REMEDIES FOR DEFAULT.

        24.1    In the event of any default by Tenant pursuant to Paragraph 23
above, then in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate.  In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:

                (a)     The worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus

                (b)     The worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss which Tenant proves reasonably
could have been avoided; plus

                (c)     The worth at the time of award of the amount by which
the unpaid rent for the balance of the term of this Lease after the time of
award exceeds the amount of such rental loss that Tenant proves reasonably could
be avoided; plus

                (d)     Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including without limitation the unamortized balance
of any tenant improvement allowance provided to Tenant by Landlord or of any
tenant improvements constructed or paid for by Landlord at the commencement of
the term hereof, which amount shall be deemed additional rent automatically due
and payable hereunder upon the occurrence of an event of


                                       Page 22
<PAGE>

default by Tenant and shall be recoverable as rent in any unlawful detainer or
other action arising out of or pertaining to such default, whether or not
specified in any notice given by Landlord as a condition or prior to the
commencement of any such action; and

                (e)     At Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable California law.

        24.2    As used in subparagraphs 24.1(a) and (b) above, the "worth at
the time of award" is computed by allowing interest at the rate of ten percent
(10%) per annum.  As used in subparagraph 24.1(c) above, the "worth at the time
of award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award plus one percent.

        24.3    In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.

        24.4    In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided above
or shall take possession of the Premises pursuant to legal proceedings or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in this Paragraph 24, Landlord may from time to
time, without terminating this Lease, either recover all rental as it becomes
due or relet the Premises, or any part thereof, for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord in
its sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises.  Election by Landlord to proceed pursuant to this
subparagraph shall be made upon written notice to Tenant and shall be deemed an
election of the remedy described in California Civil Code Section 1951.4 and,
unless Landlord relets the Premises, Tenant shall have the right to sublet or
assign subject to the prior written consent of Landlord.  Such consent shall not
be unreasonably withheld and shall be subject to all of the terms and provisions
of Paragraph 13.


                                       Page 23
<PAGE>

        24.5    In the event that Landlord shall elect to so relet, then rentals
received by Landlord from such reletting shall be applied: first, to the payment
of any indebtedness other than rent due hereunder from Tenant to Landlord;
second, to the payment of any reasonable cost of such reletting; third, to the
payment of the cost of any repairs to the Premises necessitated by Tenant's use;
fourth, to the payment of rent due and unpaid hereunder; and the residue if any,
shall be held by Landlord and applied in payment of future amounts as the same
may become due and payable hereunder.  Should the rent for such reletting,
during any month for which the payment of rent is required hereunder, be less
than the rent payable during that month by Tenant hereunder, then Tenant shall
pay such deficiency to Landlord immediately upon demand therefor by Landlord.
Such deficiency shall be calculated and paid monthly.  Tenant shall also pay to
Landlord as soon as ascertained, any reasonable costs and expenses incurred by
Landlord in such reletting or in making such repairs not covered by the rentals
received from such reletting.

        24.6    No re-entry or taking possession of the Premises by Landlord
pursuant to this Paragraph 24 shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.

        24.7    In any action for unlawful detainer commenced by Landlord
against Tenant by reason of any default hereunder, the reasonable rental value
of the Premises for the period of the unlawful detainer shall be the amount of
rent reserved in this Lease for such period.  The rights and remedies reserved
to Landlord herein, including those not specifically described, shall be
cumulative and, except as otherwise provided by California statutory law in
effect at the time, Landlord may pursue any or all of such rights and remedies,
at the same time or otherwise.

        24.8    All covenants and agreements to be performed by Tenant under
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of rent.  If Tenant fails to pay any sum of money, other
than rent, required to be paid by it or fails to perform any other act on its


                                       Page 24
<PAGE>

part to be performed, and such failure continues beyond any applicable grace
period set forth in the Paragraph providing for such obligation (or if no grace
period is set forth in such Paragraph, then the applicable grace period pursuant
to Paragraph 23), then in addition to any other remedies provided herein
Landlord may, but shall not be obligated so to do, without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant's part.  Landlord's election to make any such payment or
perform any such act on Tenant's part shall not give rise to any responsibility
of Landlord to continue making the same or similar payments or performing the
same or similar acts.  Tenant shall, within ten (10) days after written demand
therefor by Landlord, reimburse Landlord for all sums so paid by Landlord and
all necessary incidental costs, together with interest thereon at the rate of
ten percent (10%) per annum, accruing from the date of such payment by Landlord:
and Landlord shall have the same rights and remedies in the event of failure by
Tenant to pay such amounts as Landlord would have in the event of a default by
Tenant in payment of rent.

