Exhibit 10.1

 

LEASE AGREEMENT

 

This Lease Agreement (this “Lease”), effective as of July 1, 2015, is made
between Walton Empire Center V, L.L.C., a Delaware limited liability company
(“Landlord”), and Point.360, a California corporation (“Tenant”).

 

RECITALS

 

A. Landlord and Modern VideoFilm, Inc., a Delaware corporation (“MVF”) are
parties to a Lease dated as of December 6, 2010, as amended by an undated
agreement concerning excess power usage (as amended, the “MVF Lease”), for
certain premises more particularly described therein (the “MVF Premises”) within
the building having a street address of 2300 Empire Avenue, Burbank, California.

 

B. MVF and/or its creditors sold certain of its assets to Tenant and it is
contemplated that MVF and Landlord will terminate the MVF Lease effective as of
June 30, 2015 (the “Effective Termination Date”).

 

C. Subject to the terms and conditions of this Lease and conditioned upon the
termination of the MVF Lease, Tenant will, among other matters, lease a portion
of the MVF Premises known as Suite 100, have the right to use certain signage
previously installed by MVF, and obtain a short-term license to occupy a portion
of the MVF Premises known as Suite 200.

 

NOW THEREFORE, in consideration of the mutual terms and conditions herein
contained, the parties hereby agree as follows:

 

ARTICLE 1
LEASE OF PREMISES; TERM

 

1.1 Lease. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord the Premises, for the Term. “Premises” means Suite 100 in the Building,
which is shown on the floor plan attached as Exhibit A. “Building” means the
seven-story office building located at 2300 Empire Avenue, Burbank, California.
“Term” means the period commencing on the Commencement Date and ending
twenty-four (24) months after the Commencement Date. “Commencement Date” means
July 1, 2015, subject to extension as provided herein. “Termination Date” means
the date on which this Lease terminates for any reason, including expiration of
the Term. Notwithstanding anything contained in this Lease to the contrary,
Landlord shall have no obligation to give Tenant possession of the Premises
until Landlord receives the Security Deposit of $113,790.00 (37,930 RSF x
$3.00/RSF), the first month’s installment of Base Rent in the amount of
$113,790.00 (37,930 RSF x $3.00/RSF) as required by Section 2.1 below, the first
months reserved ($625 or 5 x $125) and unreserved parking payment ($9,250.00 or
185 x $50.00) as required by Section 8.5.1 below and a one-time payment of
$300,000.00. These payments aggregate to an initial payment in the amount of
$537,455.00. Tenant shall have the non-exclusive right to use the common areas
of the Project as they exist from time to time. Subject to casualty,
condemnation and compliance with reasonable security procedures, Tenant shall
have access to the Premises, Building and Parking Facilities twenty-four
(24) hours per day, seven (7) days per week. “Project” means the Building, the
common areas, the Parking Facilities, and the land, collectively, as shown on
the site plan attached as Exhibit B. “Parking Facilities” means, collectively,
the six-story parking structure and the surface parking lots shown on such site
plan. Landlord may temporarily close, make alterations or additions to, or
change the location of, elements of the Project as long as such changes do not
materially adversely affect either Tenant’s use of the Premises for the
Permitted Use or Tenant’s ingress or egress from the Premises. Landlord shall
have the right to change the name, number or designation by which the Project or
Building, or both, are commonly known.

 

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1.2 As Is; No Representations. Except as specifically provided in this Lease,
Tenant’s lease of the Premises and use of the common areas of the Project is on
an “AS IS” basis. Landlord has not made any representation or warranty to Tenant
regarding (a) the condition or suitability of the Premises, or any other portion
of the Project, for the conduct of Tenant’s business, or (b) any Laws, liens,
encumbrances, mortgages, easements, covenants, conditions, restrictions,
agreements, or other instruments or matters (collectively, the “Restrictions”)
that may affect the conduct of Tenant’s business in, or Tenant’s use of, the
Premises, or any other rights or benefits under this Lease. As of the date of
this Lease, Landlord has not had the Project or the Premises inspected by a
Certified Access Specialist (as that term is defined in California Civil Code
Section 55.52), and Landlord makes no representations or warranties regarding
whether or not such an inspection has been performed by any other party. Tenant
(for itself and all others claiming through Tenant) irrevocably waives and
releases Tenant’s rights and claims under or in connection with Section 1938 of
the California Civil Code, or any similar or successor Law.

 

1.3 Extension Options. Landlord hereby grants to Tenant four (4) consecutive
options to extend the Term of this Lease for not less than all of the Premises
then being leased by Tenant, other than the Temporary Suites (as defined in
Section 1 of the Addendum) and the Second Floor Space (as defined in Section 3
of the Addendum) (each, an “Extension Option”), each for a period of six (6)
months (each, an “Option Term”). Except as otherwise provided herein, each such
extension shall be on the same terms, conditions and provisions as contained in
this Lease (including escalation of the Base Rent by 3% per annum). Except as
provided in this Section 1.3, Tenant shall have no other rights to extend the
Term. If Tenant wishes to exercise an Extension Option, Tenant shall, on or
before the date occurring 12 months prior to the expiration of the Term or the
applicable Option Term, as applicable, irrevocably exercise the Extension Option
by delivering Notice (each, an “Exercise Notice”) thereof to Landlord. If Tenant
fails to timely deliver an Exercise Notice, the Extension Option (and any
remaining Extension Options) shall thereupon expire automatically. Tenant’s
right to exercise the Extension Options is personal to, and may be exercised
only by Point.360, a California corporation (the “Original Tenant”) or any
Transferee to whom Original Tenant’s entire interest in this Lease or the
Premises has been transferred in a Permitted Transfer. Notwithstanding anything
in this Section 1.3 to the contrary, if an Event of Default has occurred at the
time the Exercise Notice is received by Landlord or at any time thereafter until
the commencement date of the applicable Option Term, then Landlord shall have
the right, in addition to all of its other rights and remedies under this Lease,
to unilaterally revoke Tenant’s exercise of the Extension Option, in which case
Tenant shall have no further rights under this Lease to renew or extend the Term
and this Lease shall expire on the Termination Date.

 

1.4 Holdover. If Tenant has provided Notice to Landlord at least 90 days prior
to the expiration of this Lease, such Notice to include a time period (up to
three (3) months) (the “Permitted Hold-Over Period”) in which Tenant intends to
remain in the Premises, Tenant shall have the right to holdover possession for
the Permitted Hold-Over Period under the same terms and conditions as the
previous Term including escalation of the Base Rent by 3% per annum. In the
event such holdover possession exceeds the Permitted Hold-Over Period or in the
event of any other holdover, such possession shall be a tenancy at sufferance
only at a rate of 125% of Base Rent in effect upon the commencement of the
Permitted Hold-Over Period. During any holdover possession, Tenant shall be
liable to perform all of the other obligations of Tenant set forth in this
Lease. In addition, if Tenant has not vacated the Premises within three (3)
months after the expiration of the Permitted Hold-Over Period, Tenant shall be
liable to Landlord for all losses Landlord suffers as a result of such
additional holdover possession, including any lost revenues and any amounts
Landlord is required to pay any new tenant (whether in the form of rent
abatement, monetary damages or otherwise).

 

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ARTICLE 2
RENT

 

2.1 Base Rent.

 

2.1.1 Generally. Tenant shall pay to Landlord the monthly Base Rent in effect
from time to time on or before the first day of each full calendar month during
the Term; provided, that Tenant shall pay to Landlord the monthly Base Rent for
the first full calendar month of the Term prior to or concurrently with Tenant’s
execution of this Lease. The Base Rent due for any partial calendar month at the
end of the Term shall also be prorated. Tenant shall pay to Landlord all items
of Rent without deduction or offset and without notice or demand (except as
specifically provided in this Lease in respect of Additional Rent) to the
payment address set forth on the signature page of this Lease, or to such other
person, at such other place, or in such other manner as Landlord may designate
by giving to Tenant Notice thereof. Except as otherwise provided in this Lease,
all Rent shall be due 30 days after Landlord gives to Tenant demand therefor.

 

2.1.2 Defined Terms.

 

(a) “Base Rent” means:

 

Period Annual Base Rent Monthly Base Rent 7/1/15 – 6/30/16 $1,365,480.00
$113,790.00 7/1/16 – 6/30/17 $1,406,444.40 $117,203.70

 

(b) “Additional Rent” means all amounts payable by Tenant to Landlord in
accordance with this Lease, other than Base Rent.

 

(c) “Rent” means all amounts payable by Tenant to Landlord in accordance with
this Lease.

 

2.2 Expenses and Taxes.

 

2.2.1 Generally. For each Expense Year during the Term, Tenant shall pay to
Landlord (a) Tenant’s Share of the Expenses in excess of the Expenses for the
Base Year (“Tenant’s Expense Payment”) and (b) Tenant’s Share of the Taxes in
excess of the Taxes for the Base Year (“Tenant’s Tax Payment”); provided that no
decrease in the Expenses or the Taxes for any Expense Year from the Expenses or
the Taxes for the Base Year shall entitle Tenant to any credit against Rent.

 

2.2.2 Defined Terms.

 

(a) “Expense Year” means each calendar year after the Base Year occurring in
whole or in part during the Term.

 

(b) “Base Year” means calendar year 2015.

 

(c) “Tenant’s Share” means 10.797%.

 

(d) “Expenses” means all expenses, costs, and amounts of any kind or nature that
Landlord pays or incurs because of, or in connection with, the ownership,
operation, maintenance, security, repair, replacement, restoration, or
management of any portion of the Project, and, if less than 95% of the rentable
area of the Building is leased during the Expense Year in question, then
together with the additional Expenses that Landlord would have paid or incurred
if 95% of the rentable area of the Building had been leased during the Expense
Year in question. Expenses shall not include (i) depreciation and amortization
of the Project and equipment in the Project except amortization of (A) the cost
of personal property, over the useful life of such personal property, together
with interest on the unamortized portion of such cost at the Applicable Rate,
(B) the cost of capital improvement items that Landlord reasonably expects to
reduce the Expenses, but only to the extent of the reduction actually achieved,
over the expected period of reduction of the Expenses, together with interest on
the unamortized portion of such cost at the Applicable Rate, and (C) the cost of
any other capital improvement items required by the Restrictions first
enforceable after the date of this Lease, over the useful life of such capital
improvement items, together with interest on the unamortized portion of such
cost at the Applicable Rate, (ii) loan principal payments, (iii) costs of
altering premises leased to tenants, (iv) leasing commissions, (v) interest
expenses on long-term borrowings, or (vi) advertising costs. Further, from and
after January 1, 2016, Tenant shall not be responsible for payment of any
increases in the Capped Expenses that exceeds the Maximum Permitted Increase.
Uncapped Expenses shall be calculated without any cap or limit on annual
increases.

 

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(e) “Applicable Rate” means the greater of (i) the prime lending rate announced
by the Wall Street Journal on the date the calculation in question is made, plus
200 basis points, or (ii) the rate actually paid by Landlord to borrow funds to
pay for the amount in question.

 

(f) “Law(s)” means all present and future federal, state, county, and local
governmental and municipal laws, statutes, ordinances, rules, regulations,
codes, decrees, orders, and other requirements, equitable remedies and decisions
by courts in cases where such decisions are considered binding precedents in
California, and decisions of federal courts applying the law of California.

 

(g) “Taxes” means all real estate taxes, fees, assessments and other charges of
any kind or nature, whether general, special, ordinary, or extraordinary, that
Landlord shall pay or accrue during any Expense Year (without regard to any
different fiscal year used by such governmental authority) that are levied in
respect of the Project, or in respect of any improvement, fixture, equipment, or
other property of Landlord, real or personal, located in the Project, and used
in connection with the operation of the Project, and all fees, expenses, and
costs incurred by Landlord in investigating, protesting, contesting, or in any
way seeking to reduce or avoid increases in any assessments, levies, or the tax
rate pertaining to the Taxes, and, if less than 95% of the rentable area of the
Building is leased during the calendar year in question, then together with the
additional Taxes that would have been levied if 95% of the rentable area of the
Building had been leased during the calendar year in question. Taxes shall not
include corporate franchise taxes, estate taxes, inheritance taxes, net income
taxes, or any taxes to be paid or reimbursed by Tenant in accordance with
Article 2.2.5.

 

(h) “Capped Expenses”: Shall mean the Expenses exclusive of the Uncapped
Expenses.

 

(i) “Maximum Permitted Increase”: Shall mean five percent (5%) of the Capped
Expenses with respect to the preceding twelve month period on a cumulative,
compounded basis. In other words, if the percentage increase in the Capped
Expenses is (a) less than the Maximum Permitted Increase, then the Capped
Expenses shall be increased by their actual percentage increase plus that
portion of the percentage increase, if any, not employed in connection with a
prior increase in the Capped Expenses due to the fact that in such prior
period(s) the percentage increase exceeded the Maximum Permitted Increase or (b)
more than the Maximum Permitted Increase, then the Capped Expenses shall be
increased by the Maximum Permitted Increase plus that portion of the percentage
increase, if any, not employed in connection with a prior increase in the Capped
Expenses due to the fact that in such prior period(s) the percentage increase
was less than the Maximum Permitted Increase.

 

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(j) “Uncapped Expenses”: Shall mean the third party utilities, insurance,
security and capital expenditures. For the avoidance of doubt, Taxes, which are
payable pursuant to Section 2.2.1(b), are not Capped Expenses (or Expenses) and
are not subject to the Maximum Permitted Increase.

 

(k) “Qualified Person” means an accountant or other person selected by Tenant
experienced in accounting for income and expenses of office projects engaged
solely by Tenant on terms that do not entail any compensation based or measured
in any way upon any savings in Additional Rent or reduction in Expenses achieved
through the review process.

 

2.2.3 Estimated Statement. Before the first day of each Expense Year, or as soon
thereafter as is reasonably practicable, Landlord may give to Tenant Landlord’s
estimate of Tenant’s Expense Payment and Tenant’s Tax Payment for such Expense
Year (each, an “Estimated Statement”); provided that if Landlord fails to timely
give Tenant any Estimated Statement, such failure shall not constitute waiver of
Tenant’s obligation to pay Tenant’s Expense Payment or Tenant’s Tax Payment. On
or before the first day of each calendar month during an Expense Year, Tenant
shall pay to Landlord, in advance, 1/12 of Tenant’s Expense Payment and Tenant’s
Tax Payment set forth on the applicable Estimated Statement (each, a “Monthly
Expense and Tax Installment”); provided that if Landlord fails to give to Tenant
an Estimated Statement before the first day of an Expense Year, then Tenant
shall continue to pay to Landlord on or before the first day of each calendar
month the amount of the Monthly Expense and Tax Installment applicable to the
last month of the immediately preceding Expense Year until Landlord gives to
Tenant the applicable Estimated Statement, and then Tenant shall pay to
Landlord, or Landlord shall credit to Tenant (as applicable), any underpayment
or overpayment of such Monthly Expense and Tax Installments indicated by the
Estimated Statement with the next Monthly Expense and Tax Installment coming
due.

 

2.2.4 Annual Statement. Within 120 days after the last day of the Base Year and
of each Expense Year, Landlord shall give to Tenant a statement of the Expenses
and the Taxes for the Base Year or the applicable Expense Year (each, an “Annual
Statement”). Landlord’s failure to timely give to Tenant any Annual Statement
shall not impair or constitute waiver of Tenant’s obligation to pay Tenant’s
Expense Payment or Tenant’s Tax Payment. Within 30 days after Landlord gives to
Tenant an Annual Statement, (a) if the total of the Monthly Expense and Tax
Installment actually paid by Tennant for the Expense Year is less than the total
of Tenant’s Expense Payment and Tenant’s Tax Payment, then Tenant shall pay to
Landlord such deficiency, or (b) if the total of the Monthly Expense and Tax
Installments actually paid by Tenant for the Expense Year is more than the total
of Tenant’s Expense Payment and Tenant’s Tax Payment, then Landlord shall credit
to Tenant against Rent next due (or, if the Term has ended, refund in cash) such
overpayment.

