Document:

drrx-ex101_6.htm

Exhibit 10.1

DURECT CORPORATION 

2000 EMPLOYEE STOCK PURCHASE PLAN 

(as last amended June 19, 2017) 

The following constitute the provisions of the 2000 Employee Stock Purchase Plan of DURECT Corporation, as amended and restated effective as of the Restatement Effective Date (as defined below). 

	
1. 
	
Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 

	
2.
	
Definitions. 

	
 
	
(a)
	
“Administrator” means either the Board or a committee of the Board that is responsible for the administration of the Plan as is designated from time to time. 

	
 
	
(b)
	
“Applicable Laws” means the legal requirements relating to the administration of employee stock purchase plans, if any, under applicable provisions of federal securities laws, state corporate and securities laws, the Code and the applicable regulations thereunder, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to participation in the Plan by residents therein. 

	
 
	
(c)
	
“Board” means the Board of Directors of the Company. 

	
 
	
(d)
	
“Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific Section of the Code or regulation thereunder shall include such Section or regulation, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation. 

	
 
	
(e)
	
“Common Stock” means the Common Stock of the Company. 

	
 
	
(f)
	
“Company” means DURECT Corporation, a Delaware corporation. 

	
 
	
(g)
	
“Compensation” means all regular straight time gross earnings, and shall not include payments for overtime, shift premium, incentive compensation, incentive payments, bonuses, commissions and other compensation. 

	
 
	
(h)
	
“Continuous Status as an Employee” means the absence of any interruption or termination of service as an Employee. Continuous Status as an Employee shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than three months, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company and its Designated Subsidiaries. 

	
 
	
(i)
	
“Contributions” means all amounts credited to the account of a Participant pursuant to the Plan. 

	
 
	
(j)
	
“Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation. 

	
 
	
(k)
	
“Designated Parents or Subsidiaries” means the Parents or Subsidiaries which have been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan; provided however that the Administrator shall only have the discretion to designate Parents or Subsidiaries if the issuance of options to such Parent’s or Subsidiary’s Employees pursuant to the Plan would not cause the Company to incur adverse accounting charges. 

	
 
	
(l)
	
“Employee” means any person, including an Officer, who is customarily employed for at least twenty (20) hours per week and more than five (5) months in a calendar year by the Company or one of its Designated Subsidiaries. The Administrator, in its discretion, from time to time may, prior to an Offering Date for all options to be granted on such Offering Date, determine (on a uniform and nondiscriminatory basis) that the definition of Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works less than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee under Section 414(q) of the Code or is a highly compensated employee under Section 414(q) of the Code with compensation above a certain 

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level or who is also an officer or otherwise subject to the disclosure requirements of Section 16(a) of the Exchange Act), or (5) is a citizen or resident of a non-U.S. jurisdiction (without regard to whether he or she is also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A) of the Code)) if his or her participation is prohibited under the laws of the applicable non-U.S. jurisdiction or if complying with the laws of the applicable non-U.S. jurisdiction would cause the Plan or an Offering Period to violate Section 423 of the Code, provided the exclusion of Employees in such categories is not prohibited under Applicable Laws. 

	
 
	
(m)
	
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 

	
 
	
(n)
	
“Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 

	
 
	
(i)
	
If the Common Stock is listed on any established stock exchange or a national market system, including without limitation The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

	
 
	
(ii)
	
If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, but selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 

	
 
	
(iii)
	
In the absence of an established market for the Common Stock of the type described in (1) and (2), above, the Fair Market Value thereof shall be determined by the Administrator in good faith. 

	
 
	
(o)
	
“Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4. For purposes of the Plan, all Employees will be deemed to participate in the same Offering unless the Administrator otherwise determines that Employees of one or more Designated Parents or Subsidiaries will be deemed to participate in separate Offerings, in which case the Offerings will be considered separate even if the dates of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the extent permitted by Section 1.423-2(a)(1) of the Treasury regulations issued under Section 423 of the Code, the terms of each Offering need not be identical provided that the terms of the Plan and the Offering together satisfy Sections 1.423-2(a)(2) and (a)(3) of such Treasury regulations. 

	
 
	
(p)
	
“Offering Date” means the first Trading Day of each Offering Period of the Plan. 