25.     LANDLORD'S LIABILITY.  The liability of any successor-in-interest to
Landlord under this Lease ("Successor Landlord") shall be limited to the
Successor Landlord's estate in the Premises.

26.     EMINENT DOMAIN.  If the whole of the Premises shall be taken, or such
part thereof shall be taken as shall substantially interfere with Tenant's use
and occupancy of the balance thereof, under power of eminent domain, or sold,
transferred, or conveyed in lieu thereof, either Tenant or Landlord may
terminate this Lease as of the date of such condemnation or as of the date
possession is taken by the condemning authority, whichever date occurs later.
If any part of the Premises shall be so taken, sold, transferred or conveyed in
lieu thereof, which does not substantially interfere with Tenant's use and
occupancy of the balance thereof, this Lease shall not terminate but Landlord's
and Tenant's rights shall be as set forth below.  No award for any partial or
entire taking shall be apportioned, and Tenant hereby assigns to Landlord any
award which may be made in such taking or condemnation, together with any and
all rights of Tenant now or hereafter arising in or to the same or any part
thereof; provided, however, that nothing contained herein shall be deemed to
give Landlord any interest in or require Tenant to assign to Landlord any award
made to Tenant for the taking of personal property and fixtures belonging to
Tenant


                                       Page 25
<PAGE>

and removable by Tenant at the expiration of the term hereof, as provided
hereunder, or for the interruption of, or damage to Tenant's business or for
relocation expenses recovered therefor, against the condemning authority.  In
the event of a partial taking, or a sale, transfer, or conveyance in lieu
thereof, which does not result in a termination of this Lease, Landlord shall,
to the extent of any funds received from the condemning authority for repair or
restoration, restore the Premises substantially to their condition prior to such
partial taking, and thereafter Monthly Rent shall be abated in the proportion
which the square footage of the part of the Premises so made unusable bears to
the amount of area rented immediately prior to the taking.  No taking for a
period of less than thirty (30) days of all or a part of the Premises, including
parking facilities, shall give Tenant any right to terminate this Lease, but
Tenant shall receive an abatement of Monthly Rent.

27.     HAZARDOUS MATERIALS.

        27.1    Without limiting the generality of Paragraphs 8 and 9 of this
Lease, Tenant covenants and agrees that Tenant, its employees, agents and other
third parties entering upon the Premises at the request or invitation of Tenant
shall not bring into, maintain upon, generate, produce, use, store, dispose of
or release or discharge in or about the Premises any hazardous or toxic
substances or hazardous waste, as more fully defined below (collectively,
"hazardous materials").  The foregoing covenant shall not extend to substances
typically found or used in applications of the type permitted by this Lease so
long as:  (a) such substances are maintained only in such quantities as are
reasonably necessary for Tenant's operations in the Premises; (b) such
substances and all equipment which generates such substances are used strictly
in accordance with the manufacturer's instructions therefor; (c) such substances
are not disposed of in or about the Premises in a manner which would constitute
a release or discharge thereof; and (d) all such substances and all equipment
which generates such substances are removed from the Premises by Tenant upon the
expiration or earlier termination of this Lease.  Any introduction, use,
storage, generation, maintenance, production, disposal, release or discharge by
Tenant of hazardous materials in or about the Project as is permitted pursuant
to this Paragraph shall be carried out in


                                       Page 26
<PAGE>

compliance with all applicable federal, state and local laws, ordinances, rules
and regulations.  Moreover, no hazardous waste resulting from any operations by
Tenant shall be stored or maintained by Tenant in or about the Premises for more
than thirty (30) days prior to removal by Tenant.  In no event shall Tenant
install any chemical storage tank in or about the Premises.  Tenant shall,
annually within thirty (30) days after Tenant's receipt of Landlord's written
request therefor, provide to Landlord a written list identifying any hazardous
materials then maintained by Tenant in the Premises, the use of each such
hazardous material and the approximate quantity of each such hazardous material
so maintained by Tenant, together with written certification by Tenant stating,
in substance, that neither Tenant nor any person for whom Tenant is responsible
has released or discharged any hazardous materials in or about the Premises.