 

2.2.5 Other Taxes. Tenant shall pay prior to delinquency, or, if payable by
Landlord, reimburse to Landlord, any and all taxes, fees, assessments, and other
charges (other than Landlord’s net income taxes), whether or not customary or
within the contemplation of the parties to this Lease as of the date of this
Lease levied or imposed by any governmental body having authority: (a) upon,
allocable to, or measured by the Rent, (b) upon, or with respect to, the
possession, leasing, operation, management, maintenance, alteration, repair,
use, or occupancy of the Premises, or (c) upon, or measured by, Tenant’s gross
receipts or payroll, or the value of Tenant’s Personalty or the Tenant
Alterations.

 

2.2.6 Tenant’s Review Rights. Provided that Tenant is not then in default beyond
the expiration of any applicable cure periods, Tenant shall have the right, once
each Expense Year, to cause a Qualified Person to reasonably review supporting
data for any portion of an Annual Statement delivered to Tenant by Landlord,
including real estate tax statements, and information on utilities, repairs,
maintenance and insurance and any other costs related to Expenses charged to
Tenant, in accordance with the following procedure:

 

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(a) Tenant shall, within 180 days after any Annual Statement is delivered,
deliver a Notice to Landlord specifying Tenant’s election to review such Annual
Statement and Tenant shall simultaneously pay to Landlord all amounts due from
Tenant to Landlord as specified in the Annual Statement for the Expense Year. In
no event shall Tenant be entitled to withhold, deduct, or offset any monetary
obligation of Tenant to Landlord under this Lease (including, without
limitation, Tenant’s obligation to make all payments of Base Rent and Tenant’s
Share of Expenses and Taxes) pending the completion of, and regardless of the
results of, any review of records under this Section 2.2.6. The right of Tenant
under this Section 2.2.6 may only be exercised once for any Annual Statement
(and only once for the Base Year), and if Tenant fails to meet any of the above
conditions as a prerequisite to the exercise of such right, the right of Tenant
under this Section 2.2.6 for a particular Annual Statement shall be deemed
waived.

 

(b) Tenant acknowledges that Landlord maintains its records for the Project at
the office of Landlord’s property manager located at the Project, and Tenant
agrees that any review of records under this Section 2.2.6 shall be at the sole
expense of Tenant (except as otherwise specifically set forth in
Section 2.2.6(c) below) and shall be conducted by a Qualified Person at such
location.

 

(c) If the results of Tenant’s review show that Landlord has overcharged Tenant,
then Tenant may so notify Landlord in writing and if Landlord does not object in
writing to such results within 45 days following its receipt of such notice,
Landlord shall, at Landlord’s election, either give Tenant a credit against Rent
next due or reimburse Tenant in the amount equal to the amount of such
overcharge. If Landlord does timely object to such results, then either party
may submit such dispute to arbitration in accordance with the Commercial Rules
of the American Arbitration Association, and Tenant shall not be entitled to
reimbursement or a credit unless and until such time as the dispute is resolved
in Tenant’s favor. Tenant agrees to pay the cost of Tenant’s review, provided
that if any legal proceeding or the review (if Landlord fails to object) shows
that Landlord’s determination of the contested sums set forth in the Annual
Statement was overstated by more than 5%, Landlord shall pay the reasonable out
of pocket cost of such review.

 

2.2.7 Confidentiality. Subject to court order or applicable Laws, Tenant shall
keep strictly confidential and shall cause any Qualified Person reviewing
Landlord’s records on behalf of Tenant to keep strictly confidential, the
information in Landlord’s records, any compilations, comparisons, summaries or
other work product prepared by Tenant or such Qualified Person based upon any
review of Landlord’s records, any adjustments to Expenses or Tenant’s Share of
Expenses made by Landlord based upon any such review, and any discussions or
negotiations between Landlord and Tenant regarding the same. The information in
Landlord’s records and any compilations, comparisons, summaries or other work
product prepared by or for Tenant based thereon shall be used solely for the
purpose of evaluating the accuracy of the Annual Statement. Tenant acknowledges
and agrees that any records reviewed under Section 2.2.6 constitute confidential
information of Landlord, which shall not be disclosed to anyone other than the
Qualified Person performing the review, Tenant’s attorneys, the principals of
Tenant who receive the results of the review, and Tenant’s accounting employees,
and as required to be disclosed by court order or applicable Law. The disclosure
of such information to any other person, including any other tenant at the
Project, by Tenant, the Qualified Person engaged by Tenant to review Landlord’s
records, or any of Tenant’s employees, consultants, attorneys, accountants or
agents shall constitute a material breach of this Lease.

 

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2.3 Late Payments. Together with each payment of Rent that Tenant pays to
Landlord after such payment is due, Tenant shall pay to Landlord the Late Charge
and interest calculated on the amount of such payment (plus the Late Charge)
over the period commencing on the day immediately following the day on which
such payment was due and ending on the day on which Tenant pays to Landlord such
payment at the rate of 12%. “Late Charge” means, in respect of any such payment,
the greater of (a) $200.00 or (b) 5% of such payment, plus, in respect of any
such payment that Tenant fails to pay to Landlord for more than 30 days after
such payment is due, the amount calculated by adding the Late Charge to such
payment and applying the Late Charge to the increased amount of such payment
(which calculation shall be repeated for each additional increment of 30 days
after which Tenant fails to pay to Landlord such payment).

 

2.4 Security Deposit. Concurrently with Tenant’s execution of this Lease, Tenant
shall deposit with Landlord the Security Deposit. “Security Deposit” means cash
in the amount of $113,790.00. Landlord shall hold the Security Deposit as
security for Tenant’s full and faithful performance of all of the provisions of
this Lease, and not as an advance rental deposit or as a measure of Landlord’s
damages in case of Tenant’s default. If Tenant defaults under this Lease, then
Landlord may use or retain all or any portion of the Security Deposit for the
payment of any Rent in default, or for the payment of any amount that Landlord
may spend or become obligated to spend by reason of Tenant’s default, or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant’s default, whether foreseen, unforeseen, or unforeseeable. If
Landlord so uses or retains any portion of the Security Deposit, then Tenant
shall, within 30 days after Landlord’s demand therefor, deposit cash with
Landlord an amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep the Security Deposit separate
from Landlord’s general funds, and Tenant shall not be entitled to interest on
the Security Deposit. Tenant (for itself and all others claiming under Tenant)
hereby irrevocably waives and releases its rights under Section 1950.7 of the
California Civil Code, as the same may be amended from time to time, and any
similar or successor Law and agrees that (a) Landlord may also claim and apply
such sums reasonably necessary to compensate Landlord for any other loss or
damage, foreseeable or unforeseeable, caused by any act or omission of Tenant or
by any Tenant Parties and (b) if Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit, or any
balance thereof after the aforementioned agreed-upon deductions have been made,
shall be returned to Tenant within 60 days after the Termination Date.

 

ARTICLE 3
USE; HAZARDOUS MATERIALS

 

3.1 Use. Tenant shall use the Premises solely for the Permitted Use and shall
comply with all applicable Restrictions and the rules and regulations for the
Project as established and modified from time to time. “Permitted Use” means for
general office purposes (including, general business, post-production form work
and purposes incidental thereto) and for any other lawful purpose consistent
with uses permitted by comparable landlords of comparable space in comparable
first-class projects in the vicinity of the Project and for no other purpose
whatsoever. Tenant shall not do, or permit Tenant Parties to do, anything in or
about the Premises that in any way obstructs or interferes with the rights of
other tenants or occupants of the Project, or injures, annoys, or disturbs such
tenants or occupants. Tenant shall not use, or allow Tenant Parties to use, the
Premises for any improper, immoral, unlawful, or objectionable purpose. Tenant
shall not commit, or allow Tenant Parties to commit, any waste of the Premises.
Tenant shall not do, or permit Tenant Parties to do, anything on or about the
Premises that in any way increases the rate, or invalidates or prevents the
procuring, of any insurance protecting against loss or damage to any portion of
the Project or its contents, or against liability for damage to property or
injury to persons in or about any portion of the Project. “Tenant Parties” means
Tenant’s agents, contractors, employees, customers, licensees, invitees,
assignees, and subtenants.

 

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3.2 Hazardous Materials. Tenant shall not, and shall not permit Tenant Parties
to, at any time, handle, use, manufacture, store, or dispose of Hazardous
Materials in or about any portion of the Project. Notwithstanding the foregoing,
Tenant may handle, use, store, and dispose of products containing small
quantities of Hazardous Materials (e.g., aerosol cans containing insecticides,
toner for copiers, paints, paint remover) to the extent customary and necessary
for the Permitted Use; provided that Tenant shall always handle, use, store, and
dispose of such products in a safe manner and in compliance with Restrictions
and shall never allow such products to contaminate any portion of the Project.
“Hazardous Materials” means flammables, explosives, corrosive materials,
radioactive materials, materials capable of emitting toxic fumes, hazardous
wastes, toxic wastes or materials, and other similar substances, petroleum
products and derivatives, and any substance subject to regulation by or under
any Laws relating to the protection of the environment or the keeping, use,
transportation, or disposition of environmentally hazardous materials,
substances, or wastes, all amendments to any of them.

 

ARTICLE 4
ALTERATIONS

 

4.1 Alterations.

 

4.1.1 General Prohibition. Except as otherwise provided in this Lease, Tenant
shall not make or allow to be made any Alterations without the prior written
consent of Landlord, which may be given, conditioned, delayed or withheld in
Landlord’s sole discretion. “Alterations” means any alterations, additions, or
improvements to the Premises, including the attachment of any fixtures or
equipment in, on, or to any part of the Premises. If Tenant requests Landlord’s
consent to any Alterations, then, if requested by Landlord, Tenant shall give to
Landlord complete plans and specifications for such Alterations. Landlord’s
approval of any Alterations (and the plans and specifications for such
Alterations) shall not constitute Landlord’s express or implicit covenant or
warranty that such Alterations or such plans and specifications are safe or that
the same comply with all Restrictions.

 

4.1.2 Requirements. If Landlord consents to any Alterations, then in addition to
any other conditions Landlord may impose (a) Tenant shall contract for the
performance of such Alterations with a contractor approved by Landlord,
(b) Tenant shall cause all Alterations to be constructed free of all liens, in
accordance with all Restrictions and with the provisions of Landlord’s current
version of the “Tenant Improvement Building Standards” (a copy of which Landlord
shall give to Tenant upon Tenant’s request therefor), (c) Tenant provide
assurance that it will pay the costs of the Alterations and that Landlord and
the Project will be protected against any loss from any mechanic’s,
materialmen’s, or other liens, which assurances Landlord may require to be in
the form of surety company performance bonds or funded construction escrows, and
(d) prior to the commencement of the construction of any Alterations, Tenant
shall give to Landlord evidence of the insurance required by Section  7.2.4.

 

4.1.3 Fees & Costs. Landlord shall charge Tenant a construction management fee
equal to 5% of the cost of any Alterations to cover Landlord’s overhead as it
relates to such Alterations. Tenant shall reimburse Landlord for all third-party
costs actually incurred by Landlord in connection with any Alterations.

 

4.1.4 Completion. Upon the completion of any Alterations, (a) Tenant shall
timely cause to be recorded a Notice of Completion in respect of such
Alterations in the office of the Recorder of the County of Los Angeles in
accordance with Section 3093 of the California Civil Code, and Tenant shall give
to Landlord a conformed copy of such Notice of Completion and (b) Tenant shall
give to Landlord a reproducible copy of “as-built” drawings of such Alterations.

 

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4.1.5 Ownership of Alterations. Any Alterations that are paid for by Landlord
(“Landlord Alterations”) shall belong to Landlord, subject to Landlord’s right
to require removal thereof in accordance with Section 5.2.2. Any Alterations
that are paid for by Tenant (“Tenant Alterations”) shall belong to Tenant until
the Termination Date, at which time Tenant’s Alterations shall belong to
Landlord, subject to Landlord’s right to require removal thereof in accordance
with Section 5.2.3.

 

4.2 Tenant Security System. Tenant shall have the right, at its sole cost and
expense, to install its own access card system or other security system approved
by Landlord in its reasonable discretion at the entry to the Premises; provided
that Landlord shall have the right to retain and use all access cards, keys or
other access codes or devices to all locks within and into the Premises.

 

4.3 Directory Board. Landlord shall list Tenant’s name (and if Tenant requests,
the names of up to 50 of Tenant’s employees or departments (or a combination of
both) in the electronic tenant directory in the main lobby of the Building.

 

4.4 Existing Exterior Signage. Subject to the terms and conditions set forth
below, Tenant shall have the right (but not the obligation) to allow the
following signage previously installed by MVF to remain in place or to replace
such signage: (a) the rooftop sign (“Tenant’s Rooftop Sign”), (b) the panels on
the Building’s monument (“Tenant’s Panels”) and (c) the eyebrow signage
(“Tenant’s Eyebrow Signage”) (the Tenant’s Rooftop Sign, Tenant’s Eyebrow
Signage and Tenant’s Panels are collectively be referred to as “Tenant’s
Exterior Signage”). Tenant’s right to use Tenant’s Exterior Signage is subject
to Tenant’s compliance with all Laws in effect from time to time. Tenant shall
be responsible for all costs and expenses associated with the operation,
maintenance, insurance, repairs and replacement of Tenant’s Exterior Signage.
Without limiting the foregoing, Tenant shall reimburse Landlord as Additional
Rent within 30 days of demand by Landlord for any utility charges, and hook-up
allocable to Tenant’s Exterior Signage. Notwithstanding the foregoing,
(i) Tenant shall have the right to use Tenant Panels and the Tenant’s Eyebrow
Signage as provided above only for so long as Tenant has a lease agreement for,
and occupies, at least 37,930 rentable square feet of space at the Project,
exclusive of the Temporary Suites, and (ii) Landlord shall have the right to
terminate and remove Tenant’s Roof Top Signage at any time during the Term on
not less than 15 days prior Notice to Tenant. Landlord shall be responsible for
the costs of removing Tenant’s Roof Top Signage and any damage caused by such
removal. Upon the termination of this Lease or earlier termination of Tenant’s
right to use Tenant’s Panels and Eyebrow Signage, Tenant shall remove Tenant’s
Panels and Tenant’s Eyebrow Signage, shall repair any damage caused by such
removal and by the initial installation thereof. In no event shall Tenant’s
Exterior Signage rights be separated in any way from this Lease.

 

ARTICLE 5
REPAIR AND MAINTENANCE

 

5.1 Landlord’s Obligations. Landlord shall repair and maintain the common areas
and the structural portions of the Building, including the Base Building
Systems, to keep same in good condition. “Base Building Systems” means the base
plumbing, fire life-safety, mechanical, and electrical systems of the Building.
Landlord shall not be liable for any failure to perform any repair or
maintenance unless such failure persists for an unreasonable time after Tenant
gives to Landlord Notice of the need for such repair or maintenance. Landlord
shall not be liable for any damages caused to Tenant by performance of
Landlord’s repair and maintenance obligations, and Tenant shall not be entitled
to any abatement of Rent in connection therewith. Tenant (for itself and all
others claiming through Tenant) hereby irrevocably waives and releases its
rights to perform repairs or maintenance at Landlord’s expense under
Sections 1941 and 1942 of the California Civil Code or any similar or successor
Law, as the same may be amended.

 

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5.2 Tenant’s Obligations.

