Exhibit 10.1


 





ACCOUNTS
RECEIVABLE Line of Credit NOTE


 


September 5, 2014


 


$2,000,000.00


 


For value received,
the undersigned POINT.360, a California corporation (the "Borrower"), promises to pay to the order of Bank of
the West (together with its successors and assigns, the "Lender"), the principal amount of up to Two Million Dollars
and Zero Cents ($2,000,000.00) on or before September 30, 2015 (the "Expiration Date"), as set forth
below. The aggregate principal balance outstanding shall bear interest, and interest shall be payable, in accordance with that
certain Interest Rate Election Rider, attached hereto and made a part hereof (the "Interest Rate Election Rider").


 


On terms and conditions
as set forth herein, the Borrower may request advances (each an “Advance”) from time to time from the date hereof to
the Expiration Date of this Note (the “Accounts Receivable Line of Credit”), provided that no Advance shall be made
if at the time of or following such Advance, the aggregate amount of all Advances outstanding hereunder exceeds the Borrowing Base
(as defined in the Loan Agreement). Within the foregoing limits, the Borrower may borrow, partially or wholly prepay, and reborrow
as described herein. Each Advance shall be conclusively deemed to have been made at the request of and for the benefit of the Borrower
(i) when credited to any deposit account of the Borrower maintained with the Lender or (ii) when paid in accordance with the Borrower's
written instructions. Subject to the requirements herein, and provided such request is made in a timely manner as provided below,
Advances shall be made by the Lender under the Accounts Receivable Line of Credit.


 


This Note is entered
into in connection with one or more certain Loan and Security Agreements or Loan Agreements, dated August 13, 2012 (each
a "Loan Agreement" and collectively, the "Loan Agreements") between the Borrower and the Lender, and any capitalized
terms not defined herein shall have the meanings given to them in the Loan Agreements.


 


If at any time the
aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base (as defined in the Loan Agreement),
the Borrower hereby promises and agrees, immediately upon written or telephonic notice from the Lender, to pay to the Lender an
amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration
Date, the Borrower hereby promises and agrees to pay to the Lender in full the aggregate unpaid principal amount outstanding, together
with all accrued and unpaid interest and all other fees and charges owing to the Lender under this Note.


 


Principal and interest
shall be payable at the Lender's main office or at such other place as the Lender may designate in writing in immediately available
funds in lawful money of the United States of America without set-off, deduction or counterclaim. Interest shall be calculated
on the basis of actual number of days elapsed and a 360-day year. If interest is not paid as and when it is due, it shall be added
to the principal, become and be treated as a part thereof, and shall thereafter bear like interest.


 


“Business Day”
shall mean a day, other than a Saturday or Sunday, on which commercial banks are open for business in California.


 


The Borrower agrees
to pay to the Lender a commitment fee on the unused portion of the Accounts Receivable Line of Credit of 0.25% per annum, payable
quarterly in arrears, commencing September 30, 2014 and computed on a year of 360 days for actual days elapsed.


 


At the option of the
Lender, this Note shall become immediately due and payable upon default of any liability, obligation, covenant or undertaking of
the Borrower hereunder or the occurrence at any time of an Event of Default under the Loan Agreement.


 


Any payments received
by the Lender on account of this Note shall, at the Lender's option, be applied first, to accrued and unpaid interest; second,
to the unpaid principal balance, then any fees, or charges then owed to the Lender by the Borrower; with payments being applied
to installments remaining due in such order and amounts as the Lender may determine in its discretion. Notwithstanding the foregoing,
any payments received after the occurrence and during the continuance of an Event of Default shall be applied in such manner as
the Lender may determine. The Borrower hereby authorizes the Lender to charge any deposit account which the Borrower may maintain
with the Lender for any payment required hereunder without prior notice to the Borrower.