        27.2    In the event that Tenant proposes to conduct any use, or to
operate or store any equipment, which will or may utilize or generate a
hazardous material other than as specified in subparagraph 27.1, Tenant shall
first submit in writing such use, storage or equipment proposal to Landlord for
approval.  No approval by Landlord shall relieve Tenant of any obligation of
Tenant pursuant to this Paragraph, including the removal, clean-up and
indemnification obligations imposed upon Tenant by this Paragraph.  Tenant
shall, within five (5) days after receipt thereof, furnish to Landlord copies of
all notices or other communications received by Tenant with respect to any
actual or alleged release or discharge of any hazardous material in or about the
Premises and shall, whether or not Tenant receives any such notice or
communication, notify Landlord in writing of any discharge or release of
hazardous material in or about the Premises.

        27.3    Upon any violation of the foregoing covenants, Tenant shall be
obligated at Tenant's sole cost, to clean-up and remove from the Premises all
hazardous materials introduced into the Premises by Tenant or any third party
for whom Tenant is responsible.  Such clean-up and removal shall include all
testing and investigation required by any governmental authorities having
jurisdiction, and preparation and implementation of any remedial action plan
required by any governmental authorities having jurisdiction.  All such clean-up
and removal activities of Tenant shall, in each instance, be conducted to the
reasonable satisfaction of Landlord and all governmental authorities having
jurisdiction.  Landlord's right of entry



                                       Page 27
<PAGE>

pursuant to Paragraph 21 shall include the right to enter and inspect the
Premises for violations of Tenant's covenants herein.

        27.4    Tenant shall indemnify, defend (with counsel approved by
Landlord) and hold harmless Landlord, its partners, directors, officers,
employees, agents, lenders and attorneys and their respective successors and
assigns from and against any and all claims, liabilities, losses, actions, costs
and expenses (including attorneys' fees and costs of defense) incurred by such
indemnified persons, or any of them, as the result of:  (i) the introduction
into or about the Premises any hazardous materials by Tenant, its employees,
agents or contractors; (ii) the usage, storage, maintenance, generation,
production, disposal, release or discharge of hazardous materials in or about
the Premises by Tenant its employees, agents or contractors; (iii) any injury to
or death of persons or damage to or destruction of property resulting from the
use, introduction, maintenance, production, storage, generation, disposal,
disposition, release or discharge of hazardous materials in or about the
Premises by Tenant its employees, agents or contractors; and/or (iv) any failure
of Tenant its employees, agents or contractors to observe the covenants of this
Paragraph 27.  Payment shall not be a condition precedent to enforcement of the
foregoing indemnification provision.  If any claim for indemnification is made
by Landlord hereunder, or if Tenant is required hereunder to perform any
remedial activity pursuant to this Paragraph, Landlord agrees to grant to Tenant
such access to portions of the Project as is reasonably necessary for the
purpose of effecting a remediation of the occurrence giving rise to such claim
for indemnification or duty of remediation.

        27.5    In the event that Tenant is required by any governmental
authority to maintain any hazardous materials license or permit in connection
with any use conducted by Tenant or any equipment operated by Tenant in, on or
about the Premises, copies of such license or permit, each renewal or revocation
thereof, and any communication relating to suspension, renewal or revocation
thereof shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant.  Compliance by Tenant with the provisions of this paragraph
and the second paragraph of this Paragraph shall not relieve Tenant of any other
obligation of Tenant pursuant to this Paragraph.


                                       Page 28
<PAGE>

        27.6    Upon any violation of the foregoing covenants Landlord shall be
entitled to exercise all remedies available to a landlord against a defaulting
tenant, including, but not limited to these set forth in Paragraph 24.  Without
limiting the generality of the foregoing, Tenant expressly agrees that upon any
such violation Landlord may, at its option:  (i) immediately terminate this
Lease, or (ii) continue this Lease in effect until compliance by Tenant with its
clean-up and removal covenant notwithstanding any earlier expiration date of the
term of this Lease.  No action by Landlord hereunder shall impair the
obligations of Tenant pursuant to this Paragraph.