 

5.2.1 Repair and Maintenance. Tenant shall repair and maintain the Premises to
keep same in good condition and consistent with the appearance of other similar
facilities of comparable age and size in the vicinity. Tenant shall contract for
the performance of repairs and maintenance in the Premises with licensed and
reputable contractors of Tenant’s choosing if approved in writing by Landlord.
If Tenant fails to so repair and maintain the Premises, then, upon 10 days’
Notice, Landlord may do so on Tenant’s behalf, and Tenant shall reimburse
Landlord for the cost thereof, plus an administrative fee of 5% of such costs.

 

5.2.2 Janitorial Service. Each Expense Year during the Term Tenant shall have
the right to elect to provide its own Building standard janitorial service for
the Premises, including for the Temporary Suites (if applicable). If Tenant so
elects, Landlord shall credit Tenant on a monthly basis against Expenses an
amount equal to 1/12th of the Janitorial Credit for such Expense Year. Before
the first day of each Expense Year after the Base Year, Landlord shall give
Tenant Landlord’s determination of the Janitorial Credit Tenant would be
entitled to receive from Landlord if it were to elect to provide its own
janitorial services for the Premises during such Expense Year. Tenant shall have
15 days after receipt of such determination to elect by Notice to Landlord
whether or not to provide its own Building standard janitorial service for the
Premises during such Expense Year. The amount of the Janitorial Credit for each
Expense Year shall be determined by Landlord in Landlord’s discretion based upon
the cost of the janitorial services that would otherwise be provided by Landlord
during such Expense Year. Tenant has elected to provide its own janitorial
services for the Premises and the Second Floor Space during the Base Year and
will be entitled to a Janitorial Credit of $3,815 per month for the remaining
portion of the Base Year.

 

5.2.3 Condition of Premises on Surrender. Except as otherwise provided in this
Section 5.2, upon the Termination Date, all Alterations, whether Landlord
Alterations or Tenant Alterations, shall belong to Landlord without
compensation, and title shall pass to Landlord under this Lease. On the
Termination Date, Tenant shall give Landlord possession of the Premises,
together with all such Alterations, in the same condition as when received or
first installed, broom clean and free of all debris, excepting only ordinary
wear and tear and damage that Tenant is not required to repair or restore under
this Lease. Notwithstanding the foregoing, if Landlord so elects by Notice given
to Tenant prior to the Termination Date, then on or prior to the Termination
Date Tenant shall remove any Alterations designated in such Notice and repair
any damage caused by such removal. On or prior to the Termination Date Tenant
shall also remove all of Tenant’s furniture, furnishings, electronic data
processing equipment, and other equipment, and movable partitions of less than
full height from floor to ceiling and other personal property (collectively, the
“Personalty”) and trade fixtures, including all communications or computer
wires, cables, fibers and connections, whether inside walls, under any raised
floor or above any ceiling. All of Tenant’s Personalty and trade fixtures not so
removed by Tenant, may be removed from the Premises by Landlord and stored, at
Tenant’s sole risk and expense and in any event, Landlord shall not be
responsible for the value, preservation, or safekeeping thereof. Tenant shall
pay to Landlord, upon demand, all expenses so incurred by Landlord, including
the cost of repairing any damage caused by removal and storing such Personalty
and/or trade fixtures. Any such Personalty and trade fixtures not claimed by
Tenant within 30 days after Tenant’s surrender of the Premises shall, at
Landlord’s option, be deemed either abandoned or conveyed by Tenant to Landlord
under this Lease without further payment or credit by Landlord to Tenant.

 

5.2.4 Generation and Supplemental Cooling.

 

(a) Tenant represents and warrants that it is the owner of the above-ground
emergency diesel generator (together with any equipment, wiring, cabling and
conduit required in connection therewith, the “Generator”) and the supplemental
heating, ventilation and air conditioning system (the “Supplemental HVAC”)
previously installed at the Project by MVF, which Generator and Supplemental
HVAC (collectively, the “Supplemental Equipment”) exclusively serve the first
and second floors of the Building. Upon Tenant’s execution of this Lease, Tenant
shall provide to Landlord with reasonable evidence showing that Tenant is the
current owner of the Supplemental Equipment and that all applicable permits for
the operation of the same have transferred from MVF to Tenant.

 

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(b) Landlord and Tenant shall work together in good faith to establish an
equitable manner in which to allocate the costs and expenses associated with the
operation, maintenance, insurance, repair and replacement of the Supplemental
Equipment. Notwithstanding the foregoing, after Tenant vacates the Second Floor
Space, as described in Section 3 of the Addendum, to the extent the Supplemental
Equipment continues to serve the second floor of the Building, Landlord shall be
responsible for that portion of the costs and expenses associated with the
operation and maintenance of the Supplemental Equipment that are attributable to
the second floor of the Building, as determined by Landlord in its sole but good
faith discretion.

 

(c) Not less than 12 months prior to the expiration of the Term Landlord shall
provide Notice to Tenant (the “Supplemental Equipment Notice”) advising Tenant
whether upon the expiration of the Term Tenant will be required to leave the
Supplemental Equipment in place or remove it and to restore the Building and
Project to the condition that existed prior to the installation of the
Supplemental Equipment, normal wear and tear excepted. If Tenant does not
receive the Supplemental Equipment Notice Tenant shall provide Notice to
Landlord requesting that Landlord provide it and Landlord shall have 30 days
after receipt of such Notice to do so. If Landlord does not require Tenant to
remove the Supplemental Equipment pursuant to the provisions hereof, then upon
expiration of the Term the Supplemental Equipment shall, without payment by
Landlord, become the property of Landlord and Tenant shall cause all applicable
permits for the operation of the same to be transferred to Landlord. If Landlord
requires the Supplemental Equipment to be removed and Tenant fails to do so
prior to the expiration of the Term, then Landlord may, after 30 days’ Notice to
Tenant, remove the Supplemental Equipment at Tenant’s expense (without limiting
Landlord’s other remedies available under this Lease or applicable Laws).

 

5.3 Tenant's Right to Make Repairs. If Tenant provides Notice to Landlord of an
event or circumstance which (i) requires the action of Landlord with respect to
repairs and/or maintenance to the Premises which Landlord is expressly required
under this Lease to provide, maintain or repair and (ii) poses a material danger
to people or property located in the Premises, and Landlord fails to provide
such action as required by the terms of this Lease within thirty (30) days after
receipt of such Notice (or such longer period of time if the nature of such
action is such that the same cannot reasonably be completed within a thirty (30)
day period, provided Landlord has diligently and continuously commenced such
action within such period and thereafter diligently proceeds to complete said
action as soon as possible), then Tenant may proceed to take the required action
upon delivery of an additional three (3) business day Notice to Landlord
specifying that Tenant is taking such required action, unless Landlord commences
such required action within such three (3) business day period. In connection
with the foregoing, Tenant shall be entitled to reimbursement by Landlord within
thirty (30) days after request by Tenant for Tenant's reasonable costs and
expenses actually incurred by Tenant in taking such action plus ten percent
(10%) interest during the period from the date such costs and expenses are due
until such time as payment is made by Landlord. Notwithstanding the foregoing,
in the event of a bona fide emergency (i.e., imminent peril to persons or
significant property), the thirty (30)-day period set forth above shall be
reduced to 24 hours (or such longer period of time as is reasonable under the
circumstances), and no second Notice shall be required; provided, however, in no
event shall such emergency repairs or other action exceed what is reasonably
required to end the pending emergency. Further, if Landlord fails to reimburse
Tenant as required above, then within ten (10) days after receipt of Notice by
Tenant, unless Landlord is in good faith contesting the necessity of such
repairs or the amounts contained in Tenant's invoice and has given Tenant Notice
of such good faith contest, Tenant shall be entitled to deduct from Rent payable
by Tenant under this Lease, until the amount set forth in such invoice (together
with the ten percent (10%) interest) has been fully paid.

 

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ARTICLE 6
ASSIGNMENT AND SUBLETTING

 

6.1 General Prohibition on Transfers.

 

6.1.1 Transfers Generally. Tenant shall not, directly or indirectly, make a
Transfer, except in accordance with this Article 6, without the prior written
consent of Landlord, such consent not to be unreasonably withheld, and any
purported Transfer that does not comply with the provisions of this Article 6
shall be void.

 

6.1.2 Defined Terms.

 

(a) “Transfer” means any assignment, pledge, mortgage, hypothecation,
encumbrance, lien attaching to, or other transfer of this Lease, or any sublet
or other transfer of any portion of the Premises, or any Interest Transfer, in
any case whether voluntarily, by operation of Law, or otherwise, or permitting
the Premises to be used or occupied by anyone other than Tenant.

 

(b) “Transferee” means the party to which a Transfer is made.

 

(c) “Interest Transfer” means if Tenant is a corporation, trust, partnership,
limited liability company or other entity, (a) the transfer of a Controlling
Interest in the voting stock, beneficial interest, partnership interests,
membership interests or other ownership interests therein (whether at one time
or in the aggregate) or (b) the sale, mortgage, hypothecation, or pledge of more
than 25% of Tenant’s net assets. Notwithstanding the foregoing, if Tenant is a
publicly traded company, no change of stock ownership of Tenant shall constitute
an Interest Transfer. A “Controlling Interest” means the effective control over
the management of such entity.

 

6.1.3 Consent Requests. If Tenant desires to assign this Lease, sublease all or
any part of the Premises, or effect an Interest Transfer, then Tenant shall give
to Landlord Notice thereof at least 30 days, but not more than 60 days, prior to
the proposed effective date of the Transfer, which Notice shall include (a) the
name and address of the proposed Transferee, (b) the relevant terms of the
Transfer, (c) copies of financial reports and other relevant financial
information for the proposed Transferee, (d) information regarding the nature of
the business the proposed Transferee intends to operate in the Premises and how
long the proposed Transferee has operated such business, (e) a draft of the
document to be used to effect the Transfer (the “Transfer Document”), and
(f) payment to Landlord of $1,000 as a transfer review fee. In addition to such
review fee, Tenant shall reimburse Landlord for all of Landlord’s costs,
including reasonable attorneys’ fees, incurred in investigating, considering,
reviewing, processing, and documenting any proposed Transfer, regardless of
whether Landlord shall consent or refuse consent thereto. Landlord may give,
condition, delay or withhold its consent to a Transfer in Landlord’s sole and
absolute discretion.

 

6.1.4 Recapture. Landlord shall have the option, in its sole discretion, (a) in
the event of any proposed assignment of this Lease or Transfer of the entire
Premises or, (b) in the case of a proposed Transfer of less than the entire
Premises, to terminate this Lease [in the case of a Transfer described in clause
(a)] to recapture the portion of the Premises proposed to be Transferred [in the
case of a Transfer described in clause (b)], as of the date the Transfer is to
be effective. The option shall be exercised by Landlord giving Tenant written
notice of its election to terminate this Lease or recapture the portion of the
Premises to be Transferred, as applicable, within 30 days following Landlord’s
receipt of Tenant’s notice requesting consent to the Transfer as required above.
If this Lease shall be terminated pursuant to this Section 6.1.4, the Term shall
end on the date stated in Tenant’s notice as the effective date of the Transfer
as if that date had been originally fixed in this Lease for the expiration of
the Term. If Landlord recaptures only a portion of the Premises, the Base Rent
and Expenses and Taxes payable pursuant to Section 2.2 shall abate
proportionately based on the proportion by which the approximate rentable square
feet of the remaining portion of the Premises shall be less than that of the
Premises as of the date immediately prior to such recapture. Tenant shall, at
Tenant’s own cost and expense, discharge in full any outstanding commission
obligation that may be due and owing as a result of any proposed Transfer,
whether or not the Premises are recaptured pursuant to this Section 6.1.4 and
rented by Landlord to the proposed Transferee or any other tenant.

 

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6.1.5 Transfer Premium. In the event of a Transfer, at Landlord’s option, Tenant
shall pay to Landlord as Additional Rent an amount equal to 50% of any Increased
Rent, less the Costs Component (the “Transfer Premium”), when and as such
Increased Rent is received by Tenant. As used in this Section, “Increased Rent”
shall mean the excess of (a) all rental and other consideration that Tenant is
entitled to receive by reason of any Transfer, over (b) the Rent otherwise
payable by Tenant under this Lease at such time. For purposes of the foregoing,
any consideration received by Tenant in form other than cash shall be valued at
its fair market value as determined by Landlord in good faith. The “Costs
Component” is that amount which, if paid monthly, would fully amortize on a
straight line basis, over the entire period for which Tenant is to receive
Increased Rent, the reasonable costs incurred by Tenant for third party market
rate leasing commissions and tenant improvements in connection with such
Transfer.

 

6.1.6 Reasonableness Standard. Notwithstanding any other provision hereof, it
shall be considered reasonable for Landlord to withhold its consent to any
Transfer if (a) the proposed Transferee is a person or an entity (i) with which
Landlord is already in negotiation; (ii) that is already an occupant of the
Building, unless Landlord is unable to provide the amount of space required by
such occupant; (iii) that is a governmental subdivision or agency or who enjoys
diplomatic or sovereign immunity; (iv) that is of a character, has a reputation
or is engaged in a business that is incompatible with the standards of Landlord
in the Building; or (v) that is not of reasonable financial strength in light of
the responsibilities to be undertaken in connection with the Transfer;
(b) payment for the Transfer is determined in whole or in part based upon the
Transferee’s net income or profits; (c) the Transfer would subject the Premises
to a use which would: (i) involve increased personnel or wear upon the Building,
such as a call center or trade school; (ii) violate any exclusive right granted
to another tenant of the Building or give a tenant of the Building a right to
cancel its lease; (iii) require any addition to or modification of the Premises
or any other portion of the Project in order to comply with applicable Law or
other governmental requirements; or (iv) involve a violation of Article 3 of
this Lease. Notwithstanding any contrary provision of Law, including, without
limitation, California Civil Code Section 1995.310, the provisions of which
Tenant hereby waives, Tenant shall have no right to terminate this Lease, in the
event Landlord is determined to have unreasonably withheld or delayed its
consent to a proposed Transfer.

 

6.1.7 Permitted Transfers. Notwithstanding anything to the contrary contained in
this Article 6, Tenant may assign its entire interest under this Lease or
sublease all or any portion of the Premises to: (i) a successor to Tenant by
purchase, merger, consolidation or reorganization or (ii) a transferee of
substantially all of the assets of Tenant or (iii) an Affiliate of Tenant,
without the consent of Landlord (each, a “Permitted Transfer”). For purposes of
this Lease, an “Affiliate” shall mean an entity that is controlled by, controls,
or is under common control with, Tenant. Tenant shall remain primarily liable
(jointly and severally with the Transferee) under the Lease following a
Permitted Transfer. Sections 6.1.4 and 6.1.5 shall not apply to a Permitted
Transfer.

 

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6.2 Conditions to Effectiveness. As conditions precedent to any Transfer
becoming effective and binding on Landlord:

 

(a) prior to the proposed effective date of the Transfer, Tenant shall give to
Landlord a copy of the fully executed Transfer Document, which shall (i) be in
form and substance reasonably acceptable to Landlord, and (ii) for an assignment
of this Lease, contain Transferee’s express assumption of Tenant’s obligations
under this Lease and waivers by Tenant, for the benefit of Landlord, of all
applicable suretyship defenses, including those contained in Sections 2787 to
2855, inclusive, of the California Civil Code;

 

(b) as of the proposed effective date of the Transfer, there shall exist no
Event of Default and Landlord shall not have given to Tenant any Notice of a
default that Tenant has not cured; and

 

(c) between the date on which Landlord gave to Tenant Landlord’s consent to the
proposed Transfer and the proposed effective date of the Transfer, there shall
have been no material adverse change in circumstances that would have allowed
Landlord to reasonably withhold Landlord’s consent to the proposed Transfer had
such change occurred prior to Landlord giving such consent.

