EXHIBIT 10.2


                            MASTER SECURITY AGREEMENT
                   dated as of December 30, 2005 ("Agreement")

        THIS AGREEMENT is between General Electric Capital Corporation (together
with  its  successors  and  assigns,  if any,  "Secured  Party")  and  Point.360
("Debtor").  Secured  Party has an office at 2400 E.  Katella  Avenue Suite 800,
Anaheim, CA 92806. Debtor is a Corporation organized and existing under the laws
of the state of California  ("the State").  Debtor's  mailing  address and chief
place of business is 2777 Ontario Street, Burbank, CA 91504.


1.  CREATION OF SECURITY INTEREST.

        Debtor grants to Secured Party,  its successors and assigns,  a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement ("Collateral  Schedule"),
and in and against all  additions,  attachments,  accessories  and accessions to
such property,  all substitutions,  replacements or exchanges therefor,  and all
insurance  and/or other proceeds  thereof (all such property is individually and
collectively called the "Collateral"). This security interest is given to secure
the payment and  performance of all debts,  obligations  and  liabilities of any
kind  whatsoever  of Debtor to Secured  Party,  now  existing  or arising in the
future,  including  but not limited to the payment  and  performance  of certain
Promissory  Notes  from  time  to time  identified  on any  Collateral  Schedule
(collectively  "Notes"  and each a "Note"),  and any  renewals,  extensions  and
modifications  of such debts,  obligations and liabilities  (such Notes,  debts,
obligations and liabilities are called the "Indebtedness").


2.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

        Debtor  represents,  warrants  and  covenants  as of the  date  of  this
Agreement and as of the date of each Collateral Schedule that:

        (a)  Debtor's exact legal name is as set forth in the  preamble  of this
Agreement and Debtor is, and will remain,  duly organized,  existing and in good
standing  under  the  laws  of the  State  set  forth  in the  preamble  of this
Agreement,  has its chief  executive  offices at the  location  specified in the
preamble,  and is,  and  will  remain,  duly  qualified  and  licensed  in every
jurisdiction wherever necessary to carry on its business and operations;

        (b) Debtor has adequate power and capacity to enter into, and to perform
its  obligations  under  this  Agreement,  each  Note  and any  other  documents
evidencing,  or given in connection  with, any of the  Indebtedness  (all of the
foregoing are called the "Debt Documents");

        (c)  This Agreement  and  the  other  Debt   Documents  have  been  duly
authorized,  executed and delivered by Debtor and  constitute  legal,  valid and
binding  agreements  enforceable in accordance  with their terms,  except to the
extent  that  the  enforcement  of  remedies  may be  limited  under  applicable
bankruptcy and insolvency laws;

        (d)  No approval, consent or  withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any already obtained;

        (e) The entry into,  and  performance  by, Debtor of the Debt  Documents
will  not (i) violate  any of the  organizational  documents  of  Debtor  or any
judgment,  order, law or regulation  applicable to Debtor, or (ii) result in any
breach of or constitute a default under any contract to which Debtor is a party,
or result in the creation of any lien,  claim or  encumbrance on any of Debtor's
property (except for liens in favor of Secured Party) pursuant to any indenture,
mortgage,  deed of trust,  bank loan,  credit  agreement,  or other agreement or
instrument to which Debtor is a party;

        (f) There are no suits or  proceedings  pending  in court or before  any
commission,  board or other  administrative  agency against or affecting  Debtor
which could,  in the aggregate,  have a material  adverse effect on Debtor,  its
business or operations, or its ability to perform its obligations under the Debt
Documents,  nor does  Debtor  have  reason  to  believe  that any such  suits or
proceedings are threatened;




        (g) All financial  statements  delivered to Secured  Party in connection
with the Indebtedness  have been prepared in accordance with generally  accepted
accounting  principles,  and  since  the  date  of  the  most  recent  financial
statement,  there  has been no  material  adverse  change in  Debtors  financial
condition;

        (h) The Collateral is not, and will not be, used by Debtor for personal,
family or household purposes;

        (i) The Collateral is, and will remain, in good condition and repair and
Debtor will not be negligent in its care and use;