        27.7    As used in this Paragraph 27, the term "hazardous materials"
shall mean any hazardous materials, hazardous wastes or hazardous or toxic
substances as defined by Environmental Laws.  As used in this Paragraph 27,
"Environmental Laws" means the Recourse Conservation and Liability Act, and
Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act, the Safe Drinking Water Act, the Clean Air Act, the toxic
Substances Control Act, the Atomic Energy Act, the Endangered Species Act,
California Health and Safety Code Section 25316, and any similar laws affecting
the Premises or the use thereof, and any amendments to any of the foregoing.

        27.8    Landlord represents and warrants that, as of the Commencement
Date, the Premises are in compliance with the applicable environmental laws,
rules, regulations, directives or orders of any governmental authority relating
to the protection of human health or the environment, relating to the injury or
damage to, or restoration or replacement of, natural resources, or relating to
land reclamation, including, but not limited to, to the extent applicable,
requirements under Environmental Laws.  To Landlord's knowledge as of the
Commencement Date, there has not been any notice, written or oral, provided to
Landlord by any governmental agency or authority, or by any previous tenant or
owner, or any other party of any violation, alleging violation, of, or
investigation relating to, any Environmental Law.  To Landlord's knowledge as of
the Commencement Date, there is no legal, administrative, investigatory or other
proceedings, pending or threatened against Landlord which relate to any
violation of Environmental Law.  These representations and warranties, and the
indemnification obligations set forth below, shall survive the termination or
expiration of the Lease until the lapse of all applicable statutes of
limitations, if 


                                       Page 29
<PAGE>

any.  Landlord hereby agrees to indemnify and hold Tenant (including its 
officers, directors, employees, agents, successors and assigns) harmless from 
any damages, losses, costs or expenses, suffered or paid as a result of any 
and all claims, damages, suits, causes of action, proceedings, judgments, 
liabilities, penalties, interest, losses, damages, costs or expenses, 
including reasonable attorney's fees incurred in litigation or otherwise, 
assessed, incurred or sustained by or against Tenant with respect to or 
arising out of the failure or breach of any representation or warranty 
contained herein and made by Landlord with respect to Environmental Laws or 
hazardous materials, or the use, production, storage, maintenance, 
generation, disposal, release or discharge of any hazardous materials into 
the environment from or at the Premises or from materials which Landlord or 
any prior tenant or owner of the Premises disposed of or arranged for the 
disposal of offsite, or any adverse effect or potential adverse effect on 
humans or the environment deriving therefrom.

        27.9    Attached to this Lease at EXHIBIT "D" is a true copy of
Environmental Audit Report for the Premises prepared by Ralph Stone and Company,
Inc.

        27.10   Tenant acknowledges that Landlord has advised Tenant that the
Building contains asbestos containing materials ("ACMs").  If Tenant undertakes
any alterations, additions, or improvements to the Premises, Tenant shall, in
addition to complying with the other provisions of this Lease, undertake the
alterations, additions, or improvements in a manner that avoids disturbing any
ACMs present in the Building.  If ACMs are likely to be disturbed in the course
of such work, Tenant shall encapsulate or remove the ACMs in accordance with an
approved asbestos-removal plan and otherwise in accordance with all applicable
Environmental Laws, including giving all notices required by California Health
and Safety Code Sections 25915-25919.7.

28.     OFFSET STATEMENT.  Tenant shall at any time and from time to time upon
not less ten (10) days' prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing, (a) certifying that this Lease
is unmodified and in full force and effect (or, if modified stating the nature
of such modification and certifying that this Lease as so modified, is in full
force and effect) and the date to which the rental and other charges are paid in
advance, if any, and (b) acknowledging that there


                                       Page 30
<PAGE>

are not, to Tenant's knowledge, any uncured defaults if any are claimed.  Any
such statement may be relied upon by any prospective purchaser or encumbrancer
of all or any portion of the real property of which the Premises are a part.  In
the event Tenant does not provide Landlord with an offset statement as required
in this paragraph within the ten (10) day period mentioned therein, Tenant shall
be deemed to have acknowledged all of the matters set forth herein.