 

6.3 Miscellaneous.

 

6.3.1 Notwithstanding any Transfer, permitted or otherwise, Tenant shall at all
times remain directly, primarily, and fully responsible and liable for the
payment of the Rent and for compliance with all of the other obligations to be
performed by Tenant under the terms, provisions, and covenants of this Lease. If
any Transferee defaults under this Lease, then Landlord may proceed directly
against Tenant without the necessity of exhausting remedies against such
Transferee.

 

6.3.2 Landlord may consent to subsequent Transfers, or amendments or
modifications to this Lease with Transferees, without notifying Tenant and
without obtaining Tenant’s consent, and no such consent by Landlord shall
relieve Tenant of liability under this Lease.

 

6.3.3 Upon the occurrence of an Event of Default, if all or any portion of the
Premises is then subject to one or more subleases, then Landlord, in addition to
any other remedies provided in this Lease or by Law, may collect directly from
the subtenants under such subleases all rents due and becoming due to Tenant
under such subleases and apply such rent against any sums due to Landlord from
Tenant under this Lease, and no such collection shall be construed to constitute
a novation or release of Tenant from the further performance of Tenant’s
obligations under this Lease.

 

ARTICLE 7
INDEMNIFICATION; INSURANCE

 

7.1 Indemnification. To the extent permitted by Laws, Tenant shall protect,
indemnify, and hold Landlord harmless from and against any and all Claims
incurred by reason of:

 

(a) any damage to any property (including the property of Landlord), or any
injury (including death) to any person, occurring in, on, or about any portion
of the Project, to the extent that such injury or damage shall be caused by, or
arise from, any actual or alleged act, neglect, fault, or omission by or of
Tenant or any Tenant Parties to meet any standards imposed by any duty with
respect to the injury or damage;

 

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(b) any Alterations, work, or other thing done by Tenant or any Tenant Parties
in or about any portion of the Project, or from transactions of Tenant
concerning any portion of the Project;

 

(c) Landlord’s withholding of consent to any Transfer;

 

(d) Tenant’s failure to comply with any Restrictions;

 

(e) any breach or default by Tenant of any representation, covenant or other
term of this Lease; or

 

(f) the failure of Tenant or any other occupant of the Premises to surrender to
Landlord possession of the Premises on the Termination Date in accordance with
this Lease; provided that Tenant shall not be obligated to so indemnify Landlord
to the extent any such matter arises from, or is caused by, the willful
misconduct or gross negligence of Landlord. “Claims” mean claims, demands,
losses, penalties, fines, liabilities, actions (including informal proceedings),
settlements, judgments, damages, costs, and expenses (including attorneys’ fees
and consultants’ fees, court costs, and other litigation expenses) of whatever
kind or nature, known or unknown, contingent or otherwise, incurred or suffered
by, or asserted against, the party in question.

 

7.2 Tenant Insurance.

 

7.2.1 Required Policies. Tenant shall obtain and keep in force throughout the
Term the following coverages in the following amounts:

 

(a) commercial general liability insurance on an “occurrence” basis on the
current ISO CG 00 01 occurrence form with a deductible reasonably acceptable to
Landlord, and with a combined single limit for bodily injury, death, property
damage for products and completed operations, contractual liability, personal
injury and advertising injury, in an amount reasonably satisfactory to Landlord,
but in no event less than $2,000,000.00;

 

(b) comprehensive automobile insurance on ISO form CA 00 01 covering owned,
non-owned and hired vehicles with a combined single limit of not less than
$1,000,000.00;

 

(c) worker’s compensation insurance with limits as required by Laws, and
employer’s liability insurance coverage with limits of $1,000,000.00 each
accident, $1,000,000.00 disease – each employee, and $1,000,000.00 – policy
limit;

 

(d) “Special Form” property insurance with no co-insurance, including vandalism
and malicious mischief, boiler and machinery comprehensive form, if applicable,
and endorsements for earthquake sprinkler damage, covering damage to or loss of
Tenant’s Personalty, and all Tenant’s Alterations in an amount equal to the full
replacement value thereof (without deduction for depreciation);

 

(e) business income insurance with extra expense insurance (ISO form CP 00 30)
in an amount not less than 12 months of income on an Actual Loss Sustained
basis;

 

(f) any such other insurance as Landlord’s lender may require or Landlord may
reasonably require.

 

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7.2.2 Requirements for Policies. The policies required under Section 7.2.1
shall:

 

(a) (i) with respect to the commercial general liability policy, name Landlord;
Walton WH Investors V, L.P.; Walton WH Holdings V, L.L.C.; Walton Street Real
Estate Investors V, L.P.; Walton Street Real Estate Fund V, L.P.; Walton Street
Real Estate Partners V, L.P.; Walton Street Managers V, L.P.; WSC Managers V,
Inc.; Walton Street Capital, L.L.C.; Landlord’s lender; Landlord’s property
manager; and/or any other persons or entities reasonably designated by Landlord,
as additional insureds using additional insurance endorsements CG 20 10 10 01
and 20 37 07 04, and (ii) with respect to the property insurance policy, name
Landlord and Landlord’s lender as loss payee;

 

(b) be issued by reputable, financially sound insurance companies admitted to do
business in the State of California with a Best’s Rating Guide rating of A-:VIII
or better at all times during which one or more policies issued by such
companies are being used to satisfy any of the requirements of Section 7.2.1;

 

(c) provide that such policies shall not be canceled unless 30 days’ notice
shall have been given to Landlord (except that 10 days’ notice of cancellation
for non-payment of premiums may be given);

 

(d) include coverage for liability assumed under an insured contract (including
the tort liability of another assumed in a business contract) with defense
provided in addition to policy limits and insure performance of Tenant’s
indemnity obligations set forth in this Lease, including the indemnity
obligations set forth in Section 7.1;

 

(e) provide that no act or omissions of Tenant shall affect or limit the
obligations of the insurer with respect to other insureds, including Landlord;

 

(f) provide that the proceeds of such insurance applicable to casualties
occurring during the Term shall be used to repair or replace Tenant’s Personalty
and Tenant Alterations, and to pay the Rent; and

 

(g) with respect to the commercial general liability policy, provide that (i)
coverage shall be primary and shall not include an endorsement or modification
that makes the commercial general liability policy excess over other available
insurance, (ii) Landlord, although an additional insured, shall nevertheless be
entitled to recovery under such policy for any damage to Landlord by reason of
acts or omissions of Tenant, and (iii) the coverage carried by Landlord shall be
noncontributory with respect to policies carried by Tenant.

 

7.2.3 Evidence of Insurance. Prior to taking possession of the Premises, Tenant
shall give to Landlord either a copy of each insurance policy required to be
obtained and maintained by Tenant in accordance with Section 7.2.1, or
certificate thereof issued by the insurance company on ACORD Form 25 as to
liability insurance, or on ACORD Form 28 as to property insurance showing such
policies in force, and a copy of the additional insured endorsements, and
thereafter Tenant shall give to Landlord renewal policies or certificates
meeting the requirements of this Section 7.2 at least 30 days prior to the
expiration date of each policy. Tenant shall, within a reasonable period of time
after Landlord’s request therefor, give to Landlord a certified copy of any and
all insurance policies required by this Lease.

 

7.2.4 Alterations. During the performance of any Alterations by Tenant, (a) the
insurance required under this Section 7.2 shall extend to all of Tenant’s
contractors (and subcontractors of any tier) and shall include injuries to
persons and damage to property arising in connection with such Alterations and
(b) Tenant shall also maintain such other insurance as Landlord may require,
including all-risk builder’s insurance. Tenant shall give to Landlord copies of
the policies of, or certificates evidencing, such insurance prior to commencing
construction of such Alterations.

 

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7.3 Waivers.

 

7.3.1 Tenant hereby waives all rights against Landlord for recovery of damages
to the extent that those damages are covered under Tenant’s insurance required
to be maintained under Sections 7.2.1(a), (b), (c) and (f) above, or which would
ordinarily have been covered by such insurance if Tenant had maintained such
insurance. Tenant shall obtain any special endorsements required by Tenant’s
insurers to effect compliance with this Section 7.3.1.

 

7.3.2 Each of Landlord and Tenant hereby waive all rights against the other for
recovery of damages to the extent that such damages are covered by any property
insurance related to the Premises, the Property or the Project, or which would
ordinarily have been covered by such insurance if the waiving party had
maintained the property insurance required to be maintained by it under this
Lease. If any property insurance policy implicated by this waiver does not allow
the insured to waive rights of recovery against others prior to a loss, the
insured shall cause such policy to be endorsed to provide this waiver.

 

7.3.3 Landlord shall not be liable to Tenant, and Tenant hereby waives all
Claims against Landlord for any damage to or loss of property in or about any
portion of the Project by or from any cause whatsoever, except to the extent
caused by or arising from the gross negligence or willful misconduct of
Landlord.

 

ARTICLE 8
SERVICES AND UTILITIES

 

8.1 Basic Services.

 

8.1.1 Basic Services. Landlord shall furnish to the Premises during Business
Hours on Business Days the following services and utilities:

 

(a) water suitable for normal office use;

 

(b) heat, ventilation, and air-conditioning as required in Landlord’s reasonable
judgment for the use and occupancy of the Premises;

 

(c) Intentionally omitted;

 

(d) elevator service; and

 

(e) electricity for normal office use.

 

8.1.2 Defined Terms.

 

(a) “Business Hours” means 8:00 a.m. until 6:00 p.m. on weekdays and 9:00 a.m.
until 1:00 p.m. on Saturdays.

 

(b) “Business Days” means all days other than Sundays and all federal and State
of California holidays.

 

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8.2 Additional Services. If Tenant requires any services or utilities in
addition to those provided in accordance with Section 8.1, then Landlord shall
have the exclusive right to furnish such additional services or utilities, and
Tenant shall pay to Landlord the Building standard charge therefor. Tenant shall
not contract with any utility provider to service the Premises, that is not then
providing such service to other tenants in the Building.

 

8.3 Excess Use.

 

8.3.1 If Tenant installs equipment in the Premises that affects the temperature
otherwise maintained by the air-conditioning system, or if Tenant allows
occupancy of the Premises by more persons than the air-conditioning system is
designed to accommodate, then, in either case, Landlord may install, operate,
and maintain supplemental air-conditioning units in, or for the benefit of, the
Premises, and Tenant shall pay to Landlord the cost thereof.

 

8.3.2 Tenant shall not use any unit of equipment in the Premises that would use
electric current in excess of 2000 watts and/or 20 amps or 120 volts, or that
would increase the amount of electricity or water usually furnished or supplied
for use in the Premises for normal office use. Tenant shall not connect any
equipment with electric current except through electrical outlets in the
Premises existing as of the Commencement Date.

 

8.3.3 Landlord may charge Tenant for any quantity of utilities consumed by
Tenant beyond amounts customarily consumed in the Premises for normal office use
and for costs of sanitary sewer or trash removal arising from Tenant’s excessive
consumption of such services. The parties acknowledge that Tenant’s anticipated
electrical consumption will exceed amounts of electricity customarily consumed
in the Premises for normal office use. Without limiting the first sentence of
this paragraph, Tenant and Landlord shall establish a monthly charge for
Tenant’s disproportionate electrical consumption at the Premises (the “Monthly
Additional Power Charge”). Once established, Tenant will be billed for such
consumption on a monthly basis and upon establishment of the Monthly Additional
Power Charge, Tenant shall remit payment for its excess power consumption
applicable to the period between the Commencement Date and the establishment of
the Monthly Additional Power Charge. The Monthly Additional Power Charge shall
be adjusted periodically to take into account changes in rates charged by the
local utility company for power consumption. Additionally, either Tenant or
Landlord may on one occasion per each 12-month period during the Term request an
updated estimate of Tenant’s disproportionate electrical consumption based on a
change in circumstances applicable to Tenant’s power consumption. The parties
will thereafter work together in good faith to determine if any adjustments to
the Monthly Additional Power Charge are warranted. There shall be no mark-up
over rates charged by the utility provider on after-hours HVAC or with respect
to excess power consumption charges. All revenue collected for after-hours HVAC
shall be used to reduce Expenses. With respect to the foregoing, Landlord and
Tenant desire to minimize costs and wasted resources. Accordingly, the parties
will act together in an environmentally sensitive manner to minimize costs and
wasted resources.

 

8.4 Liability for Interruption. In the absence of Landlord’s gross negligence or
willful misconduct, Landlord shall not be liable for, and Tenant shall not be
entitled to, any abatement or reduction of Rent by reason of Landlord’s failure
to furnish any service or utility; provided that Landlord shall not be liable
for such failure to the extent such failure is caused by Force Majeure. “Force
Majeure” means fire, earthquake, explosion, flood, hurricane, inclement weather,
acts of God or public enemy, national or state emergency, war, invasion,
insurrection, rebellion, riots, labor strikes or lockouts, inability to obtain
labor or materials or reasonable substitutes, governmental acts, restrictions
(including energy usage restrictions), regulations or controls, or by any other
cause, whether similar or dissimilar, beyond the reasonable control of Landlord.
Landlord shall use commercially reasonable efforts to remedy any interruption in
the furnishing of services or utilities.

 

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8.5 Parking.

 

8.5.1 Tenant’s Rights. During the Term, Tenant shall have the right to purchase,
on a monthly basis, up to 250 parking passes for the Parking Facilities on the
terms, and subject to the conditions, set forth in the parking agreement
attached hereto as Exhibit D between Tenant and the operator of the Parking
Facilities. Tenant shall pay to Landlord the monthly parking charges for the
first full calendar month of the Term prior to or concurrently with Tenant’s
execution of this Lease.

 

8.5.2 Liability. To the fullest extent permitted by Laws, Landlord shall have no
liability for any loss or damage to property or other items located in the
Parking Facilities (including any loss or damage to the automobiles of Tenant or
any Tenant Parties, or the contents thereof due to theft, vandalism, or
accident) or for any personal injuries or death arising out of the use of the
Parking Facilities, whether or not such loss, damage, injury, or death results
from Landlord’s active negligence or negligent omission. The limitation on
Landlord’s liability under the preceding sentence shall not apply, however, to
loss or damage, injury, or death arising directly from Landlord’s willful
misconduct. Landlord shall not be liable for Claims arising through acts or
omissions of any operator of the Parking Facilities. Tenant, on its own behalf
and on behalf of all others claiming through Tenant, hereby voluntarily
releases, discharges, waives, and relinquishes any and all actions or causes of
action for personal injury, death, or property damage occurring to Tenant or any
Tenant Parties arising as a result of parking in the Parking Facilities, or any
activities incidental thereto, wherever or however the same may occur. Tenant
agrees to look first to Tenant’s insurance carrier and to require that all
Tenant Parties look first to their respective insurance carriers for payment of
any losses or damages sustained, or personal injuries or death, in connection
with any use of the Parking Facilities.

 

ARTICLE 9
THIRD PARTIES

 

9.1 Subordination. This Lease shall be automatically subject and subordinate at
all times to the lien of any mortgages or deeds of trust on, against, or
affecting any portion of the Project, or Landlord’s interest or estate in any
portion of the Project, whether this Lease was executed before or after said
instrument, and to all renewals, modifications, consolidations, replacements,
and extensions thereof (each, a “Mortgage”); provided that if the holder or
trustee of any Mortgage (each, a “Mortgagee”) elects to have this Lease be
superior to such Mortgage, then, by Notice given to Tenant, this Lease shall be
deemed superior. Tenant shall execute and deliver to Landlord, within 10 days
after Landlord’s request therefor, such further commercially reasonable
instruments evidencing such subordination or superiority as may be required by
Landlord.