        (j) Debtor is,  and  will  remain,  the sole and  lawful  owner,  and in
possession of, the  Collateral,  and has the sole right and lawful  authority to
grant the security interest described in this Agreement;

        (k) The Collateral  is,  and will  remain,  free and clear of all liens,
claims and encumbrances of any kind whatsoever, except for (i) liens in favor of
Secured Party,  (ii) liens for taxes not yet due or for taxes being contested in
good faith and which do not involve,  in the judgment of Secured Party, any risk
of the sale,  forfeiture or loss of any of the  Collateral,  and (iii)  inchoate
materialmen's, mechanic's, repairmen's and similar liens arising by operation of
law in the normal course of business for amounts which are not  delinquent  (all
of such liens are called "Permitted Liens"); and

        (l) Debtor is and  will  remain  in full  compliance  with  all laws and
regulations applicable to it including, without limitation, (i) ensuring that no
person who owns a  controlling  interest in or otherwise  controls  Debtor is or
shall be (Y) listed on the Specially  Designated  Nationals  and Blocked  Person
List maintained by the Office of Foreign Assets Control ("OFAC"),  Department of
the Treasury,  and/or any other similar lists maintained by OFAC pursuant to any
authorizing  statute,  Executive Order or regulation or (Z) a person  designated
under  Section  1(b),  (c) or (d) of Executive  Order No. 13224  (September  23,
2001), any related enabling  legislation or any other similar  Executive Orders,
and  (ii)  compliance  with  all  applicable  Bank  Secrecy  Act  ("BSA")  laws,
regulations and government  guidance on BSA compliance and on the prevention and
detection of money laundering violations.


3.  COLLATERAL.

        (a) Until the  declaration  of  any  default,  Debtor  shall  remain  in
possession of the Collateral;  except that Secured Party shall have the right to
possess (i) any  chattel  paper or  instrument  that  constitutes  a part of the
Collateral,  and (ii) any other  Collateral  in which Secured  Party's  security
interest may be perfected only by  possession.  Secured Party may inspect any of
the Collateral during normal business hours after giving Debtor reasonable prior
notice.  If Secured  Party asks,  Debtor will promptly  notify  Secured Party in
writing of the location of any Collateral.

        (b) Debtor shall (i) use the  Collateral  only in its trade or business,
(ii) maintain all of the Collateral in good operating  order and repair,  normal
wear and tear excepted, (iii) use and maintain the Collateral only in compliance
with manufacturers recommendations and all applicable laws, and (iv) keep all of
the Collateral free and clear of all liens, claims and encumbrances  (except for
Permitted Liens).

        (c) Secured Party does not  authorize and Debtor agrees it shall not (i)
part with  possession of any of the  Collateral  (except to Secured Party or for
maintenance and repair),  (ii) remove any of the Collateral from the continental
United States, or (iii) sell, rent, lease,  mortgage,  license, grant a security
interest in or otherwise  transfer or encumber  (except for Permitted Liens) any
of the Collateral.

        (d) Debtor shall  pay  promptly  when  due  all  taxes,   license  fees,
assessments  and public and  private  charges  levied or  assessed on any of the
Collateral, on its use, or on this Agreement or any of the other Debt Documents.
At its option,  Secured Party may discharge taxes, liens,  security interests or
other  encumbrances  at any time levied or placed on the  Collateral and may pay
for the  maintenance,  insurance and  preservation  of the Collateral and effect
compliance  with the terms of this Agreement or any of the other Debt Documents.
Debtor  agrees to reimburse  Secured  Party,  on demand,  all costs and expenses
incurred by Secured Party in  connection  with such payment or  performance  and
agrees that such reimbursement obligation shall constitute Indebtedness.




        (e)Debtor shall, at all times, keep accurate and complete records of the
Collateral, and Secured Party shall have the right to inspect and make copies of
all of Debtor's  books and  records  relating to the  Collateral  during  normal
business hours, after giving Debtor reasonable prior notice.