 



    	 



    	 



    




If pursuant to the
terms of this Note, the Borrower is at any time obligated to pay interest on the principal balance at a rate in excess of the maximum
interest rate permitted by applicable law for the loan evidenced by this Note, the applicable interest rate shall be immediately
reduced to such maximum rate and all previous payments in excess of the maximum rate shall be deemed to have been payments in reduction
of principal and not on account of the interest due hereunder. More specifically, if from any circumstances whatsoever, fulfillment
of any provision of this Note or any other loan document excuted and delivered in connection with this Note, at the time performance
of such provision becomes due, would exceed the limit on interest then permitted by any applicable usury statute or any other applicable
law, the Lender may, at its option (a) reduce the obligations to be fulfilled to such limit on interest, or (b) apply the amount
in excess of such limit on interest to the reduction of the outstanding principal balance of the obligations, and not to the payment
of interest, with the same force and effect as though Borrower had specifically designated such sums to be so applied to principal
and Lender had agreed to accept such extra payments(s) as a premium-free prepayment, so that in no event shall any exaction be
possible under this Note or any other loan document that is in excess of the applicable limit on interest. It is the intention
of Borrower and Lender that the total liability for payments in the nature of interest shall not exceed the limits imposed by any
applicable state or federal interest rate laws. The provisions of this paragraph shall control every other provision of this Note,
and any provision of any other loan document in conflict with this paragraph.


 


The Borrower represents
to the Lender that the proceeds of this Note will not be used for personal, family or household purposes or for the purpose of
purchasing or carrying margin stock or margin securities within the meaning of Regulations U and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Parts 221 and 224.


 


The Borrower grants
to the Lender a continuing lien on and security interest in any and all deposits or other sums at any time credited by or due from
the Lender to the Borrower and any cash, securities, instruments or other property of the Borrower in the possession of the Lender,
whether for safekeeping or otherwise, or in transit to or from the Lender (regardless of the reason the Lender had received the
same or whether the Lender has conditionally released the same) as security for the full and punctual payment and performance of
all of the liabilities and obligations of the Borrower to the Lender and such deposits and other sums may be applied or set off
against such liabilities and obligations of the Borrower to the Lender at any time, whether or not such are then due, whether or
not demand has been made and whether or not other collateral is then available to the Lender.


 


No delay or omission
on the part of the Lender in exercising any right hereunder shall operate as a waiver of such right or of any other right of the
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or any other right
on any future occasion. The Borrower and any other party obligated on account of this Note by contract, by operation of law or
otherwise (the Borrower and each Borrower, if more than one, and each such other party, an "Obligor"), regardless of
the time, order or place of signing, waive presentment, demand, protest, notice of intent to accelerate, notice of acceleration,
notice of dishonor, notice of protest and all other notices and demands of every kind in connection with the delivery, acceptance,
performance or enforcement of this Note, all suretyship defenses of any kind, in each case that would otherwise be available in
connection with this Note including, without limitation, any right (whether now or hereafter existing) to require the holder hereof
to first proceed against the Borrower, or any other party obligated on account of this Note, for any security, and assent to any
extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of collateral,
and to the addition or release of any other party or person primarily or secondarily liable and waives all recourse to suretyship
and guarantor defenses generally, including any defense based on impairment of collateral. To the maximum extent permitted by law,
the Borrower waives and terminates any homestead rights and/or exemptions respecting any premises under the provisions of any applicable
homestead laws, including without limitation, California Code of Civil Procedure Sections 704-710 et seq.


 


To the fullest extent
permitted by law, each Obligor waives:


 


(A) any rights
and defenses that are or may become available to such Obligor by reason of Sections 2787 to 2855, inclusive, of the California
Civil Code;


 



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(B) all rights
and defenses that such Obligor may have because any of the indebtedness hereunder is secured by real property; this means, among
other things: (i) the Lender may collect from an Obligor without first foreclosing on any real or personal property collateral
pledged by the Borrower or another Obligor; and (ii) if the Lender forecloses on any real property collateral pledged by the Borrower
or another Obligor: (1) the amount of such indebtedness may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and (2) the Lender may collect from an Obligor even
if the Lender, by foreclosing on the real property collateral, has destroyed any right such Obligor may have to collect from the
Borrower or another Obligor. This is an unconditional and irrevocable waiver of any rights and defenses each Obligor may have because
any of the indebtedness under this Note is secured by real property. These rights and defenses include, but are not limited to,
any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure;


 


(C) any right or
defense it may have at law or equity, including California Code of Civil Procedure Section 580a, to a fair market value hearing
or action to determine a deficiency judgment after a foreclosure.


 


The Borrower shall
indemnify, defend and hold the Lender and its directors, officers, employees, agents and attorneys (each an "Indemnitee")
harmless against any claim brought or threatened against any Indemnitee by the Borrower or by any other person (as well as from
attorneys' reasonable fees and expenses in connection therewith) on account of the Lender's relationship with the Borrower (each
of which may be defended, compromised, settled or pursued by the Lender with counsel of the Lender's selection, but at the expense
of the Borrower), except for any claim arising out of the gross negligence or willful misconduct of the Lender.