 

9.2 Attornment. In the event of the foreclosure of, or exercise of the power of
sale under, any Mortgage, or in the event of a deed given in lieu of
foreclosure, then (a) upon the request of the purchaser in such foreclosure or
sale, or the grantee under such deed in lieu (any such party, the “New Owner”),
Tenant shall attorn, without any deductions or setoffs whatsoever, to the New
Owner and recognize the New Owner as the Landlord under this Lease; (b) upon the
request of the New Owner, Tenant shall enter into a new lease, containing all of
the terms and provisions of this Lease, with the New Owner for the remaining
Term, or at the election of the New Owner, this Lease shall automatically become
a new lease between Tenant and the New Owner upon the terms and provisions of
this Lease for the remaining Term, and Tenant shall confirm such attornment and
new lease in writing within 10 days after the New Owner’s request therefor;
(c) the New Owner shall not be liable for any act or omission of Landlord under
this Lease occurring prior to the New Owner stepping into the shoes of Landlord,
nor for the return of the Security Deposit (except to the extent that the
Security Deposit has actually been transferred to the New Owner); and (d) the
New Owner shall not be bound by any modification of this Lease or any previous
payment of more than one month of Base Rent that was not consented to by the New
Owner. Tenant waives the provisions of any Laws that may give or purport to give
to Tenant any right to terminate or otherwise adversely affect this Lease or the
obligations of Tenant under this Lease in the event of any foreclosure, sale or
deed in lieu of foreclosure.

 

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9.3 Mortgagee’s Right to Cure. Notwithstanding anything to the contrary in this
Lease, before exercising any right (a) of offset, counterclaim, reduction,
deduction, or abatement against Tenant’s payment of Rent under this Lease or
(b) to terminate the Lease or to claim a partial or total eviction, in each case
arising from Landlord’s default under this Lease, (i) Tenant shall provide to
each Mortgagee whose name and address has been furnished in writing to Tenant
with notice of the default by Landlord giving rise to same, and (ii) after such
Mortgagee receives such notice, such Mortgagee shall have a period of
thirty (30) days beyond the period of time available to Landlord under the Lease
in which to cure the default. Such Mortgagee shall have no obligation to cure
(and shall have no liability or obligation for not curing) any default by
Landlord. In addition, as to any default by Landlord the cure of which requires
possession and control of the Project, provided that such Mortgagee undertakes
by written notice to Tenant to exercise reasonable efforts to cure or cause to
be cured by a receiver such default within the period permitted by this
Section 9.3, such Mortgagee’s cure period shall continue for such additional
time as such Mortgagee may reasonably require to either: (A) obtain possession
and control of the Project with due diligence and thereafter cure the default
with reasonable diligence and continuity; or (B) obtain the appointment of a
receiver and give such receiver a reasonable period of time in which to cure the
default.

 

9.4 Sale of the Project. If Landlord sells or conveys the Project, such sale or
conveyance shall release Landlord from any liability from and after such sale or
conveyance upon any of the covenants or conditions, expressed or implied,
contained in this Lease in favor of Tenant, and in such event, Tenant agrees to
look solely to the successor-in-interest of Landlord in and to this Lease.
Except as set forth in this Section 9.4, this Lease shall not be affected by any
such sale or conveyance and Tenant agrees to attorn to the purchaser or
assignee. Landlord shall transfer or deliver the Security Deposit to Landlord’s
successor-in-interest and thereupon Landlord shall be discharged from any
further liability with regard thereto.

 

9.5 Estoppel Certificates. Within 10 days after Landlord’s request, Tenant shall
execute and deliver to Landlord and any of Landlord’s then existing or
prospective lenders, investors, or purchasers of any portion of the Project, a
certificate substantially in the form attached as Exhibit C, or in such other
form and containing such other information as Landlord or any such lenders,
investors, or purchasers, may reasonably require. Any certificate delivered in
accordance with this Section 9.5 may be relied upon by any such lender,
investor, or purchaser.

 

9.6 Liens. Tenant shall immediately discharge (either by payment or by filing of
the necessary bond or otherwise) any mechanic’s, materialman’s or other lien or
encumbrance against any portion of the Project that arises out of any payment
due for, or purported to be due for, any labor, services, materials, supplies or
equipment alleged to have been furnished to or for Tenant. If Tenant shall fail
to so discharge such lien or encumbrance then, in addition to any other right or
remedy of Landlord, Landlord may discharge the same (either by payment or by
filing of the necessary bond or otherwise), and any payment, costs and expenses
incurred by Landlord in connection therewith, including reasonable attorneys’
fees, shall be repaid together with interest thereon at the rate set forth in
Section 2.3 from the date of payment.

 

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ARTICLE 10
EVENTS OF DEFAULT & REMEDIES

 

10.1 Events of Default.

 

10.1.1 Events of Default. “Event of Default” means any of the following:

 

(a) Tenant fails to pay when due any Rent, and such failure continues for 5 days
after Landlord gives to Tenant Notice thereof (but if Landlord gives to Tenant
any such Notice twice in the 12-calendar-month period commencing with the
calendar month in which the date of such first Notice occurs, then Tenant’s
failure thereafter to pay when due any Rent during such period shall be an Event
of Default without Notice);

 

(b) except as otherwise provided in this Lease, Tenant fails to comply with any
term, provision, or covenant of this Lease and such failure continues for 30
days after Landlord gives to Tenant Notice thereof (but if such failure is
curable but cannot reasonably be cured during such 30-day period, and if Tenant
has commenced such cure promptly and in any case within such 30-day period and
thereafter has diligently pursued such cure to completion, then such 30-day
period shall be extended to 90 days);

 

(c) Tenant fails to obtain and keep in force at all times any insurance required
under this Lease, and such failure continues for 5 days after Landlord gives to
Tenant Notice thereof;

 

(d) Tenant fails to deliver to Landlord timely any instrument or assurance
required under this Lease;

 

(e) breach of any of the representations or warranties of Tenant set forth in
this Lease; or

 

(f) Tenant’s failure to restore the Security Deposit within the 5-day period set
forth in Section 2.4 above.

 

10.1.2 Waivers. Tenant waives the notice requirements of California Code of
Civil Procedure Section 1162 that would otherwise govern notices required under
Section 1161, and agrees that any Notice that Landlord gives to Tenant in
accordance with this Lease shall replace and satisfy any such requirements of
Section 1162 and any similar or successor Law, as the same may be amended.

 

10.2 Remedies.

 

10.2.1 Upon Event of Default. Upon the occurrence of any Event of Default,
Landlord shall have the option to pursue any one or more of the following
remedies without any Notice or demand whatsoever, concurrently or consecutively
and not alternatively (in addition to any other remedies available to Landlord
at law or in equity), all of which remedies shall be distinct, separate and
cumulative:

 

(a) Termination. Landlord may terminate this Lease, in which event Tenant shall
vacate the Premises immediately and deliver possession of the Premises to
Landlord, and if Tenant fails to do so, then Landlord may, after due process of
law, enter upon and take possession of the Premises, and expel or remove Tenant
and any other person who may be occupying the Premises or any portion thereof,
without being liable for prosecution or any claim or damages therefor, and
Landlord may recover from Tenant all of the following:

 

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(i) the worth at the time of award of the unpaid Rent that has been earned at
the time of termination; plus

 

(ii) the worth at the time of award of the amount by which the unpaid Rent that
would have been earned after the termination until the time of the award exceeds
the amount of lost Rent that Tenant proves could have been reasonably avoided;
plus

 

(iii) the worth at the time of award by which the unpaid Rent for the balance of
the Term after the time of award exceeds the amount of such lost Rent Tenant
provides could be reasonably avoided; plus

 

(iv) such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by Laws; plus

 

(v) any other amount necessary to compensate Landlord for all of the detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease, or that in the ordinary course would be likely to result therefrom.

 

“Worth at the time of award” of the amounts set forth in Sections 10.2.1(a)(i)
and (ii) shall be computed by allowing interest at a rate per annum equal to the
lesser of (1) the annual “Bank Prime Loan” rate cited in the Federal Reserve
Statistical Release Publication H.15(519), published weekly plus 200 basis
points, or (2) the highest rate permitted by Law. “Worth at the time of award”
of the amount set forth in Section 10.2.1(a)(iii) shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco, California at the time of award plus 100 basis points.

 

(b) Subleases of Tenant. Whether or not Landlord elects to terminate this Lease,
Landlord may terminate any and all subleases or other consensual arrangements
for possession or occupancy of the Premises entered into by Tenant or any
subtenant of Tenant, or may succeed to Tenant’s or Tenant’s subtenant’s interest
in such subleases or other arrangements. If Landlord elects to succeed to
Tenant’s or Tenant’s subtenant’s interest in any such subleases or other
arrangements, then as of the date of Notice by Landlord of such election
(i) Tenant shall have no further right to, or interest in, the rent or other
consideration receivable thereunder, and (ii) any sublessee or other occupant of
the Premises shall attorn to and recognize Landlord as its landlord.

 

10.2.2 Form of Payment Following Event of Default. Following the occurrence of
an Event of Default, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord under this Lease, whether relating
to the Event of Default in question or otherwise, be paid in the form of money
orders, cashier’s checks, or certified checks drawn on institutions acceptable
to Landlord, or by other means approved by Landlord, notwithstanding any prior
acceptance by Landlord of payments from Tenant in any different form.

 

10.2.3 Landlord’s Cure Rights. If Tenant defaults under this Lease, then
Landlord may, without being under any obligation to do so, and without thereby
waiving such default, remedy such default for the account of Tenant. Tenant
shall reimburse Landlord for all costs, expenses, and disbursements that
Landlord incurs in so remedying such default, plus interest from the date of
expenditure by Landlord at the rate set forth in Section 2.3.

 

10.2.4 Mitigation of Damages. Except as required by Laws, Landlord shall have no
obligation to mitigate its damages. If Landlord is required by Laws to mitigate
its damages under this Lease, then (a) Landlord shall be required only to use
reasonable efforts to so mitigate, which shall not exceed such efforts as
Landlord generally uses to lease other space in the Building; (b) Landlord shall
not be deemed to have failed to so mitigate if Landlord leases any other
portions of the Building before reletting the Premises; and (c) Landlord’s
failure to so mitigate shall only reduce the Rent to which Landlord is entitled.
Tenant acknowledges that Landlord’s rejection of a prospective replacement
tenant based on an offer of rentals below Landlord’s published rates for new
leases of comparable space at the Building at the time in question, or
containing terms less favorable than those contained herein, shall not give rise
to a claim by Tenant that Landlord failed to so mitigate.

 

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10.2.5 Waiver of Right of Redemption. Tenant (for itself and all others claiming
through Tenant) irrevocably waives and releases any rights under any Laws now or
hereafter existing (including Sections 473, 1174(e), and 1179 of the California
Code of Civil Procedure and Section 3275 of the California Civil Code) to redeem
or reinstate this Lease or Tenant’s right of occupancy of the Premises after
termination of this Lease under any Laws.

 

ARTICLE 11
CASUALTY & CONDEMNATION

 

11.1 Casualty.

 

11.1.1 Obligations to Rebuild. If the Premises and/or any other portion of the
Project is damaged or destroyed, then (a) this Lease shall continue in full
force and effect, (b) unless Landlord elects to terminate this Lease in
accordance with Section 11.1.2 Landlord shall promptly and diligently repair or
restore the Premises (but only to the extent of the shell of the Premises and
any Landlord Alterations) and (c) Tenant, at its sole cost and expense, shall
replace or fully repair all Tenant’s Personalty and all Tenant Alterations.

 

11.1.2 Right to Terminate. Landlord may terminate this Lease if any portion of
the Project is destroyed or damaged, regardless of whether the casualty is
insured, if Landlord reasonably determines that (a) there are insufficient
insurance proceeds available to Landlord to pay all of the costs of the repair
or restoration of the Project, (b) the repair or restoration of the Project
cannot be completed within 180 days after the date of the casualty, (c) Landlord
is not permitted by any Restriction to rebuild the Project in substantially the
same form as existed prior to the damage or destruction, or (d) the damage is
substantial or the Premises or any other portion of the Project is destroyed and
there are fewer than 12 full calendar months remaining in the Term. If Landlord
desires to so terminate this Lease, then Landlord shall give to Tenant Notice of
such termination within 45 days after the date of the casualty, in which event
the Termination Date shall be the date that is 15 days after the date of the
Notice.

 

11.1.3 Abatement of Rent. In the event of any damage or destruction to the
Premises, the Base Rent shall be temporarily abated proportionately to the
degree the Premises is rendered untenantable for the operation of Tenant’s
business as a result of the damage or destruction, but only to the extent of any
proceeds received therefor by Landlord from rental abatement insurance. Such
abatement shall commence on the date of the damage or destruction and shall end
on the date on which Landlord substantially completes the repair or restoration
of the Premises to the extent required by Section 11.1.3. Except for such Base
Rent abatement, Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the Premises, damage to Tenant’s Personalty or
to the Tenant Alterations, or any inconvenience occasioned by any damage,
repair, or restoration.

 

11.1.4 Insurance Proceeds. If Landlord terminates this Lease, then Landlord
shall be entitled to any and all of the insurance proceeds payable for the
damage to Landlord’s property. Tenant shall promptly deliver to Landlord, and
Tenant hereby assigns to Landlord, all insurance proceeds payable to Tenant
under its insurance in respect of any Tenant Alterations.

 

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11.1.5 Waiver. Tenant (for itself and all others claiming through Tenant)
irrevocably waives and releases its rights to make repairs at Landlord’s expense
under Sections 1932(2), 1933(4), 1941, 1941.1, and 1942 of the California Civil
Code and any similar or successor Laws, as the same may be amended. With respect
to any damage or destruction that Landlord is obligated to repair or elects to
repair under this Section 11.1, Tenant also waives all of its rights to
terminate this Lease pursuant to rights presently or hereafter accorded by Law
to tenants, including the provisions of Sections 1932(2) and 1933(4) of the
California Civil Code. The provisions of this Lease, including this Section
11.1, constitute an express agreement between Landlord and Tenant with respect
to any damage to, or destruction of, any portion of the Project. Any Law,
including Sections 1932(2) and 1933(4) of the California Civil Code, in respect
of any rights or obligations concerning any such damage or destruction in the
absence of an express agreement between the parties, and any other Law relating
to damage or destruction of leased premises, whether in effect on the date of
this Lease or thereafter, shall have no application to this Lease or any damage
or destruction of any part of the Premises or any other portion of the Project.

 

11.2 Condemnation. If all or any substantial part of the Premises shall be taken
by any public or quasi-public authority under the power of eminent domain, or
conveyance in lieu thereof, then either party to this Lease shall have the right
to give the other a Notice terminating this Lease at any time within 30 days
after such taking. If neither party to this Lease shall so elect to terminate
this Lease, then the Rent thereafter to be paid shall be adjusted on a fair and
equitable basis under the circumstances. If any substantial part of the Project
shall be taken by any public or quasi-public authority under the power of
eminent domain or conveyance in lieu thereof, regardless of whether the Premises
or any part of the Premises are so taken, then Landlord shall have the right to
terminate this Lease. Landlord shall be entitled to any and all income, Rent,
award, and any interest whatsoever upon any such sum, which may be paid or made
in connection with any such public or quasi-public taking or conveyance in lieu
thereof, and Tenant hereby assigns to Landlord any interest Tenant may have in,
or claim to, all or any part of such sums, other than any separate award that
may be made with respect to Tenant’s trade fixtures and moving expenses. Tenant
shall make no claim for the value of any unexpired portion of the Term. Tenant
(for itself and all others claiming through Tenant) hereby irrevocably waives
and releases its rights under Section 1265.130 of the California Code of Civil
Procedure and any similar or successor Law, as the same may be amended.