        (f)Debtor agrees and  acknowledges  that any third person who may at any
time possess all or any portion of the  Collateral  shall be deemed to hold, and
shall hold,  the  Collateral as the agent of, and as pledge holder for,  Secured
Party.  Secured Party may at any time give notice to any third person  described
in the preceding  sentence  that such third person is holding the  Collateral as
the agent of, and as pledge holder for, the Secured Party.


4.  INSURANCE.

        (a) Debtor shall at all times bear the entire  risk of any loss,  theft,
damage to, or destruction of, any of the Collateral from any cause whatsoever.

        (b) Debtor agrees to keep the Collateral  insured against loss or damage
by fire  and  extended  coverage  perils,  theft,  burglary,  and for any or all
Collateral which are vehicles,  for risk of loss by collision,  and if requested
by Secured  Party,  against  such other  risks as Secured  Party may  reasonably
require.  The  insurance  coverage  shall be in an  amount no less than the full
replacement  value of the  Collateral,  and  deductible  amounts,  insurers  and
policies shall be acceptable to Secured  Party.  Debtor shall deliver to Secured
Party policies or  certificates  of insurance  evidencing  such  coverage.  Each
policy shall name Secured  Party as a loss payee,  shall provide for coverage to
Secured   Party   regardless  of  the  breach  by  Debtor  of  any  warranty  or
representation  made therein,  shall not be subject to  co-insurance,  and shall
provide that coverage may not be canceled or altered by the insurer  except upon
thirty (30) days prior written notice to Secured Party.  Debtor appoints Secured
Party as its  attorney-in-fact  to make proof of loss,  claim for  insurance and
adjustments with insurers,  and to receive payment of and execute or endorse all
documents, checks or drafts in connection with insurance payments. Secured Party
shall not act as Debtor's attorney-in-fact unless Debtor is in default. Proceeds
of  insurance  shall be applied,  at the option of Secured  Party,  to repair or
replace the Collateral or to reduce any of the Indebtedness.


5.  REPORTS.

        (a) Debtor shall promptly  notify Secured Party of (i) any change in the
name of Debtor, (ii) any change in the state of its incorporation,  organization
or registration,  (iii) any relocation of its chief executive offices,  (iv) any
relocation of any of the Collateral for which Appraised Value ("Appraised Value"
defined as Orderly  Liquidation Value in the Appendix A to the Micor Media Group
Appraisal  Report of Point.360  equipment  dated  November 25, 2005.) is greater
than $200,000, (v) any of the Collateral being lost, stolen, missing, destroyed,
materially  damaged or worn out, or (vi) any lien,  claim or  encumbrance  other
than Permitted Liens attaching to or being made against any of the Collateral.

        (b) Debtor will deliver to Secured  Party  Debtor's  complete  financial
statements,  certified by a recognized  firm of  certified  public  accountants,
within  ninety (90) days of the close of each fiscal year of Debtor.  If Secured
Party  requests,  Debtor  will  deliver  to  Secured  Party  copies of  Debtor's
quarterly  financial  reports  certified by Debtor's  chief  financial  officer,
within  ninety  (90) days after the close of each of  Debtor's  fiscal  quarter.
Debtor will deliver to Secured  Party copies of all Forms 10-K and 10-Q, if any,
within 30 days after the dates on which they are filed with the  Securities  and
Exchange Commission.

        (c)  Debtor  will  deliver to Secured  Party a complete  asset  location
analysis report within forty-five (45) days of the close of each fiscal quarter.

6.  FURTHER ASSURANCES.

        (a)Debtor shall, upon request of Secured Party, furnish to Secured Party
such further  information,  execute and deliver to Secured Party such  documents
and  instruments  (including,   without  limitation,   Uniform  Commercial  Code
financing  statements)  and shall do such other acts and things as Secured Party
may at any time reasonably  request  relating to the perfection or protection of
the security  interest  created by this Agreement or for the purpose of carrying
out the intent of this Agreement.  Without limiting the foregoing,  Debtor shall
cooperate  and do all acts deemed  necessary or  advisable  by Secured  Party to
continue in Secured Party a perfected first security interest in the Collateral,
and shall  obtain and  furnish to Secured  Party any  subordinations,  releases,
landlord waivers, lessor waivers,  mortgagee waivers, or control agreements, and
similar  documents  as may be from time to time  requested  by,  and in form and
substance satisfactory to, Secured Party.