 


The Borrower agrees
to pay, upon demand, costs of collection of all amounts under this Note including, without limitation, principal and interest,
or in connection with the enforcement of, or realization on, any security for this Note, including, without limitation, to the
extent permitted by applicable law, reasonable attorneys' fees and expenses. If any payment due under this Note is unpaid for 15
days or more, the Borrower shall pay, in addition to any other sums due under this Note (and without limiting the Lender's other
remedies on account thereof), a late charge equal to 5.0% of such unpaid amount.


 


This Note shall be
binding upon the Borrower and upon its heirs, successors, assigns and legal representatives, and shall inure to the benefit of
the Lender and its successors, endorsees and assigns.


 


In the event that at
any time, a surety is liable upon only a portion of the Borrower's or any Obligor's obligations under this Note and the Borrower
provides partial satisfaction of any such obligation(s), each of the Borrower and each Obligor hereof, if any, hereby waives any
right it would otherwise have, under Section 2822 of the California Civil Code, to designate the portion of the obligations to
be satisfied. The designation of the portion of the obligation to be satisfied shall, to the extent not expressly made by the terms
of this Note, be made by the Lender rather than Borrower.


 


The liabilities of
the Borrower and each Borrower, if more than one, and any Obligor are joint and several; provided, however, the release by the
Lender of the Borrower or any one or more Obligors shall not release any other person obligated on account of this Note. Any and
all present and future debts of the Borrower to any Obligor are subordinated to the full payment and performance of all present
and future debts and obligations of the Borrower to the Lender. Each reference in this Note to the Borrower and each Borrower,
if more than one, and Obligor, is to such person individually and also to all such persons jointly. No person obligated on account
of this Note may seek contribution from any other person also obligated, unless and until all liabilities, obligations and indebtedness
to the Lender of the person from whom contribution is sought have been irrevocably satisfied in full. The release or compromise
by the Lender of any collateral shall not release any person obligated on account of this Note.


 


The Borrower authorizes
the Lender to complete this Note if delivered incomplete in any respect. A photographic or other reproduction of this Note may
be made by the Lender, and any such reproduction shall be admissible in evidence with the same effect as the original itself in
any judicial or administrative proceeding, whether or not the original is in existence.


 


This Note shall be
governed by federal law applicable to the Lender and, to the extent not preempted by federal law, the laws of the State of California
without giving effect to the conflicts of laws principles thereof.


 



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Any notices under or
pursuant to this Note shall be deemed duly received and effective if delivered in hand to any officer of agent of the Borrower
or Lender, or if mailed by registered or certified mail, return receipt requested, addressed to the Borrower or Lender at the address
set forth in the Loan Agreement together with a copy to Bank of the West, Asset Based Lending at 1977 Saturn Street, Monterey Park,
CA 91755 or as any party may from time to time designate by written notice to the other party.


 


The Borrower irrevocably
submits to the nonexclusive jurisdiction of any Federal or state court sitting in California, over any suit, action or proceeding
arising out of or relating to this Note. The Borrower irrevocably waives, to the fullest extent it may effectively do so under
applicable law, any objection it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that the same has been brought in an inconvenient forum. The Borrower hereby consents to any and
all process which may be served in any such suit, action or proceeding, (i) by mailing a copy thereof by registered and certified
mail, postage prepaid, return receipt requested, to the Borrower's, address shown below or as notified to the Lender and (ii) by
serving the same upon the Borrower(s) in any other manner otherwise permitted by law, and agrees that such service shall in every
respect be deemed effective service upon the Borrower.


 


Waiver Of Jury Trial.
THE BORROWER AND LENDER ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, AND THAT IT MAY BE WAIVED UNDER
CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW EACH PARTY, AFTER CONSULTING (OR HAVING THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF ITS CHOICE, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION RELATED TO THIS NOTE OR ANY OTHER DOCUMENT,
INSTRUMENT OR TRANSACTION BETWEEN THE PARTIES.