 

ARTICLE 12
MISCELLANEOUS

 

12.1 Notices. Any notice, consent, demand, or other communication or document
required or permitted to be given under this Lease or pursuant to any Laws
(“Notice(s)”), shall be (a) in writing (except as otherwise provided in this
Lease), (b) addressed to the intended recipient at its address set forth on the
signature pages of this Lease (provided that each of Landlord and Tenant may
change its addresses for the giving of notices by giving notice thereof to the
other party), (c) sent by fully prepaid registered or certified United States
Mail return receipt requested, or by reputable independent contract delivery
service furnishing a written record of attempted or actual delivery, and (d)
deemed to have been delivered when tendered for delivery to the addressee,
whether or not actually accepted or received by the addressee. The provisions of
Section 1013(a) of the California Code of Civil Procedure, extending the time
within which a right may be exercised or an act may be done, shall not apply to
a Notice. Any Notice may be given by an attorney on behalf of Landlord or by
Landlord’s property management company.

 

12.2 OFAC/FCPA. Neither Tenant nor any of its affiliates, nor to its knowledge
any of their respective brokers or other agents acting in any capacity in
connection with the transactions contemplated by this Lease is or will be (a)
conducting any business or engaging in any transaction or dealing with any
person appearing on the U.S. Treasury Department’s OFAC list of prohibited
countries, territories, “specifically designated nationals” (“SDNs”) or “blocked
person” (each a “Prohibited Person”) (which lists can be accessed at the
following web address: http://www.ustreas.gov/offices/enforcement/ofac/),
including the making or receiving of any contribution of funds, goods or
services to or for the benefit of any such Prohibited Person; (b) engaging in
certain dealings with countries and organizations designated under Section 311
of the USA PATRIOT Act as warranting special measures due to money laundering
concerns; (c) dealing in, or otherwise engaging in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order No.
13224 dated September 24, 2001, relating to “Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism”;
(d) a foreign shell bank or any person that a financial institution would be
prohibited from transacting with under the USA PATRIOT Act; or (e) engaging in
or conspiring to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempting to violate, any of the
prohibitions set forth in (i) any U.S. anti-money laundering law, (ii) the
Foreign Corrupt Practices Act, (iii) the U.S. mail and wire fraud statutes, (iv)
the Travel Act, (v) any similar or successor statutes or (vi) any regulations
promulgated under the foregoing statutes. If at any time this representation
becomes false, then it shall be considered an event of default under this Lease
as to which there shall be no right to Notice or any opportunity to cure,
notwithstanding anything contained in this Lease to the contrary, and Landlord
shall have the right to immediately exercise all of the remedies set forth in
this Lease, including immediate termination of this Lease.

 

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12.3 Financial Statements. At Landlord’s request, Tenant shall give to Landlord
a copy of Tenant’s most recent financial statements, either audited or
unaudited, but if unaudited, certified by Tenant’s chief financial officer as
being true, complete, and correct in all material respects; provided, however,
that if and so long as Tenant is a public company, Tenant may satisfy its
obligation to provide financial statements to Landlord by providing Landlord
Tenant’s most recent annual and quarterly reports filed with the Securities and
Exchange Commission.

 

12.4 Brokers. Each of Landlord and Tenant represents and warrants to the other
that such party has not dealt with any broker or finder in connection with this
Lease.

 

12.5 Limitation of Landlord’s Liability. Landlord’s liability under this Lease
shall be limited to and enforceable only against and to the extent of Landlord’s
interest in the Project. Landlord’s obligations under this Lease shall not be
personally binding on Landlord’s present or future investment manager, property
manager, or any of the trustees, directors, officers, partners, beneficiaries,
principals, members, managers, investors, stockholders, employees, affiliates,
agents, representatives, successors or assigns of Landlord, Landlord’s
investment manager, or Landlord’s property manager. Landlord shall not be liable
to Tenant under this Lease for any lost profits or damage to business. The
limitation of liability provided in this Section 12.5 is in addition to, and not
in limitation of, any limitation or liability applicable to Landlord provided by
Law or by any other contract, agreement, or instrument.

 

12.6 No Waivers. No provision of this Lease shall be deemed waived by either
party unless expressly waived in a writing signed by the waiving party (and then
only to the extent so expressly waived). No waiver shall be implied by delay or
any other act or omission of either party. No waiver by either party of any
provision of this Lease shall be deemed a waiver of such provision with respect
to any subsequent matter relating to such provision, and Landlord’s consent or
approval respecting any action by Tenant shall not constitute a waiver of the
requirement for obtaining Landlord’s consent or approval respecting any
subsequent action. No act or thing done by Landlord or its agents during the
Term shall be deemed a termination of this Lease, an acceleration of the
Termination Date, or an acceptance of the surrender of the Premises, and no
agreement to terminate this Lease, accelerate the Termination Date, or accept a
surrender of the Premises shall be valid, unless expressly provided in a writing
signed by Landlord. Acceptance of the full or any partial payment of Rent shall
not be deemed Landlord’s waiver of any breach by Tenant of any provision of this
Lease and Landlord’s acceptance of a lesser amount than the Rent due under this
Lease shall not be deemed Landlord’s waiver of Landlord’s right to receive the
full amount of Rent due, nor shall any endorsement or statement on any check or
payment or any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such partial payment without prejudice to
Landlord’s right to recover the full amount of Rent due. Tenant acknowledges
that this Section 12.6 imparts actual notice to Tenant, pursuant to California
Code of Civil Procedure Section 1161.1(c), that Landlord’s acceptance of partial
payment of Rent does not constitute a waiver of any of Landlord’s rights,
including any right Landlord may have to recover possession of the Premises.
Forbearance by Landlord in enforcing one or more of the remedies provided in
this Lease upon an Event of Default shall not be deemed a waiver of such Event
of Default or of Landlord’s right to enforce any such remedies with respect to
such Event of Default or any subsequent Event of Default. Landlord’s acceptance
of any Rent or of the performance of any other provision of this Lease from any
person other than Tenant, including any Transferee, shall not be deemed a waiver
of Landlord’s right to approve any Transfer in accordance with Article 6.

 

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12.7 Entry into Premises. Landlord reserves and shall at all times have the
right to enter the Premises to inspect the same, to supply any service to be
provided by Landlord under this Lease, to remedy any Tenant default, to show the
Premises to prospective purchasers, investors, Mortgagees, and tenants, and to
alter, improve, and repair the Premises or any other portion of the Project, in
any case without abatement of Rent, and may for such purposes erect, use, and
maintain scaffolding, pipes, conduits, and other necessary structures and open
any wall, ceiling, or floor in or through the Building or Premises where
reasonably required by the character of the work to be performed; provided that
Tenant’s entrance to the Premises shall not be blocked and the conduct of
Tenant’s business at the Premises shall not be interfered with unreasonably. If
Landlord damages any portion of any wall or wall-covering, ceiling, or floor or
floor-covering within the Premises, then Landlord shall repair or replace the
damaged portion to match the original as nearly as commercially reasonable, but
shall not be required to repair or replace more than the portion actually
damaged. Except as otherwise expressly provided in this Section 12.7, Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned by any action of Landlord authorized
by this Section 12.7.

 

12.8 Other Provisions.

 

12.8.1 Covenant of Quiet Enjoyment. Landlord covenants that Tenant, while paying
the Rent and performing Tenant’s other covenants and agreements under this
Lease, shall peaceably and quietly have, hold, and enjoy the Premises for the
Term without hindrance from Landlord, but not otherwise, subject to all matters
of record and to the terms and provisions of this Lease.

 

12.8.2 Survival. All obligations of Tenant under this Lease not fully performed
as of the Termination Date shall survive the Termination Date.

 

12.8.3 Entire Agreement. This Lease, together with the Addendum and the
Exhibits, contains all of the agreements of Landlord and Tenant in respect of
this Lease and supersedes any previous negotiations. There have been no
representations made by Landlord or any of Landlord’s representatives, or
understandings made between Landlord and Tenant, other than those set forth in
this Lease, the Addendum and the Exhibits. This Lease may not be modified except
by a written instrument duly executed by the party to be bound.

 

12.8.4 Execution in Counterparts. This Lease may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.

 

12.8.5 Recording. Tenant shall not record this Lease or a short form memorandum
of this Lease.

 

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12.8.6 No Light, Air, or View Easement. Any diminution or shutting off of light,
air or view by any structure that may be erected on lands adjacent to or in the
vicinity of the Project or any portion thereof shall not affect this Lease,
entitle Tenant to any reduction in Rent, or impose any liability on Landlord.

 

12.8.7 Non-Discrimination. Tenant shall not (and Tenant shall not permit any
person claiming through or under Tenant to) discriminate against or segregate
any person or group of persons on account of race, color, creed, sex, religion,
marital status, ancestry, or national origin, whether in the use, occupancy,
subleasing, transferring, or enjoyment of the Premises, or otherwise.

 

12.8.8 Attorneys’ Fees. In any action or proceeding that Landlord or Tenant
initiates against the other party declaratory or otherwise, arising out of this
Lease, the unsuccessful party in such action or proceeding shall reimburse the
prevailing party for its costs, including reasonable attorneys’ fees.

 

12.8.9 Waiver of Consequential Damages. Neither Landlord nor Tenant shall be
liable to the other for any form of special, indirect, consequential, or
punitive damages.

 

12.8.10 Security. With respect to Tenant’s property and interests, Tenant
assumes the risk that any safety or security device, service, or program
provided by Landlord may not be effective, or may malfunction, or may be
circumvented by a criminal.

 

12.8.11 Antenna; Satellite Dishes. Subject to Landlord’s approval of the plans
and specifications related thereto, which shall not be unreasonably withheld,
conditioned, or delayed, during the Term Landlord shall permit Tenant to install
and maintain at Tenant’s sole expense telecommunications antennas, microwave
dishes and other communications equipment (“Antenna”) on the roof of the
Building in a location designated by Landlord and subject to strict compliance
with all applicable Restrictions. The size of the space and the size and
visibility of the Antenna shall be mutually acceptable to Landlord and Tenant.
Landlord makes no warranties or representations to Tenant as to the
permissibility of an Antenna on the Building under applicable Restrictions.
Tenant shall be required to obtain all governmental permits, consents or
authorizations necessary for the erection and operation of the Antenna and the
Antenna shall not interfere with the Building systems or equipment or with
equipment previously installed by any other occupant of the Building. If
installation of the Antenna requires any roof penetrations, Tenant shall use a
contractor approved by Landlord and shall cause such work to be done in a manner
that will preserve any roof warranty held by Landlord. Upon the termination of
this Lease, Tenant shall reimburse Landlord for the cost to remove the Antenna
and restore the roof to its prior condition. Tenant’s right to use the roof
shall be non-exclusive.

 

12.9 Interpretation.

 

12.9.1 Captions. The captions in this Lease are for convenience of reference and
shall not define, increase, limit, or describe the scope or intent of any
provision of this Lease.

 

12.9.2 Landlord and Tenant. The terms “Tenant” and “Landlord”, and any pronoun
used in place thereof, shall indicate and include each of the parties’ and
respective successors, executors, administrators, and permitted assigns,
according to the context, provided that, for the purposes of any provisions
indemnifying or waiving claims against, Landlord, the term “Landlord” shall also
include Landlord’s present and future investment manager, and property
management company, and all of their trustees, directors, officers, partners,
beneficiaries, principals, members, managers, investors, stockholders,
employees, affiliates, agents, representatives, contractors (and subcontractors
of any tier), successors and assigns.

 

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12.9.3 Non-Exclusivity. Whenever the words “including”, “include”, or “includes”
are used in this Lease, they shall be interpreted in a non-exclusive manner as
though the words “without limitation” immediately followed the same. Any
reference to “any part” or “any portion of” the Premises, the Building or the
Project or any other property shall be construed to refer to all or any part of
the same.

 

12.9.4 Covenants Independent. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent.

 

12.9.5 Joint and Several Liability. In any case where either Landlord or Tenant
consists of more than one person, the obligations of such party under this Lease
shall be joint and several.

 

12.9.6 Time of the Essence. Time is of the essence of this Lease and all of its
provisions.

 

12.9.7 Governing Law. This Lease shall in all respects be governed by the laws
of the State of California.

 

12.9.8 Successors and Assigns. Subject to the provisions of Article 6, the
provisions of this Lease shall be binding upon and inure to the benefit of the
heirs, successors, executors, administrators, and assigns of Landlord and
Tenant.

 

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[Signature Page to Lease Agreement between Walton Empire Center V, L.L.C., as
Landlord, and Point.360, as Tenant]

  

 

LANDLORD:       WALTON EMPIRE CENTER V, L.L.C.,   a Delaware limited liability
company         By: Walton WH Investors V, L.P.,     a Delaware limited
partnership,     its Sole Member  

 

  By: Walton WH Holdings V, L.L.C.,       a Delaware limited liability company,
      its General Partner  

 

    By: Walton Street Real Estate Fund V, L.P.,         a Delaware limited
partnership,         its Managing Member  

 

      By: Walton Street Managers V, L.P.,           a Delaware limited
partnership,           its General Partner  

 

        By: WSC Managers V, Inc.,             a Delaware corporation,          
  its General Partner  

 

          By:                Name:                Its:     

 

Landlord’s Notice Address: Landlord’s Payment Address:     Walton Empire Center
V, L.L.C. If by check: c/o Walton Street Capital, L.L.C.   900 North Michigan
Avenue, Suite 1900 Walton Empire Center V, L.L.C. Chicago, Illinois 60611 c/o
Tiarna Real Estate Services, Inc. Attention: Mr. James Holmes 2603 Main Street,
Suite 210   Angela Lang, Esq. Irvine, California 92614             If by wire
transfer:             Bank: Bank of the West       300 South Grand Ave., 13th
Floor       Los Angeles, CA 90071     ABA: 121100782     Swift Number: BWSTUS66
    Acct. Name: Walton Empire Center V, L.L.C.    

Acct. No.:

023-690503                

 

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[Continuation of Signature Page to Lease Agreement between Walton Empire Center
V, L.L.C., as Landlord, and Point.360, as Tenant]

   

TENANT:             Point.360,     a California Corporation             By:     
  Name:        Title:                By:        Name:        Title:     

 

 

Tenant’s Notice Address:

 

Point.360
2701 Media Center Drive,
Los Angeles, CA 90065
Attn: Executive Vice President, Finance and Administration and Chief Financial
Officer

 

 

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ADDENDUM

 

This Addendum is annexed to and made a part of that certain Lease Agreement,
effective as of July 1, 2015, by and between Walton Empire Center V, L.L.C.,
a Delaware limited liability company (“Landlord”), and Point.360, a California
corporation (“Tenant”).

 

1. Temporary Expansion Space. Approximately 7,489 rentable square feet on the
first floor of the Building that is not part of the Premises, consists of 4
suites known as Suite 101 (collectively, the “Temporary Suites”), all of which
are vacant as of the full execution of the Lease. Subject to the provisions of
this Section 1, and provided that an Event of Default is not in existence, then
to the extent that during the Term any of the Temporary Suites are vacant and
“available for lease” (“Temporary Expansion Space”), Tenant shall have a right
to expand the Premises on a suite-by-suite basis to include the Temporary
Expansion Space upon Notice to Landlord, which notice shall identify the
Temporary Suite(s) Tenant desires to lease (“Temporary Space Expansion Notice”).
The Temporary Expansion Space shall be leased to Tenant on a month-to-month
basis in its then current “As Is” condition on economic terms consistent with
the terms and conditions applicable to the initial Premises (after factoring in
Tenant’s Share with respect to the common area portion of the Project where the
applicable Temporary Expansion Space is located), including monthly Base Rent
charged per rentable square foot escalated at a rate of 3% per annum and
Additional Rent pursuant to Article 2 of the Lease. The parties acknowledge that
the rentable square footage of the Temporary Expansion Space was determined by
Ware Malcomb. If Tenant gives Landlord a Temporary Space Expansion Notice,
Landlord and Tenant shall then promptly amend the Lease to add the Temporary
Expansion Space specified in the Temporary Space Expansion Notice to the
Premises on the terms and conditions described above and to adjust Tenant’s
Share. The expansion right described in this Section 1 is personal to Original
Tenant, may not be assigned, transferred or conveyed to any party, and may be
exercised only if Original Tenant is in possession of, and occupies, at least
37,930 rentable square feet on the first floor of the Building without sublease
or assignment to any other person or entity. Original Tenant’s right to lease
the Temporary Expansion Space shall be subordinate to the rights granted to
other tenants prior to the full execution of the Lease. For purposes of this
Section 1 and Section 2 of this Addendum, Temporary Expansion Space shall be
“available for lease” only if it is not leased, subject to a lease or other
occupancy agreement, as such lease or occupancy agreement may be renewed or
extended from time to time, whether or not pursuant to the exercise of renewal
or extension provisions contained therein, or the subject of a lease negotiation
with a prospective tenant.