        (b) Debtor authorizes  Secured  Party to file a financing  statement and
amendments   thereto   describing   the  Collateral  and  containing  any  other
information   required  by  the  applicable   Uniform  Commercial  Code.  Debtor
irrevocably  grants  to  Secured  Party  the  power  to sign  Debtor's  name and
generally to act on behalf of Debtor to execute and file applications for title,
transfers of title,  financing  statements,  notices of lien and other documents
pertaining to any or all of the  Collateral;  this power is coupled with Secured
Party's interest in the Collateral. Debtor shall, if any certificate of title be
required or  permitted  by law for any of the  Collateral,  obtain and  promptly
deliver to Secured  Party such  certificate  showing the lien of this  Agreement
with respect to the  Collateral.  Debtor  ratifies its prior  authorization  for
Secured Party to file financing statements and amendments thereto describing the
Collateral  and  containing  any  other  information  required  by  the  Uniform
Commercial Code if filed prior to the date hereof.

        (c) Debtor shall indemnify and defend the Secured Party,  its successors
and assigns, and their respective  directors,  officers and employees,  from and
against all claims,  actions and suits (including,  without limitation,  related
attorneys'  fees) of any kind  whatsoever  arising,  directly or indirectly,  in
connection with any of the Collateral.


7.  DEFAULT AND REMEDIES.

        (a)Debtor shall be in default under this Agreement and each of the other
Debt Documents if:

        (i)  Debtor  fails  to pay  within  10  days  after  its  due  date  any
installment or other amount due or coming due under any of the Debt Documents;

        (ii)Debtor, without the prior written consent of Secured Party, attempts
to or does sell except as otherwise provided in the Debt Document,  rent, lease,
license,  mortgage,  grant a security  interest  in, or  otherwise  transfer  or
encumber (except for Permitted Liens) any of the Collateral;

        (iii) Debtor breaches any of its insurance obligations under Section 4;

        (iv)Debtor  breaches any of its other  obligations under any of the Debt
Documents  and fails to cure that breach  within  thirty (30) days after written
notice from Secured Party;

        (v) Any warranty,  representation  or statement made by Debtor in any of
the Debt Documents or otherwise in connection with any of the Indebtedness shall
be false or misleading in any material respect;

        (vi)Any of the Collateral is subjected to attachment,  execution,  levy,
seizure or confiscation in any legal proceeding or otherwise, or if any legal or
administrative  proceeding is commenced against Debtor or any of the Collateral,
which in the good faith judgment of Secured Party subjects any of the Collateral
to a material risk of attachment,  execution,  levy, seizure or confiscation and
no bond is posted or protective order obtained to negate such risk;

        (vii) Debtor breaches or is in default under any other agreement between
Debtor and Secured Party;

        (viii) Debtor or other obligor for any of the Indebtedness (collectively
"Debtor") dissolves, terminates its existence, becomes insolvent or ceases to do
business as a going concern;

        (ix)A  receiver is  appointed  for all or of any part of the property of
Debtor or Debtor makes any assignment for the benefit of creditors;

        (x) Debtor files a petition under any bankruptcy,  insolvency or similar
law, or any such  petition is filed against  Debtor and is not dismissed  within
forty-five (45) days;

        (xi)Debtor  improperly  files  an  amendment  or  termination  statement
relating to a filed financing statement describing the Collateral;

        (xii) Intentionally Omitted

        (xiii)  Debtor is  judicially  declared in default under any contract or
obligation  requiring  the  payment  of money in an  original  principal  amount
greater than  $250,000.00  and such  judgment or judgments  shall have  remained
undischarged or unstayed for a period of sixty (60) days;




        (xiv) there is any dissolution or termination of existence of Debtor;

        (xv) there is any merger or consolidation  of Debtor,  without the prior
written  consent of Secured  Party,  which  shall not be  unreasonably  withheld
unless aggregate  acquisition price of all stock and/or assets acquired does not
exceed $750,000 ("Permitted Acquisition"); or