29.     TRAFFIC AND ENERGY MANAGEMENT.

        29.1    Tenant agrees to cooperate and use reasonable efforts to
participate in governmentally mandated traffic management programs generally
applicable to businesses located in Burbank, California or to the Premises.
Neither this Paragraph nor any other provision in this Lease, however, is
intended to or shall create any rights or benefits in any other person, firm,
company, governmental entity or the public.

        29.2    Tenant agrees to cooperate and use reasonable efforts to comply
with any and all mandatory guidelines or controls imposed upon either Landlord
or Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.

        29.3    [INTENTIONALLY DELETED.]

30.     [INTENTIONALLY DELETED.]

31.     COMMON FACILITIES; PARKING.  Tenant shall have the non-exclusive right,
in common with Landlord and other tenants and occupants of the Building and
their employees, agents and business visitors, to the use of all common
facilities which constitute a part of the Premises, subject to such reasonable,
nondiscriminatory rules and regulations relating to such use as Landlord may
from time to time establish.  Common facilities shall be identified by Landlord
in a writing to Tenant upon creation of any Former Premises and may include any
building lobby, elevators, restrooms, stairways and stairwells, elevator lobbies
and common entrances, corridors, passageways and serviceways which are not
located within the Premises of Tenant or another tenant of the Former Premises.
Common facilities also include landscaping, hardscaping and any fountains
adjacent to the Building, any parking facilities serving the


                                       Page 31
<PAGE>

Building (the "Parking Facilities"), all sidewalks, driveways, vehicle and
pedestrian entrances and accessways, loading docks, truck tunnels, truck parking
and truck turn-around areas, vehicle and pedestrian ramps serving the Building,
and any pedestrian walkway connecting the Parking Facilities.  The common
facilities are depicted on EXHIBIT C attached hereto.  Landlord may make
reasonable changes at any time and from time to time to the common facilities,
and no such change shall entitle Tenant to any abatement of rent.  Landlord
shall at all times have the sole and exclusive control of the common facilities.
To the extent that any common facilities located outside of the Premises are
maintained jointly or for the common benefit of Landlord and the owners of
adjacent structures, (i) Tenant's non-exclusive right of use of such common
facilities shall be in common with Landlord, other tenants and occupants of and
visitors to the Former Premises and Premises and the owners, tenants, occupants
of and visitors to such other structures.

        Tenant shall keep all common facilities free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operations.  Nothing herein shall affect the right of Landlord at any time to
remove any persons not authorized to use the common facilities or to prevent the
use of such facilities by unauthorized persons.  Landlord reserves the right,
from time to time, to:  (a) make alterations in or additions to the common
facilities, including without limitation, constructing new structures or
changing the location, size, shape and/or number of the driveways, entrances,
parking spaces, parking areas, loading and unloading areas, landscape areas and
walkways; (b) temporarily close any of the common facilities for maintenance or
other purposes as long as reasonable access to the Premises remains available;
(c) designate property to be included in, or eliminate property from, the common
facilities; and (d) use the common facilities while engaged in making
alterations in or additions or repairs to the Premises or Former Premises.

32.     AUTHORITY OF PARTIES.  Each individual executing this Lease on behalf of
Landlord and Tenant represents and warrants that the execution and delivery of
this Lease on behalf of the party for whom such person is executing is duly
authorized, that he or she is authorized to execute and deliver this Lease and
that this Lease is binding upon such party in accordance with its terms.  If
Tenant is a


                                       Page 32
<PAGE>

corporation, Tenant shall, within ten (10) days after execution of this Lease,
deliver to Landlord a certified copy of a resolution of the Board of Directors
of Tenant, or any executive committee thereof, authorizing or ratifying the
execution of this Lease.  Failure of Tenant to provided such resolution shall
not, however, relieve Tenant of its obligations pursuant to this Lease.

33.     GENERAL PROVISIONS.

        33.1    CLAUSES, PLATS AND RIDERS.  Clauses, plats, and riders, if any,
signed by the Landlord and the Tenant and endorsed on or affixed to this Lease
are a part hereof.