 

2. Expansion Option. Subject to the provisions of this Section 2, and provided
an Event of Default is not in existence, Tenant shall have an option to expand
the Premises to include Available Expansion Space (the “Expansion Option”). If
Tenant desires to so expand the Premises, Tenant shall give Landlord a Notice
(the “Expansion Notice”), which Expansion Notice shall set forth the number of
usable square feet Tenant desires to add to the Premises. Within 30 days after
Landlord’s receipt of the Expansion Notice, Landlord shall determine if there is
Available Space for lease located on (i) the first floor of the Building
(including any Tenant occupied Temporary Expansion Space), (ii) multi-tenant
floors of the Building, or (iii) the second floor of the Building ((i), (ii) and
(iii) are collectively referred to as the “Available Expansion Space”) and
deliver Notice (“Available Expansion Space Notice”) to Tenant describing the
Available Expansion Space, if any. Tenant acknowledges and agrees that (i) in
connection with Landlord’s determination of Available Expansion Space, priority
will be given to, and Tenant shall be required to lease the Available Expansion
Space, if at all, in the following sequence: (a) Available Expansion Space
located on the first floor of the Building (including any Tenant-occupied
Temporary Expansion Space), (b) Available Expansion Space located on
multi-tenant floors of the Building, and (c) Available Expansion Space located
on the second floor of the Building, (ii) Tenant will be required to convert any
Temporary Expansion Space it is then leasing to Available Expansion Space before
leasing any other Available Expansion Space, and (iii) Landlord shall have the
right, in its sole discretion, to remove the space on the second floor of the
Building from the Available Expansion Space. If Tenant wishes to exercise its
Expansion Option with respect to the Available Expansion Space described in the
Available Expansion Space Notice, then within 10 business days after Landlord’s
delivery of the Available Expansion Space Notice to Tenant, Tenant shall deliver
Notice (the “Exercise Notice”) to Landlord of Tenant’s exercise of Expansion
Option. Available Expansion Space shall be leased to Tenant in its then-current
“As-Is” condition and upon economic terms and conditions that are consistent
with the economic terms and conditions applicable to the initial Premises,
including monthly Base Rent charged per rentable square foot escalated at a rate
of 3% per annum, and Additional Rent pursuant to Article 2 of the Lease. If
Tenant does not give the Exercise Notice to Landlord within 10 business days
after Landlord’s delivery of the Available Expansion Space Notice to Tenant,
then Landlord shall be free to negotiate and enter into a lease for the
Available Expansion Space or applicable portion thereof to anyone to whom
Landlord desires and Tenant shall have no further right hereunder with respect
to the subject Available Expansion Space. If Tenant gives Landlord an Exercise
Notice, Landlord and Tenant shall then promptly amend the Lease to add such
Available Expansion Space to the Premises on the terms and conditions described
above and to adjust Tenant’s Share. The Expansion Option hereunder is personal
to Original Tenant, and may not be Transferred and may be exercised only if
Original Tenant is in possession of, and occupies, at least 37,930 rentable
square feet on the first floor of the Building without sublease or assignment to
any other person or entity. The Expansion Option shall be subordinate to the
rights granted to other tenants prior to the full execution of the Lease.

 

 

Addendum

Empire Center

Point.360

 

 

3. License Space. For the period commencing on July 1, 2015 and ending on
September 30, 2015 (the “Second Floor Space Initial License Term”), Tenant shall
have a limited license to use and occupy Suite 200 located on the second floor
of the Building (the “Second Floor Space”) for the purpose of transitioning its
operations from the Second Floor Space to the Premises. So long as Tenant’s
continued limited occupancy on the Second Floor Space does not negatively impair
Landlord’s desired activities at the Building (as determined by Landlord in its
sole discretion) upon Notice from Tenant, the Second Floor Space Initial License
Term shall be extended for up to an additional three (3) months, through
December 31, 2015 (the “Second Floor Space Extended License Term”). The Second
Floor Space Initial License Term and Second Floor Space Extended License Term
are hereinafter collectively referred to as the “Second Floor Space License
Term”. Landlord shall have the right to terminate Tenant’s license to use the
Second Floor at any time during the Second Floor Space Extended License Term
upon 15 days’ prior Notice to Tenant. During the Second Floor Space License Term
Tenant shall comply with all of the terms and provisions of the Lease except for
those provisions requiring the payment of Base Rent and Additional Rent. In
consideration of the limited license to use the Second Floor Space, Tenant shall
be charged an amount equal to Landlord’s estimate of actual variable costs
incurred by Landlord in connection with Tenant’s occupancy and use of the Second
Floor Space, as determined by Landlord in its reasonable discretion and after
consultation with Tenant. Tenant shall remit payment for such variable costs to
Landlord within 30 days after Landlord’s delivery of an invoice to Tenant. In
addition to the foregoing charge, on or before the first day of each full
calendar month during the Second Floor Space License Term, Tenant shall pay to
Landlord a monthly license fee of $5,000 per month for Tenant’s use of the
Second Floor Space. The license set forth in this Section 3 is personal to the
Original Tenant and shall not be Transferred. If Original Tenant shall Transfer
its interest in the Lease, then notwithstanding anything contained in this
Section 3 to the contrary, simultaneously with such Transfer Tenant’s right to
use and occupy the Second Floor Space shall terminate and be of no further force
or effect and Tenant shall immediately surrender the Second Floor Space in the
condition required hereby. Use of the Second Floor Space by Tenant shall be on
an “As-Is” basis, and Landlord shall have no obligation to repair or to make any
improvements or alterations to the Second Floor Space or to provide any
construction or refurbishing allowance whatsoever. Notwithstanding anything
contained in this Lease to the contrary, Tenant shall not perform any
Alterations to the Second Floor Space. Tenant shall vacate and surrender the
Second Floor Space to Landlord on or prior to the end of the Second Floor Space
License Term in a similar condition to that upon delivery and broom clean.
Tenant acknowledges that Tenant’s failure to vacate and surrender the Second
Floor Space may compromise or otherwise affect Landlord’s ability to enter into
new leases with prospective tenants regarding the Second Floor Space. Therefore,
if Tenant fails to vacate and deliver the Second Floor Space upon the
termination or expiration of this Second Floor Space Term, in addition to any
other liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from and against all claims made by any
succeeding tenant founded upon such failure to vacate and deliver, and any
losses suffered by Landlord, including lost profits, resulting from such failure
to vacate and deliver. Tenant agrees that any proceedings necessary to recover
possession of the Second Floor Space, whether before or after expiration of the
Term of the Lease, shall be considered an action to enforce the terms of this
Lease for purposes of the awarding of any attorney’s fees in connection
therewith.

 

 

Addendum

Empire Center

Point.360

 

 

EXHIBIT A

FLOOR PLAN DEPICTING THE PREMISES

[image_001.jpg]

 

 

 

 A-1

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Point.360

 

 

EXHIBIT B

SITE PLAN

 

 

 

[image_002.jpg]

 B-1

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Point.360

 

 

EXHIBIT C

FORM OF TENANT ESTOPPEL CERTIFICATE

 

The undersigned as Tenant under that certain Office Lease (the “Lease”) made and
entered into as of _________, ____ with Walton Empire Center V, L.L.C.,
a Delaware limited liability company, as Landlord, for Premises described as
Suite ____ in the office building commonly known as Empire Center and located at
2300 Empire Avenue, Burbank, California 91504-3350, certifies as follows:

 

1. Attached hereto as Exhibit A is a true and correct copy of the Lease and all
amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.

 

2. The undersigned has commenced occupancy of the Premises described in the
Lease, currently occupies the Premises, and the Term commenced on
____________________.

 

3. The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A. Tenant is not entitled to
receive any concession or benefit (rental or otherwise) or other similar
compensation in connection with leasing the Premises other than as set forth in
the Lease.

 

4. Tenant has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto
except as follows: ______________________.

 

5. Base Rent became payable on ____________________.

 

6. The Term expires on _______________________.

 

7. All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and neither Landlord nor Tenant
is in default thereunder. Without limiting the foregoing, (i) all construction
and installation of tenant improvements required to be performed by or paid by
Landlord under the Lease have been completed and paid and (ii) there are no
unpaid allowances or rental concessions payable or creditable to Tenant which
have not been paid or credited in full.

 

8. No rental has been paid in advance and no security has been deposited with
Landlord except as provided in the Lease.

 

9. As of the date hereof, there are no existing defenses or offsets that the
undersigned has, which preclude enforcement of the Lease by Landlord.

 

10. All monthly installments of Base Rent and all Monthly Expense and Tax
Installments (as those terms in quotation marks are defined in the Lease) have
been paid when due through ______________. The current monthly installment of
Base Rent is $________________.

 

11. Tenant does not have any option to purchase or right of first refusal or
first offer to purchase the Empire Center, or any portion thereof, or any
interest therein and the only interest of Tenant in such property is as the
Tenant under the Lease.

 

 C-1

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Point.360

 

 

12. The amount of the security deposit held by Landlord to secure Tenant’s
performance under the Lease is __________________ Dollars ($____________). No
portion of the security deposit has been utilized or applied by Landlord.

 

13. Tenant is not the subject of any bankruptcy, insolvency, debtor’s relief,
reorganization, receivership or other similar proceeding.

 

The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord’s prospective mortgagee, trust deed holder or a prospective purchaser
or investor, and acknowledges that it recognizes that if same is done, in
addition to Landlord, said mortgagee, prospective mortgagee, trust deed holder
or prospective purchaser or investor will be relying upon the statements
contained herein in making the loan or acquiring the property of which the
Premises are a part, and in accepting an assignment of the Lease as collateral
security, and that receipt by it of this Estoppel Certificate is a condition of
making the loan or acquisition of such property.

 

If Tenant is a corporation, limited liability company or partnership, each
individual executing this Estoppel Certificate on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the State of California, if required by law, and
that Tenant has full right and authority to execute and deliver this Estoppel
Certificate and that each person signing on behalf of Tenant is authorized to do
so.

 

Executed at __________________ on the _____ day of ______________, 20___.

 

  “Tenant”       Point.360, a California corporation           By:     Name:    
Title:  

  Date Signed:        

 

 

 C-2

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EXHIBIT D

 

PARKING AGREEMENT

 

This Parking Agreement (this “Agreement”) made as of July 1, 2015, between
Walton Empire Center V, L.L.C., a Delaware limited liability company (the
“Parking Operator”), and Point.360, a California corporation (“Tenant”).

 

Recitals

 

A. Concurrently with the execution of this Agreement, Tenant is entering into a
space lease (the “Lease”) with the Parking Operator, as the landlord (and in
such capacity is referred to herein as the “Landlord”) for certain premises (the
“Premises”) in the office building located at 2300 Empire Avenue, Burbank,
California (the “Building”), which Building is located in an office project
currently known as “Empire Center” (the “Project”). Capitalized terms used in
this Agreement and not separately defined in this Agreement have the meanings
set forth in the Lease.

 

B. Included within the Project is a six (6) story parking structure, a surface
parking lot adjacent to the Building, and a surface parking lot behind the
parking structure (collectively, the “Parking Facilities”), which Landlord
currently operates, but which Landlord (in Landlord’s sole and absolute
discretion) may at any time in the future master lease to another operator.

 

C. Pursuant to the terms of Section 8.5 of the Lease, during the Term Tenant is
entitled to lease parking passes from the Parking Operator on the terms, and
subject to the conditions set forth in a separate agreement between Tenant and
the Parking Operator to be entered into concurrently with the Lease.

 

D. This Agreement constitutes the separate agreement between Tenant and the
Parking Operator referred to in Section 8.5 of the Lease.

 

Agreement

 

1. Parking Passes.

 

1.1 General. The term of this Agreement (the “Term”) shall commence on the
Commencement Date and shall continue until the earlier to occur of the
Termination Date (as the same may be extended) or the earlier termination of the
Lease. Tenant shall have the right to lease the number of parking passes for the
Parking Facilities as is set forth in Section 8.5 of the Lease (the “Maximum
Number of Parking Passes”), subject to the terms and conditions set forth in
this Agreement. Each parking pass shall entitle Tenant to park one (1) passenger
size vehicle in the Parking Facilities on an unreserved, non-exclusive, first
come, first serve basis (the “Unreserved Passes”); provided, however, that at
Tenant’s election, up to the Maximum Number of Reserved Parking Passes may be
converted from Unreserved Passes to reserved parking passes for the exclusive
use of specified parking spaces in the Parking Facilities (the “Reserved
Passes”). As used herein, the “Maximum Number of Reserved Parking Passes” means
50. Further, at Tenant’s election up to the Maximum Number of Reserved Surface
Lot Parking Spaces may be converted from Reserved Passes to reserved parking
passes for the exclusive use of parking spaces in the surface lot within the
Parking Facilities located in an area near the Building’s main lobby entry (the
“Surface Lot Reserved Passes”). As used herein, the “Maximum Number of Reserved
Surface Lot Parking Passes” means 5. As of the date hereof, Tenant has elected
to lease (i) the Maximum Number of Reserved Surface Lot Parking Passes, and
(ii) 180 Unreserved Passes. Tenant shall have a one-time right, exercisable
within 120 days after the Commencement Date, to revise its election as to the
number and/or type of parking passes [not to exceed the Maximum Number of
Parking Passes or the Maximum Number of Reserved Parking Passes (including the
Maximum Number of Reserved Surface Lot Parking Passes)] by providing the Parking
Operator at least 30 days prior Notice, at which point commencing on the later
of (i) the first day of the calendar month following the Parking Operator’s
receipt of such Notice, and (ii) the date that is 30 days after the Parking
Operator’s receipt of such Notice any such additional requested parking passes
shall be provided by the Parking Operator and purchased by Tenant on the terms
and subject to the conditions set forth in this Agreement and any excess parking
passes shall be cancelled and returned to the Parking Operator. Thereafter,
subject to availability as determined by Parking Operator in its sole, but good
faith, discretion, Tenant may, from time to time, increase the number of
Unreserved Parking Passes (not to exceed the Maximum Number of Parking Passes),
or convert its Unreserved Passes to Reserved Passes (not to exceed the Maximum
Number of Reserved Parking Passes) or decrease the number of parking passes of
any type by providing the Parking Operator with at least 30 days’ prior Notice,
at which point commencing on the later of (i) the first day of the calendar
month following the Parking Operator’s receipt of such Notice from Tenant, and
(ii) the date that is 30 days following the Parking Operator’s receipt of such
Notice from Tenant any such additional parking passes shall be provided by the
Parking Operator and purchased by Tenant on the terms and subject to the
conditions set forth in this Agreement and any excess parking passes shall be
cancelled and returned to the Parking Operator. For the avoidance of doubt,
while the number of Reserved Passes (including the number of Surface Lot
Reserved Passes) and the number of Unreserved Passes may be increased or
decreased from time to time on 30 days’ prior Notice as set forth in this
paragraph, Tenant shall have no right to lease more than the Maximum Number of
Parking Passes (i.e., Tenant’s Reserved Passes (including the number of Surface
Lot Reserved Passes) and Unreserved Passes shall not exceed 250 parking passes).