        (xvi) Haig S. Bagerdjian  shall cease to be the Chief Executive  Officer
of the  Debtor  and 60 days  shall  have  elapsed  without a  successor  thereto
satisfactory to the Secured Party having been appointed, (ii) Haig S. Bagerdjian
shall cease to  beneficially  own Capital Stock (the "Capital  Stock" defined as
any and all shares,  interests,  participations  or other  equivalents  (however
designated) of capital stock of a corporation,  any and all equivalent ownership
interests in a Person (other than a corporation),  any and all warrants, options
or rights to purchase any of the foregoing or any other  securities  convertible
into any of the  foregoing)representing  at least 15% of the  votes  that may be
cast in an election of directors of the Debtor  provided that such amount may be
less than 15% (but not less than 7.5%) if such  reduction is due to the issuance
of stock of the Borrower as consideration for a Permitted Acquisition), or (iii)
individuals who constituted the Debtors Board of Directors as of the date of the
Agreement (the "Directors")  shall cease for any reason to constitute a majority
of the directors then in office (provided that the Directors may constitute less
than a  majority  if such  reduction  is due to the  appointment  of  additional
directors in connection with a Permitted Acquisition)

        (b)If  Debtor is in default,  the  Secured  Party,  at its  option,  may
declare  any or all of the  Indebtedness  to be  immediately  due  and  payable,
without demand or notice to Debtor or any Guarantor. The accelerated obligations
and  liabilities  shall bear interest (both before and after any judgment) until
paid in full at the lower of twelve  percent (12%) per annum or the maximum rate
not prohibited by applicable law.

        (c)After  default,  Secured  Party  shall  have  all of the  rights  and
remedies of a Secured  Party under the Uniform  Commercial  Code,  and under any
other applicable law.  Without limiting the foregoing,  Secured Party shall have
the right to (i)  notify  any  account  debtor of Debtor or any  obligor  on any
instrument  which  constitutes  part of the  Collateral  to make  payment to the
Secured Party, (ii) with or without legal process,  enter any premises where the
Collateral  may be and take  possession  of and remove the  Collateral  from the
premises or store it on the  premises,  (iii) sell the  Collateral  at public or
private  sale,  in whole or in part,  and have the right to bid and  purchase at
said sale, or (iv) lease or otherwise  dispose of all or part of the Collateral,
applying  proceeds from such disposition to the obligations then in default.  If
requested by Secured Party,  Debtor shall  promptly  assemble the Collateral and
make it available to Secured  Party at a place to be designated by Secured Party
which is reasonably  convenient  to both parties.  Secured Party may also render
any or all of the Collateral  unusable at the Debtor's  premises and may dispose
of such  Collateral on such premises  without  liability for rent or costs.  Any
notice  that  Secured  Party is  required  to give to Debtor  under the  Uniform
Commercial Code of the time and place of any public sale or the time after which
any private sale or other  intended  disposition of the Collateral is to be made
shall be deemed to constitute  reasonable  notice if such notice is given to the
last known address of Debtor at least five (5) days prior to such action.

        (d)Proceeds  from  any  sale or  lease  or  other  disposition  shall be
applied: first, to all costs of repossession, storage, and disposition including
without limitation  attorneys',  appraisers',  and auctioneers' fees; second, to
discharge  the  obligations  then in  default;  third,  to  discharge  any other
Indebtedness  of  Debtor  to  Secured  Party,  whether  as  obligor,   endorser,
guarantor,  surety or  indemnitor;  fourth,  to  expenses  incurred in paying or
settling  liens and claims against the  Collateral;  and lastly,  to Debtor,  if
there exists any surplus. Debtor shall remain fully liable for any deficiency.

        (e)Debtor  agrees to pay all reasonable  attorneys' fees and other costs
incurred by Secured Party in connection with the enforcement, assertion, defense
or preservation of Secured Party's rights and remedies under this Agreement,  or
if prohibited by law, such lesser sum as may be permitted. Debtor further agrees
that such fees and costs shall constitute Indebtedness.