 


Judicial Reference
Provision. In the event the above Jury Trial Waiver is unenforceable, the parties elect to proceed under this Judicial Reference
Provision. With the exception of the items specified below, any controversy, dispute or claim between the parties relating to this
Note or any other document, instrument or transaction between the parties (each, a "Claim"), will be resolved by a reference
proceeding in California pursuant to Sections 638 et seq. of the California Code of Civil Procedure, or their successor sections,
which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to reference.
Venue for the reference will be the Superior Court in the County where real property involved in the action, if any, is located,
or in a County where venue is otherwise appropriate under law (the "Court"). The following matters shall not be subject
to reference: (i) nonjudicial foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies
(including without limitation set-off), (iii) appointment of a receiver, and (iv) temporary, provisional or ancillary remedies
(including without limitation writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions).
The exercise of, or opposition to, any of the above does not waive the right to a reference hereunder.


 


The referee shall be
selected by agreement of the parties. If the parties do not agree, upon request of any party a referee shall be selected by the
Presiding Judge of the Court. The referee shall determine all issues in accordance with existing case law and statutory law of
the State of California, including without limitation the rules of evidence applicable to proceedings at law. The referee is empowered
to enter equitable and legal relief, and rule on any motion which would be authorized in a court proceeding, including without
limitation motions for summary judgment or summary adjudication. The referee shall issue a decision, and pursuant to CCP §644
the referee's decision shall be entered by the Court as a judgment or order in the same manner as if tried by the Court. The final
judgment or order from any decision or order entered by the referee shall be fully appealable as provided by law. The parties reserve
the right to findings of fact, conclusions of law, a written statement of decision, and the right to move for a new trial or a
different judgment, which new trial if granted, will be a reference hereunder. AFTER CONSULTING (OR HAVING THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF ITS CHOICE, EACH PARTY AGREES THAT ALL CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE
AND NOT A JURY.


 


 



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Executed as of September
5, 2014.


 


			Borrower:



 


			POINT.360



 


 





	 	 	By:_________________________
			       Alan R. Steel, Chief Financial Officer



 


			2701 Media Center Drive



			Los Angeles, California



			90065



 


 


 


 


 


 


 


AR Line of Credit Note


 


 


 






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INTEREST
RATE ELECTION RIDER


 


		1.	INTEREST RATE(S); PAYMENTS AND PREPAYMENTS.



 


		1.1	Interest Rates. The Note shall bear interest at the following rate(s): (a) Two and One-Half
Percent (2.50%) above the Alternate Base Rate (as hereinafter defined) (an "Alternate Base Rate Advance"); or (b) Three
and One-Half Percent (3.50%) above the LIBOR Rate (as hereinafter defined) (a "LIBOR Rate Advance"); each an “Available
Rate.”



 


		1.2	Notice of Borrowing and Rate Selection. Upon written or telephonic notice which shall be
received by the Lender at or before 11:00 a.m. Pacific time on a Business Day, the Borrower may draw this loan by requesting an
Advance. The draw may be made on the day notice is received by the Lender, provided however, that if the Lender shall not have
received notice at or before 11:00 a.m. Pacific time on the day such request is made, such draw may, at the Lender's option, be
made on the next Business Day. Notice of any LIBOR Rate Advance shall be received by the Lender no later than two Business Days
prior to the day (which shall be a Business Day) on which the Borrower requests such LIBOR Rate Advance to be made. The notice
shall specify the effective date thereof (which shall be a Business Day), the type of interest rate and the amount to which the
interest rate shall apply, provided, however, for LIBOR Rate advances, the amount requested shall not be less than $100,000.00.
Any such notice shall be irrevocable and shall be subject to other terms and conditions set forth in this Note. For any interest
rate selected, the Lender shall record on the books and records of the Lender an appropriate notation evidencing such selection,
each repayment on account of the principal thereof and the amount of interest paid, and the Borrower authorizes the Lender to maintain
such records and make such notations and agrees that the amount shown on the books and records as outstanding from time to time
shall constitute the amount owing to the Lender pursuant to this Note, absent manifest error.



 


		1.3	Payments. The Borrower hereby promises and agrees to pay interest in arrears on all Advances
on the last calendar day of each month commencing September 30, 2014. If any payment required to be made by the Borrower
hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at then applicable rate during such extension. On the Expiration Date, the Borrower
hereby promises and agrees to pay to the Lender in full the aggregate unpaid principal amount outstanding, together with all accrued
and unpaid interest and all other fees and charges owing to the Lender under this Note.