 

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1.2 Visitor Parking. Additionally, Tenant may allocate a portion of Tenant’s
Unreserved Passes to be used for temporary visitor parking in the designated
short-term parking area of the surface parking lot adjacent to the Building
and/or in the parking structure. Such visitor parking shall be available for
Tenant’s visitors in lieu of the substituted Unreserved Passes for the subject
month. If Tenant should desire to convert Unreserved Passes to visitor parking
passes, Tenant shall provide Parking Operator at least 30 days prior Notice of
the number of Tenant’s Unreserved Passes that Tenant will allocate for Tenant’s
visitor parking (the “Visitor Parking Passes”). Tenant shall continue to pay
Parking Operator the normal monthly parking fee for such Visitor Parking Passes
at the then current rate for Unreserved Passes for the subject month and Tenant
shall relinquish the designated number of Unreserved Passes to Parking Operator
before being provided with the corresponding Visitor Parking Passes. The
Unreserved Parking Passes shall be converted to Visitor Parking Passes on the
first day of the month which is at least 30 days after Parking Operator’s
receipt of the Notice. The Visitor Parking Passes shall consist of one (1)
chaser parking pass per Business Day per each Tenant requested Visitor Parking
Pass for the subject month. For example, if Tenant requests 10 Visitor Parking
Passes for a month which contains 18 Business Days, Tenant shall be provided
with 180 chaser passes for visitor parking for said month, the number of
Tenant’s Unreserved Passes for such month shall be reduced by 10, and Tenant
shall deliver 10 Unreserved Passes to Parking Operator. Except as set forth
above with respect to Visitor Parking Passes, visitor parking shall be charged
at the then current visitor rate per vehicle. Visitors parking in the parking
structure are currently charged $1.00 per twenty (20) minute interval
($10.00/day maximum). This rate is subject to change from time to time as
determined by Parking Operator.

 

1.3 Shared Parking Passes. Certain of Tenant’s employees work non-concurrent
shifts and Tenant has requested the right for these employees to share
Unreserved Passes. To accommodate Tenant’s request, Parking Operator has agreed
to provide Tenant with up to an additional 75 parking access cards for use with
Tenant’s Unreserved Passes. Tenant will be charged for these additional parking
access cards only to the extent that Tenant’s use of unreserved parking spaces
in the parking structure exceeds the number of Unreserved Passes leased by
Tenant in accordance with Section 1.1 above.

 

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2. Parking Charges. Tenant shall pay to the Parking Operator, or if directed by
the Parking Owner, to the Parking Operator’s parking garage manager, if any, the
monthly parking charges, if any, set forth below for the number and type of
parking passes purchased by Tenant, without deduction or offset (except as
provided in Section 3, below), on the first day of each month during the Term.
Except as expressly set forth in Section 3 below, no deduction from monthly
parking charges shall be made for days on which Tenant’s parking passes are not
fully utilized. The initial monthly parking charges for Unreserved Passes is
$50.00 and for Reserved Passes is $125.00. Notwithstanding the foregoing, in the
event any surcharge, tax or regulatory fee is at any time imposed by any
governmental authority or subdivision thereof with reference to parking, Tenant
shall, upon not less than 15 days’ prior notice, pay such surcharge, tax or
regulatory fee to the Parking Operator in advance on the first day of each
calendar month. The Parking Operator will enforce any surcharge, tax or
regulatory fee in an equitable manner among the tenants of the Project utilizing
the Parking Facilities.

 

3. Use of the Parking Facilities. Tenant shall, and shall cause each of its
agents, contractors, employees, customers, licensees, invitees and subtenants
(collectively “Tenant Parties”) at all times to, (i) comply with all applicable
Federal, state, and local laws, statutes, ordinances, rules, regulations, codes,
decrees, orders and other requirements, (collectively “Laws”) and (ii) abide by
any rules and regulations for use of the Parking Facilities (the “Parking
Rules”) that the Parking Operator or the Parking Operator’s parking garage
manager, if any, establishes from time to time, and in all events agrees to use
the Parking Facilities in a safe manner. The Parking Rules currently in effect
are attached to this Agreement as Schedule D-1. By execution of this Agreement,
Tenant agrees to acquaint all persons to whom it provides parking passes with
the Parking Rules. The Parking Operator reserves the right to assign specific
spaces, and to reserve spaces for visitors, compact vehicles, alternative fuel
vehicles, disabled persons or for other tenants or guests of the Project, and
Tenant shall not park, and shall not allow any Tenant Parties to park, in any
such assigned or reserved spaces. Tenant acknowledges that the Parking
Facilities may be temporarily closed entirely or in part in order to make
repairs or perform maintenance services, or to alter, modify, restripe or
renovate the Parking Facilities or if required by casualty, strike,
condemnation, act of God, Law or any other reason beyond the Parking Operator’s
reasonable control. In such event, the Parking Operator shall refund any prepaid
monthly parking charges paid hereunder, prorated on a per diem basis, to the
extent Tenant cannot use the Parking Facilities.

 

4. Assignment Rights. Tenant’s right to purchase parking passes for the Parking
Facilities is exclusive to Tenant and any approved or permitted assignee of
Tenant’s interests in this Lease and shall not be separated in any manner from
the leasehold estate of Tenant. The Parking Operator shall be entitled to 50% of
any profits made by Tenant in connection therewith after deducting the Costs
Component (as defined in Section 6.1.5 of the Lease) and Tenant’s calculation of
any Transfer Premium (as provided in Section 6.1.5 of the Lease) for any such
assignment or sublease; provided that the foregoing profit split shall not apply
to any Permitted Transfer under Section 6.1.7 of the Lease. The Parking
Operator, on the other hand, may (in the Parking Operator's sole and absolute
discretion) at any time in the future master lease to another operator, and
freely assign this Agreement to such operator without any requirement to obtain
Tenant's consent. In event of an assignment by the Parking Operator of this
Agreement, the same shall operate to release the Parking Operator from any
future liability (incurred after the effective date of said release) upon any of
the covenants or conditions, expressed or implied, contained in this Agreement
in favor of Tenant upon such successor’s assumption of such obligations under
this Agreement, and in such event, Tenant agrees to look solely to the successor
in interest of the Parking Operator in and to this Agreement for performance of
all of the obligations of the Parking Operator hereunder. Except as set forth in
this Section 4, this Agreement shall not be affected by any such assignment and
Tenant agrees to attorn to the assignee of the Parking Operator. If any security
has been given by Tenant to secure the faithful performance of any of the
covenants of this Agreement, the Parking Operator may transfer or deliver said
security, as such, to the Parking Operator’s successor in interest and thereupon
the Parking Operator shall be discharged from any further liability with regard
to said security.

 

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5. Limitation on Liability. Tenant agrees that to the fullest extent permitted
by applicable Laws, the Parking Operator shall have no liability for any loss or
damage to property or other items located in the Parking Facilities (including
any loss or damage to the vehicles of Tenant or any Tenant Party or the contents
thereof due to theft, vandalism or accident), or for any personal injury or
death arising out of the use of the Parking Facilities by Tenant or any Tenant
Parties, whether or not such loss, damage, injury or death results from the
Parking Operator’s active negligence or negligent omission. The limitation on
the Parking Operator’s liability under the preceding sentence shall not apply,
however, to loss, or damage, injury or death arising directly from the Parking
Operator’s willful misconduct. Tenant acknowledges that the Parking Operator may
(in the Parking Operator's sole and absolute discretion) from time to time in
the future arrange for the Parking Facilities to be managed by another operator.
Without limiting the foregoing, Tenant acknowledges that to the fullest extent
permitted by applicable Laws, the Parking Operator shall have no liability for
claims arising through acts or omissions of any such other operator. Tenant on
its behalf and on behalf of all others claiming through Tenant hereby
voluntarily releases, discharges, waives and relinquishes any and all actions or
causes of action for personal injury, death, or property damage occurring to
Tenant or any Tenant Parties arising as a result of parking in the Parking
Facilities or any activities incidental thereto, wherever or however the same
occur, and further agrees that Tenant will not prosecute any claim for personal
injury, death or property damage against the Parking Operator or any manager of
the Parking Facilities or any of their respective trustees, partners, directors,
officers, members, shareholders, agents, servants, employees or contractors, for
any of said causes of action and in all events, Tenant agrees to look first to
its insurance carrier and to require the Tenant Parties look first to their
respective insurance carriers for payment of any losses sustained in connection
with any use of the Parking Facilities. Tenant hereby waives on behalf of its
insurance carriers all rights of subrogation against the Parking Operator or any
of the Parking Operator’s trustees, partners, directors, officers, members,
stockholders, agents, servants, employees and contractors. If, for any other
reason, Tenant or any Tenant Party properly designated by Tenant shall be denied
access to the Parking Facilities, and Tenant or such Tenant Party shall have
complied with this Agreement and this Agreement shall be in effect, the Parking
Operator’s liability shall be limited to such parking charges (excluding tickets
for parking violations) incurred by Tenant or such Tenant Party in utilizing
alternative parking, which amount the Parking Operator shall pay upon
presentation of documentation supporting Tenant’s claims in connection
therewith.

 

6. Remedies for Violation. If Tenant violates any of the terms and conditions of
this Agreement, the Parking Operator or the manager of the Parking Facilities,
if any, shall have the right to remove from the Parking Facilities any vehicles
that shall have been involved or shall have been owned or driven by parties
involved in causing such violation, without liability therefore whatsoever. In
addition, the Parking Operator shall have the right to cancel Tenant’s right to
use the Parking Facilities pursuant to this Agreement upon 10 days’ Notice,
unless within such 10 day period, Tenant cures such violation. Such cancellation
right shall be cumulative and in addition to any other rights or remedies
available to the Parking Operator at law or equity, or provided under this
Agreement, for violation of the provisions of this Agreement. If Tenant defaults
with respect to the same term or condition under this Agreement more than 3
times during any 12-month period, and the Parking Operator notifies Tenant
thereof after each such default, the next default of such term or condition
during the succeeding twelve month period, shall, at the Parking Operator’s
election, constitute an incurable default. Any default by Tenant under the Lease
shall be a default under this Agreement, and any default under this Agreement
shall be a default under the Lease.

 

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7. Miscellaneous. By execution of this Agreement, each of Tenant and Landlord
hereby represents and warrants that the person signing on behalf of each such
party is fully authorized to act on behalf of such party with respect to this
Agreement and to execute and deliver this Agreement on behalf of such party. In
the event of any dispute hereunder, the prevailing party shall be entitled to
recover all costs, attorneys’ fees and expert witness fees from the
non-prevailing party. If any provisions of this Agreement are not enforceable,
the remaining provisions of this Agreement shall be enforced in accordance with
their terms. This Agreement may be executed by counterpart and delivered by
facsimile or as a PDF or similar attachment to an email. This Agreement shall be
governed by the Laws of the State of California (without regard to conflicts of
law). This Agreement may be amended only by a written amendment, fully executed
and delivered by all the parties hereto.

 

[Remainder of this Page Intentionally Left Blank; Signature Page Follows.]

 

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[Signature Page to Parking Agreement between Walton Empire Center V, L.L.C., as
the Parking Operator, and Point.360, as Tenant]

 

 

 

Parking Operator:       WALTON EMPIRE CENTER V, L.L.C.,   a Delaware limited
liability company             By: Walton WH Investors V, L.P.,     a Delaware
limited partnership,     its Sole Member  

 

  By: Walton WH Holdings V, L.L.C.,       a Delaware limited liability company,
      its General Partner  

 

    By: Walton Street Real Estate Fund V, L.P.,         a Delaware limited
partnership,         its Managing Member  

 

      By: Walton Street Managers V, L.P.,           a Delaware limited
partnership,           its General Partner  

 

        By: WSC Managers V, Inc.,             a Delaware corporation,          
  its General Partner  

 

          By:                Name:                Its:      

 

 

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[Continuation of Signature Page to Parking Agreement between Walton Empire
Center V, L.L.C., as the Parking Operator, and Point.360, as Tenant]

 

 

TENANT:       Point.360,   a California corporation         By:      Name:     
Title:            By:      Name:      Title:     

 

 

 

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EXHIBIT D-1

 

TRAFFIC AND PARKING RULES AND REGULATIONS

 

The following rules and regulations shall govern the use of the Parking
Facilities: All capitalized terms used in these rules and regulations shall have
the same respective meanings as in the Parking Agreement to which they are
attached.

 

1. Neither the Parking Operator nor any parking garage manager assumes
responsibility for any damage to any vehicle parked in the Parking Facilities or
for any goods left in any such vehicle. All such liability is specifically
assumed by the operator of any such vehicle as a condition of parking.

 

2. Tenant shall not (a) park or permit any Tenant Parties to park in any parking
areas designated by the Parking Operator or any parking garage manager as areas
for parking by visitors to the Project, (b) park or permit any Tenant Parties to
park in spaces reserved for the handicapped or for alternative fuel vehicles
unless the vehicle is properly designated, (c) leave vehicles in the Parking
Facilities overnight or for extended terms except that Tenant shall be permitted
to leave up to 10 vehicles (including any delivery trucks) in the Parking
Facilities overnight at all times and for extended terms or (d) park any
vehicles in the parking areas other than automobiles, motorcycles, motor driven
or non-motor driven bicycles or four wheeled trucks or delivery trucks.

 

3. Parking cards, stickers, or any other devices or forms of identification
supplied by the Parking Operator as a condition of use of the Parking Facilities
shall remain the property of the Parking Operator. If requested, such parking
identification device must be displayed as requested and may not be mutilated in
any manner. The serial number of the parking identification device may not be
obliterated. Devices are not transferable (other than in connection with an
assignment of the Lease or sublease of the Premises) and any device in the
possession of an unauthorized holder will be void.

 

4. Only small vehicles may be parked in areas designated for compact vehicles.

 

5. Vehicles must be parked nose in only (backing into parking spaces is
prohibited) and entirely within painted stall lines of a single parking stall.

 

6. All directional signs and arrows must be observed.

 

7. The speed limit within all parking areas shall be 5 miles per hour.

 

8. Parking is prohibited in any area other than those specifically designated
for parking, including areas not striped for parking, aisles, ramps and loading
zones.

 

9. The Parking Operator or the manager of the Parking Facilities, if any, may
restrict or prohibit full size vans or large vehicles which cannot clear the
entry of the parking structure from entering the Parking structure.

 

10. Delivery trucks and vehicles shall use only those areas designated therefor.

 

11. All parkers are required to park and lock their own vehicles. All
responsibility for damage to vehicles is assumed by the parker.

 

12. Loss or theft of parking identification or access devices must be reported
to the Parking Operator or the Parking Facilities manager, if any, immediately,
and a lost or stolen report must be filed by Tenant or user of such parking
identification or access device at the time. The Parking Operator and the
manager of the Parking Facilities, if any, has the right to exclude any vehicle
from the Parking Facilities that does not have an identification device.

 

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13. Any parking identification or access devices reported lost or stolen found
on any unauthorized vehicle will be confiscated.

 

14. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.

 

15. Neither the manager of the Parking Facilities, if any, nor any attendant is
authorized to make or allow any exceptions to these rules and regulations.

 

16. Tenant shall abide by these rules and regulations and the terms of this
Agreement.

 

17. The Parking Operator reserves the right to modify these rules and
regulations or adopt such other reasonable and nondiscriminatory rules and
regulations for the Parking Facilities as it deems necessary for the operation
of the Parking Facilities. The Parking Operator may refuse to permit any person
who violates these rules and regulations to park in the Parking Facilities, and
any violation of these rules and regulations shall subject the vehicle to
removal at such vehicle owner’s expense. If there are any conflicts between the
rules and regulations set forth in this Schedule E-2 and the terms and
conditions of the Parking Agreement set forth in Exhibit E, then the terms of
the Parking Agreement shall control.

 

 

 

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