        (f)Secured Party's rights and remedies under this Agreement or otherwise
arising are cumulative and may be exercised singularly or concurrently.  Neither
the  failure  nor any delay on the part of the  Secured  Party to  exercise  any
right,  power or privilege under this Agreement  shall operate as a waiver,  nor
shall any single or partial exercise of any right,  power or privilege  preclude
any other or further  exercise of that or any other right,  power or  privilege.
SECURED  PARTY SHALL NOT BE DEEMED TO HAVE  WAIVED ANY OF ITS RIGHTS  UNDER THIS
AGREEMENT  OR UNDER ANY OTHER  AGREEMENT,  INSTRUMENT  OR PAPER SIGNED BY DEBTOR
UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY SECURED PARTY. A waiver
on any one occasion shall not be construed as a bar to or waiver of any right or
remedy on any future occasion.




        (g)DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY
TRIAL OF ANY  CLAIM  OR  CAUSE  OF  ACTION  BASED  UPON OR  ARISING  OUT OF THIS
AGREEMENT,  ANY OF THE OTHER DEBT  DOCUMENTS,  ANY OF THE  INDEBTEDNESS  SECURED
HEREBY,  ANY DEALINGS  BETWEEN  DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,  AND/OR THE RELATIONSHIP
THAT IS BEING  ESTABLISHED  BETWEEN DEBTOR AND SECURED PARTY.  THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL  ENCOMPASSING  OF ANY AND ALL DISPUTES  THAT MAY BE
FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE.  THIS WAIVER MAY NOT BE MODIFIED
EITHER  ORALLY OR IN  WRITING.  THE WAIVER  ALSO SHALL  APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER
DEBT  DOCUMENTS,  OR TO ANY  OTHER  DOCUMENTS  OR  AGREEMENTS  RELATING  TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.


8.  MISCELLANEOUS.

        (a)This  Agreement,  any Note and/or any of the other Debt Documents may
be assigned, in whole or in part, by Secured Party without notice to Debtor, and
Debtor agrees not to assert  against any such assignee,  or assignee's  assigns,
any defense,  set-off,  recoupment claim or counterclaim which Debtor has or may
at any time have against Secured Party for any reason whatsoever.  Debtor agrees
that if Debtor  receives  written  notice of an assignment  from Secured  Party,
Debtor will pay all amounts  payable under any assigned  Debt  Documents to such
assignee or as  instructed  by Secured  Party.  Debtor also agrees to confirm in
writing  receipt of the notice of assignment  as may be reasonably  requested by
Secured Party or assignee.

        (b)All notices to be given in connection with this Agreement shall be in
writing,  shall be addressed to the parties at their  respective  addresses  set
forth in this Agreement  (unless and until a different  address may be specified
in a written  notice to the other  party),  and shall be deemed given (i) on the
date of receipt if delivered in hand or by facsimile  transmission,  (ii) on the
next  business  day after  being sent by express  mail,  and (iii) on the fourth
business day after being sent by regular,  registered or certified mail. As used
herein,  the term  "business  day"  shall  mean and  include  any day other than
Saturdays,  Sundays,  or other days on which  commercial  banks in New York, New
York are required or authorized to be closed.

        (c)Secured  Party may  correct  patent  errors and fill in all blanks in
this Agreement or in any Collateral  Schedule  consistent  with the agreement of
the parties.

        (d)Time is of the essence of this  Agreement.  This  Agreement  shall be
binding,  jointly and severally,  upon all parties described as the "Debtor" and
their respective heirs, executors, representatives,  successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.

        (e)This  Agreement and its  Collateral  Schedules  constitute the entire
agreement  between  the  parties  with  respect  to the  subject  matter of this
Agreement and supersede all prior  understandings  (whether  written,  verbal or
implied) with respect to such subject matter.  THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT
ONLY BY A WRITING  SIGNED BY BOTH PARTIES.  Section  headings  contained in this
Agreement  have been  included for  convenience  only,  and shall not affect the
construction or interpretation of this Agreement.

        (f)This  Agreement  shall continue in full force and effect until all of
the  Indebtedness  has been  indefeasibly  paid in full to Secured  Party or its
assignee.  The surrender,  upon payment or otherwise,  of any Note or any of the
other documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other  Indebtedness  as may then
exist or as it may be  reasonably  contemplated  will exist in the future.  This
Agreement shall automatically be reinstated if Secured Party is ever required to
return or restore the payment of all or any portion of the Indebtedness  (all as
though such payment had never been made).