 


		1.4	Interest Periods. Each Interest Period selected by the Borrower pursuant to the terms of
this Interest Rate Election Rider shall commence on the date selected and shall end on the last day of the time period the Borrower
shall elect, in each case as set forth in the definition of Interest Period in Paragraph 2.1 hereof; provided, however, that (a)
any Interest Period that would otherwise end on a day which is not a Business Day shall be extended to the next Business Day unless
such extension would carry such Interest Period into the next month, in which event such Interest Period shall end on the preceding
Business Day; (b) any Interest Period that begins on the last Business Day of a calendar month (or on a date for which there is
no numerically corresponding day in the calendar month during which such Interest Period is to end), shall (subject to clause (a)
above) end on the last Business Day of such calendar month; and (c) any Interest Period that would otherwise extend beyond the
Expiration Date shall end on the Expiration Date.



 


		1.5	Conversion of Outstanding Amounts. Upon written or telephonic notice which shall be received
by the Lender at or before 11:00 a.m. Pacific time on a Business Day, and so long as no Event of Default shall have occurred and
be continuing, the Borrower may, on the last Business Day of the then current Interest Period applicable to an Advance, convert
the rate on such Advance to another Available Rate. The conversion may be effective on the day notice is received by the Lender,
provided however, that if the Lender shall not have received notice at or before 11:00 a.m. Pacific time on the day such request
is made, such election may, at the Lender's option, become effective on the next Business Day, except that notice to select any
LIBOR Rate shall be received by the Lender no later than two Business Days prior to the day (which shall be a Business Day) on
which the Borrower requests such LIBOR Rate. The notice shall specify the date of such conversion and the amount to be converted.



 






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		1.6	End of Interest Period. If, at the end of the relevant Interest Period, and subject to all
of the terms and conditions applicable to a request that a new interest rate be selected, the Lender does not receive timely notice
to continue the existing rate or request another Available Rate, the Borrower shall be deemed to have selected an Alternate Base
Rate Advance.



 


		1.7	Unavailability of Rate. In the event that the effective interest rate(s) applicable to the
Borrower’s loan evidenced hereby shall cease to be published or has become unlawful or infeasible by reason of the Lender’s
compliance with any new law, rule, regulation, guideline or order, or any new interpretation of any present law, rule regulation,
guideline or order, the Lender, it is sole discretion shall designate a new base, reference or other rate for general commercial
loan reference purposes, it being understood that such rate is a reference rate, not necessarily the lowest, established from time
to time, which serves as the basis upon which effective interest rates are calculated for loans making reference thereto.



 


		1.8	Funding the Note. The Lender shall be entitled to fund all or any portion of the Note in
any manner it may determine in its sole discretion, but all calculations and transactions hereunder shall be conducted as set forth
herein without regard to the manner in which the Lender actually funded the Note.



 


		1.9	Indemnification for Costs. During any period of time in which interest on the Note is accruing
on the basis of an Available Rate other than one that adjusts on a daily basis, the Borrower shall, upon the Lender's request,
promptly pay to and reimburse the Lender for all costs incurred and payments made by the Lender by reason of any future assessment,
reserve, deposit or similar requirement or any surcharge, tax or fee imposed upon the Lender or as a result of the Lender's compliance
with any directive or requirement of any regulatory authority pertaining or relating to funds used by the Lender in quoting and
determining such Available Rate.



 


		1.10	Termination of Pricing Option. After the occurrence of an Event of Default, the Borrower’s
right to select pricing options, if applicable, shall cease, and, if the Borrower would, but for the application of the preceding
clause, have had the right to elect among interest rate options, notwithstanding anything to the contrary in this Note, interest
shall accrue at a rate per annum equal to 5.0% plus the current effective rate for an Alternate Base Rate Advance.



 


		1.11	Prepayment. Borrower may prepay amounts outstanding under this Note bearing interest at
an Available Rate in whole or in part provided that for any amounts outstanding subject to an Interest Period, Borrower has given
Lender not less than 5 Business Days prior written notice of Borrower’s intention to make such prepayment and pays to Lender
the Prepayment Fee (defined below) due as a result. The Prepayment Fee shall also be paid, if Lender, for any other reason, including
acceleration or foreclosure, receives all of any portion of the LIBOR Advance prior to its scheduled payment date. "Prepayment
Fee" is the positive amount, if any, equal to the present value of (i) the amount of interest that would have been paid through
the end of the current Interest Period on the principal amount being repaid at the LIBOR and minus (ii) the amount of interest
Lender would earn if the amount of such prepayment of principal was used to purchase a(n) LIBOR contract having a maturity date
most closely matching with the last day of the relevant Interest Period and such contract was held by Lender until the last day
of the relevant Interest Period. The rate used in the present value calculation shall be the rate of interest offered on the LIBOR
contract having a maturity most closely matching with the last day of the relevant Interest Period. The time period used in the
present value calculation shall be a fraction, the numerator of which is the number of days in the period between the date of prepayment
and the last date of the relevant Interest Period, and the denominator of which shall be 360 days.