        33.2    WAIVER.  No waiver by Landlord of any provision of this Lease or
of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any other
provision.  Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act of Tenant.
No act or thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, unless done
in a writing signed by Landlord.  Tenant's delivery of keys to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises unless done pursuant to a written agreement to such
effect executed by Landlord.  The acceptance of any rent by Landlord following a
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such
breach (other than the failure to pay the particular rent so accepted) or any
other breach unless such waiver is expressly stated in a writing signed by
Landlord.  The acceptance of any payment from a debtor in possession, a trustee,
a receiver or any other person acting on behalf of Tenant or Tenant's estate
shall not waive or cure a default under Paragraph 23.6 or waive the provisions
of Paragraph 13.

        33.3    NOTICES.  All notices and demands which may or are to be
required or permitted to be given by either party to the other hereunder shall
be in writing.  All notices and demands by the Landlord to the Tenant shall be
personally served on Tenant at the Premises or shall be sent by United States
certified mail, return receipt requested, postage prepaid, addressed to the
Tenant at the Premises, or to


                                       Page 33
<PAGE>

such other place as Tenant may from time to time designate in a notice to the
Landlord.  All notices and demands by the Tenant to the Landlord shall be
personally served on Landlord at the office of the Building or shall be sent by
United States certified mail, return receipt requested, postage prepaid,
addressed to the Landlord in care of John B. Miles, Esq., McDermott, Will &
Emery at 1301 Dove Street, Suite 500, Newport Beach, California 92660, or to
such other person or place as the Landlord may from time to time designate in a
notice to the Tenant.  All notices shall be deemed effective upon receipt.  If
personally delivered, notices shall be deemed received at the time of delivery.
If any notice is sent by mail, the same shall be deemed delivered and received
on the date of receipt, refusal or nondelivery indicated on the return receipt.
Any notice provided for herein may also be sent by facsimile transmission or by
any reputable overnight courier so long as written confirmation of delivery of
such notice is obtained by the sender.

        33.4    [INTENTIONALLY DELETED.]

        33.5    MARGINAL HEADINGS.  The marginal headings and Paragraph titles
to the Paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.

        33.6    TIME.  Time is of the essence of this Lease and of each and all
of its provisions in which performance is a factor.

        33.7    SUCCESSORS AND ASSIGNS.  The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

        33.8    LATE CHARGES.  Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain.  Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said


                                       Page 34
<PAGE>

amount is due, then Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount for the first late payment during any twelve
(12) month period and six percent (6%) of such overdue amount for any other late
payment during such twelve (12) month period.  In addition, any amount not paid
when due shall bear interest at the rate of ten percent (10%) per year from the
due date until paid.  The parties hereby agree that such late charges and
interest represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of the late payment by Tenant.  Acceptance of such late charges
and interest by the Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder regardless of
any indication to the contrary on the check cashed.  In the event that any check
or other payment device for rent, or any other charge hereunder, is returned due
to insufficient funds or any other reason, the foregoing late payment and
interest charges shall apply and Landlord may require all further payments to be
made by money order, cashier's check or in cash.

        33.9    PRIOR AGREEMENTS.  This Lease and the Exhibits hereto contains
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreements or understanding pertaining
to any such matters shall be effective for any purpose.  No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest.  This Lease shall not
be effective or binding on any party until fully executed by both parties
hereto.

        33.10   INABILITY TO PERFORM.  This Lease and the obligations of each
party hereunder shall not be affected or impaired because the other party is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such liability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of such other party.

        33.11   ATTORNEYS' FEES.  In the event of any action or proceeding
brought by either party against the other under this Lease, the prevailing party
shall be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees.  If Landlord is involuntarily made a party
defendant to any litigation


                                       Page 35
<PAGE>

concerning this Lease or the Premises by reason of any act or omission of
Tenant, then Tenant shall hold Landlord harmless from all costs, liabilities,
damages and expenses by reason thereof, including attorneys' fees and all costs
incurred by Landlord in such litigation.

        33.12   SALE OF PREMISES BY LANDLORD.  In the event of any sale of the
Premises or Former Premises, Landlord shall be, and is hereby, entirely freed
and relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission occurring after the consummation of such sale; and the purchaser, at
such sale or any subsequent sale of the Premises or Former Premises shall be
deemed, without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the Landlord
under this Lease arising out of any act, occurrence or omission occurring after
the consummation of such sale.