        (g)THIS  AGREEMENT  AND  THE  RIGHTS  AND  OBLIGATIONS  OF  THE  PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL  LAWS OF THE STATE OF NEW YORK  (WITHOUT  REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION,  VALIDITY
AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

        IN WITNESS  WHEREOF,  Debtor and Secured Party,  intending to be legally
bound hereby,  have duly executed  this  Agreement in one or more  counterparts,
each of which  shall be deemed to be an  original,  as of the day and year first
aforesaid.

SECURED PARTY:                                DEBTOR:

General Electric Capital Corporation          Point.360

By:  /s/ Stephen Peterson                     By:  /s/ Alan Steel
     --------------------                          -------------------

Name:    Stephen Peterson                     Name:    Alan_Steel
     --------------------                          -------------------

Title:   Vice President                       Title:   CFO
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                               FINANCIAL COVENANT
                      ADDENDUM TO MASTER SECURITY AGREEMENT
                          DATED AS OF DECEMBER 30, 2005


        THIS FINANCIAL COVENANT ADDENDUM ("Addendum") amends and supplements the
above referenced  agreement (the "Agreement"),  between General Electric Capital
Corporation  (together with its successors and assigns, if any, "Secured Party")
and Point.360 ("Debtor") and is hereby incorporated into the Agreement as though
fully  set  forth  therein.  The  Agreement  is hereby  amended  by  adding  the
following:

        1. Financial Covenants. Debtor hereby represents, warrants and covenants
to Secured Party that it shall maintain in favor of Secured  Party,  as if fully
set forth herein,  all of the  affirmative  and positive  covenants,  as well as
events of  default,  (herein,  "Financial  Covenants")  as set forth in Debtor's
Credit  Agreement  dated  March  12,  2004 , as  amended  as of the  date of the
Agreement,between  Debtor  and Union  Bank of  California,  N. A.  (herein,  the
"Credit  Agreement"),  as such Credit  Agreement is in effect on the date of the
Agreement.  Debtor hereby further  covenants and agrees that no amendment to the
Credit  Agreement  in respect of the  Financial  Covenants or any of the defined
terms used therein to determine and/or define the Financial  Covenants,  nor any
replacement  of such Credit  Agreement with the same or any other senior secured
lender(s) to Debtor,  shall have any force or effect  hereunder unless and until
such proposed amendment, replacement, or other document, is delivered in writing
to Secured Party and Secured Party consents thereto in writing, as Secured Party
shall determine in its sole discretion,  but would not unreasonably  withhold. A
default regarding any such Financial Covenant,  shall constitute a default under
the Agreement.

        2.  Compliance  Certificate.  Unless waived in writing by Secured Party,
Debtor shall provide  Secured Party at least quarterly  (concurrently  with such
certificate  provided  pursuant  to the  Credit  Agreement  or  any  replacement
thereof) with a certificate  executed by Debtor's chief  financial  officer,  or
other person  acceptable to Secured Party,  certifying that the  representations
and the warranties set forth in this Addendum and otherwise in the Agreement are
true and correct as of the date of the certificate and further  certifying that,
as of the date of the certificate, no default exists under the Agreement.

EXCEPT AS SPECIFICALLY  PROVIDED HEREIN,  TERMS USED, BUT NOT OTHERWISE  DEFINED
HEREIN  SHALL  HAVE THE  MEANINGS  GIVEN  TO THEM IN THE  AGREEMENT.  EXCEPT  AS
EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT.

        IN WITNESS  WHEREOF,  the parties  hereto have executed this Addendum by
signature of their respective authorized  representative,  as of the 30th day of
December, 2005.


SECURED PARTY:                                DEBTOR:

General Electric Capital Corporation          Point.360

By:  /s/ Stephen Peterson                     By:  /s/ Alan Steel
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Name:    Stephen Peterson                     Name:    Alan_Steel
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Title:   Vice President                       Title:   CFO
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