 



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If the maturity of this Note is accelerated
by the Lender because of the occurrence of an Event of Default, the resulting acceleration shall be deemed to be an election on
the part of the Borrower to prepay this Note. Accordingly, there shall be added to the amount due after an Event of Default and
resulting acceleration, the fixed rate prepayment charge, calculated as above and using as the prepayment date the date on which
any tender of payment is made, and the Borrower agrees to pay the same.


 


The Borrower, by its signature below, hereby
expressly (i) waives any rights it may have under California Civil Code Section 2954.10 to prepay this Note, in whole or in part,
without penalty, upon acceleration of the maturity date, and (ii) agrees that if, for any reason, a prepayment of all or any portion
of the principal amount of this Note is made upon or following any acceleration of the maturity date by the Lender on account of
any Event of Default by the Borrower, then the Borrower shall be obligated to pay concurrently with such prepayment the fixed rate
prepayment charge specified in the foregoing paragraphs. By signing this provision in the space provided below, the Borrower hereby
declares that the Lender's agreement to make the loan evidenced by this Note constitutes adequate consideration, given individual
weight by the Borrower, for this waiver and agreement.


 


 


			Borrower:



 


			POINT.360






 





	 	 	 






	 	 	By:_________________________
			Alan R. Steel, Chief Financial Officer



 


 


2.    
DEFINITIONS


 


		2.1	Definitions. The following definitions are applicable to this Interest Rate Election Rider:



 


		a)	“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day or, (b) the Federal Funds Rate in effect on such day plus 1⁄2 of 1% or (c) the
Applicable Floating Rate on such date (or, if such date is not a Business Day, the immediately preceding Business Day). Any change
in the Alternate Base Rate due to a change in the Prime Rate or, the Federal Funds Rate or the Applicable Floating Rate shall be
effective from and including the effective date of such change in the Prime Rate or, the Federal Funds Rate or the Applicable Floating
Rate, respectively.



 


		b)	"Applicable Floating Rate" shall mean, as of any date, (a) the One-Month LIBOR Rate on
such day multiplied by the Statutory Reserve Rate plus (b) 1.00%, where "Statutory Reserve Rate" means a fraction (expressed
as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established
by the Board of Governors of the Federal Reserve System with respect to the One-Month LIBOR Rate for Eurocurrency funding (currently
referred to as "Eurocurrencies Liabilities" in Regulation D of the Board of Governors of the Federal Reserve System),
including those reserve percentages imposed pursuant to Regulation D, adjusted automatically and as of the effective date of any
change in any reserve percentage.



 



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		c)	“Federal Funds Rate” shall mean, for any day, the weighted average (rounded upwards,
if necessary to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by the Lender from three Federal funds brokers of recognized
standing selected by it.



 


		d)	“Interest Period” shall mean,



 


		i)	with respect to any LIBOR Rate Advance, one month.



 


		e)	“LIBOR Rate" shall mean the rate determined by the Lender as being the U.S. dollar London
Interbank Offered Rate for such periods appearing on the Bloomberg British Bankers Association LIBOR page BBAM - Official BBA LIBOR
Fixing at approximately 11:00 a.m. (London time) on the second Business Day prior to requesting a LIBOR Rate Advance, or the second
Business Day prior to the initial draw, or the second Business Day prior to the next Interest Period.



 


		f)	"One-Month LIBOR Rate" shall mean, on any day, the rate determined by the Lender as being
the U. S. dollar London Interbank Offered Rate for an interest period of one month appearing on the Bloomberg British Bankers Association
LIBOR page BBAM - Official BBA LIBOR Fixing at approximately 11:00 a.m. (London time).



 


		g)	“Prime Rate” shall mean the rate per annum from time to time established by the Lender
as the Prime Rate and made available by the Lender at its main office or, in the discretion of the Lender, the base, reference
or other rate then designated by the Lender for general commercial loan reference purposes, it being understood that such rate
is a reference rate, not necessarily the lowest, established from time to time, which serves as the basis upon which effective
interest rates are calculated for loans making reference thereto.



 


		2.2	Other Terms. Terms set forth in this Note which
are defined in the Note shall have the meanings set forth in the Note.



 


 



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