        33.13   SUBORDINATION, ATTORNMENT.  Without the necessity of any
additional documents being executed by Tenant for the purpose of effecting a
subordination and at the election of Landlord or any mortgagees with a lien on
the Building or ground lessor with respect to Building, this Lease is subject
and subordinate to any and all ground or underlying leases, mortgages or deeds
of trust which may hereafter be executed covering the Premises and the real
property of which it is a part, or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or
to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and
provisions thereof.  Notwithstanding the foregoing, Tenant agrees, within ten
(10) days after Landlord's written request therefor, to (a) execute, acknowledge
and deliver any and all documents or instruments requested by Landlord, or that
are necessary or proper to assure the subordination of this Lease to any such
mortgages, deeds of trust, or leasehold estates, and (b) supply such financial
information concerning Tenant as may be requested by any ground lessor or
lender.  Notwithstanding such subordination, Tenant's quiet enjoyment of the
Premises will not be disturbed so long as Tenant pays rent and observes and
performs all of the provisions of this Lease to be observed and performed by
Tenant.  Notwithstanding anything to the contrary set forth in this Paragraph,


                                       Page 36
<PAGE>

Tenant hereby attorns and agrees to attorn to (at the option of) any person,
firm, or corporation purchasing or otherwise acquiring the building and the real
property of which it is a part, at any sale or other proceeding or pursuant to
the exercise of any other rights, powers, or remedies under such mortgages, or
deeds of trust, or ground or underlying leases, as if such person, firm or
corporation had been named as Landlord herein, provided that such person, firm,
or corporation shall accept the Premises subject to this Lease.  Tenant hereby
appoints Landlord the attorney-in-fact of Tenant, irrevocably, to execute and
deliver any documents provided for herein for and in the name of Tenant; such
power, being coupled with an interest, being irrevocable.  The provisions of
this Paragraph to the contrary notwithstanding, and so long as Tenant is not in
default hereunder, this Lease shall remain in full force and affect for the full
term hereof.

        33.14   NAME.  Tenant shall not use the name of the property of which
the Premises are a part for any purpose other than as an address of the business
to be conducted by the Tenant in the Premises.

        33.15   SEPARABILITY.  Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
affect.

        33.16   CUMULATIVE REMEDIES.  No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

        33.17   CHOICE OF LAW.  This Lease shall be governed by the laws of the
State of California.

        33.18   SIGNS AND AUCTIONS.  Tenant may, at its sole cost and expense,
place its signage on the Premises so long as Tenant has received Landlord's
prior written consent (which consent shall not be unreasonably withheld), has
complied with all applicable laws and has agreed to remove such signage at its
sole cost upon termination of this Lease.  Tenant shall not conduct any auction
on the Premises without Landlord's prior written consent.

        33.19   [INTENTIONALLY DELETED.]

        33.20   NEGOTIATED TRANSACTION.  This Lease has been negotiated at arm's
length.  Accordingly, the provisions of this Lease shall be deemed to have been
drafted by all of the parties and any rule of law


                                       Page 37
<PAGE>

that would require interpretation of this Lease against the party that has
drafted it is not applicable and is waived.

        33.21   [INTENTIONALLY DELETED.]

        33.22   QUITCLAIM OF INTEREST.  At the expiration or earlier termination
of this Lease, Tenant shall execute, acknowledge and deliver to Landlord, within
five (5) days after written demand from Landlord to Tenant, any quitclaim deed
or other document which may be reasonably requested by any reputable title
insurance company to remove this Lease as a matter affecting title to the
Premises on a preliminary title report or title policy issued with respect to
the Premises.

        33.23   [INTENTIONALLY DELETED]

        33.24   SURVIVAL OF INDEMNITIES.  The obligations of the indemnifying
party under each and every indemnification and hold harmless provision in this
Lease shall survive the expiration or earlier termination of this Lease to and
until the last to occur of (A) the last date permitted by law for the bringing
of any claim or action with respect to which indemnification may be claimed by
the indemnified party against the indemnifying party under such provisions, or
(B) the date on which any claim or action for which indemnification may be
claimed under such provision is fully and finally resolved and, if applicable,
any compromise thereof or judgment or award thereon is paid in full by the
indemnifying party and the indemnified party is reimbursed by the indemnifying
party for any amounts paid by the indemnified party in compromise thereof or
upon a judgment or award thereon and in defense of such action or claim,
including reasonable attorneys' fees incurred.  Notwithstanding anything to the
contrary in that certain Asset Purchase Agreement or Secured Indemnity
Agreement, each dated approximately of even date herewith and executed by
Landlord and Tenant, or that certain Deed of Trust, dated approximately of even
date herewith and executed by Landlord, as trustor, in favor of Tenant, as
beneficiary, none of the representations, warranties, or other covenants or
obligations herein are secured by such Deed of Trust.

        33.25   NO REPRESENTATION BY LANDLORD.  In no event shall the review,
approval, inspection or examination by Landlord of any item to be reviewed,
approved, inspected or examined by Landlord under the terms of this Lease be
deemed to be an approval of, or representation or warranty as to, the


                                       Page 38
<PAGE>

adequacy, accuracy, sufficiency or soundness of any such item or the quality or
suitability of such item for its intended use.  Any such review, approval,
inspection or examination by Landlord shall be for the sole purpose of
protecting Landlord's interests in the Premises under this Lease, and no third
parties shall have any rights pursuant thereto.  Notwithstanding anything to the
contrary in that certain Asset Purchase Agreement or Secured Indemnity
Agreement, each dated approximately of even date herewith and executed by
Landlord and Tenant, or that certain Deed of Trust, dated approximately of even
date herewith and executed by Landlord, as trustor, in favor of Tenant, as
beneficiary, none of the representations, warranties, or other covenants or
obligations herein are secured by such Deed of Trust.

34.     BROKERS.  Tenant warrants that it has had no dealings with any real
estate broker or agents in connection with the negotiation of this Lease and it
knows of no real estate broker or agent who is entitled to a commission in
connection with his Lease.

35.     QUIET ENJOYMENT.  Upon the payment by Tenant of Monthly Rent and all
other sums to be paid hereunder by Tenant and the observance and performance of
all covenants, conditions and provisions on Tenant's part to be observed and
performed under this Lease, Tenant shall have quiet possession of the Premises
for the entire Term subject to all of the provisions of this Lease.


                           [SIGNATURES ON FOLLOWING PAGE]


                                       Page 39
<PAGE>

        The parties hereto have executed this Lease at the place and on the
dates specified immediately adjacent to their respective signatures.

                                        ALL POST, INC., a California corporation




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


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



Address                                 Execution Date:               , 1998
        ------------------------                       ---------------
                                                         "Landlord"
- --------------------------------


                                        VDI MEDIA, a California corporation



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




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


Address                                 Execution Date:               , 1998
        ------------------------                       ---------------
                                                        "Tenant"
- --------------------------------


                                       Page 40
<PAGE>

                                     SCHEDULE 1


                          DELINEATION OF PREMISES PORTIONS
<TABLE>
<CAPTION>
        Area                                            Monthly Rent Reduction
        ----                                            ----------------------
        <S>                                             <C>

        Audio                                           $ 9,897.63


        Duplication (including engineering,
              preproduction and shipping)               $19,866.77


        Editing                                         $ 3,038.35


        Vault (including 6,000 sq. ft. at Mariposa)     $23,089.05


        Accounting / HR                                 $ 6,808.20
                                                        ----------

        TOTAL                                           $62,700.00

</TABLE>

- --------------------------------
1.      Any area delineated above, or piece thereof, shall become part of the
        Former Premises if returned to Landlord in accord with paragraph 3 of
        this Lease.

2.      Tenant must return all of any area of the Premises delineated above in
        order to receive a Monthly Rent reduction.  Tenant shall not receive any
        Monthly Rent reduction whatsoever for returning less than all of any
        such area of the Premises.



                                     Schedule 1

<PAGE>

                                     EXHIBIT A


                                PREMISES DESCRIPTION





                                     EXHIBIT A

<PAGE>

                                     EXHIBIT B


                           BUILDING RULES AND REGULATIONS

                [TO BE MUTUALLY AGREED UPON BY TENANT AND LANDLORD,

             SUCH AGREEMENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED]





                                     EXHIBIT B

<PAGE>

                                     EXHIBIT C


                                 COMMON FACILITIES





                                     EXHIBIT C
<PAGE>

                                     EXHIBIT D


                             ENVIRONMENTAL AUDIT REPORT





                                      EXHIBIT D


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