	
 
	
(q)
	
“Offering Period” means, for periods that commenced prior to the Restatement Effective Date, a period of twenty-four (24) months commencing on May 1 and November 1 of each year. Effective as of November 1, 2010 (the “New Offering Period Commencement Date”), “Offering Period” means a period of approximately six (6) months commencing on May 1 and November 1 of each year, except as otherwise as set forth in Section 4(a). 

	
 
	
(r)
	
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 

	
 
	
(s)
	
“Ongoing Offering Periods” means the Offering Periods in effect as of the Restatement Effective Date. 

	
 
	
(t)
	
“Parent” means a “parent corporation” of the Company, whether now or hereafter existing, as defined in Section 424(e) of the Code. 

	
 
	
(u)
	
“Participant” means an Employee of the Company or Designated Parent or Subsidiary who has completed a subscription agreement as set forth in Section 5(a) and is thereby enrolled in the Plan. 

	
 
	
(v)
	
“Plan” means this Employee Stock Purchase Plan. 

	
 
	
(w)
	
“Purchase Date” means the last day of each Purchase Period of the Plan. 

	
 
	
(x)
	
“Purchase Period” means the period during an Offering Period in which Shares of Common Stock may be purchased on a Participant’s behalf in accordance with the terms of the Plan. Effective as of the New Offering Period Commencement Date, unless the Administrator provides otherwise, the Purchase Period for each Offering Period commencing on or after the New Offering Period Commencement Date will have the same duration and coincide with the length of the Offering Period. 

	
 
	
(y)
	
“Purchase Price” means with respect to a Purchase Period an amount equal to 85% of the Fair Market Value of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower. 

	
 
	
(z)
	
“Restatement Effective Date” means the date of the Company’s 2017 Annual Meeting of Stockholders. 

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(aa)
	
“Share” means a share of Common Stock, as adjusted in accordance with Section 19 of the Plan. 

	
 
	
(bb)
	
“Subsidiary” means a “subsidiary corporation” of the Company, whether now or hereafter existing, as defined in Section 424(f) of the Code. 

	
 
	
(cc)
	
“Trading Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading. 

	
3.
	
Eligibility. 

	
 
	
(a)
	
Any person who is an Employee as of the Offering Date of a given Offering Period shall be eligible to participate in such Offering Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code. No individual who is not an Employee shall be eligible to participate in the Plan. 

	
 
	
(b)
	
Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Parent or Subsidiary, or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Parents or Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. The determination of the accrual of the right to purchase stock shall be made in accordance with Section 423(b)(8) of the Code and the regulations thereunder. 

	
4.
	
Offerings, Offering Periods and Purchase Periods. 

	
 
	
(a)
	
Offering Periods. Prior to the New Offering Period Commencement Date, the Plan was implemented by a series of Offering Periods of approximately twenty-four (24) months duration, with new Offering Periods commencing on or about May 1 and November 1 of each year and ending on April 30 and October 31, respectively, approximately twenty-four (24) months later. Beginning on the New Offering Period Commencement Date, the Plan shall be implemented by consecutive Offering Periods of approximately six (6) months duration, with new Offering Periods commencing on or about May 1 and November 1 of each year (or at such other time or times as may be determined by the Administrator) and ending on the following October 31 and April 30, respectively. The Plan shall continue until terminated in accordance with Section 20 hereof. The Administrator shall have the power to change the duration and/or the frequency of Offering Periods with respect to future offerings without stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected. 

	
 
	
(b)
	
Purchase Periods for Ongoing Offering Periods. With respect to the Ongoing Offering Periods, each such Offering Period consists of four (4) consecutive Purchase Periods of six (6) months’ duration. The last day of each Purchase Period shall be the “Purchase Date” for such Purchase Period. A Purchase Period commencing on May 1 shall end on the next October 31 and a Purchase Period commencing on November 1 shall end on the next April 30. 

	
 
	
(c)
	
Offerings. Each option will be granted under the same Offering unless the Administrator otherwise designates separate Offerings for the Employees of one or more Designated Parents or Subsidiaries, in which case, each Participant’s option will be granted under the Offering designated for the Employees of the Designated Parent or Subsidiary that employs the Participant. 

	
5.
	
Participation. 

	
 
	
(a)
	
An eligible Employee may become a Participant in the Plan by completing a subscription agreement authorizing payroll deductions on the form provided by the Company (which may be similar to the form attached hereto as Exhibit A) and filing it with the designated payroll office of the Company (or by following an electronic or other procedure prescribed by the Administrator) within the time period specified by the Administrator for all eligible Employees with respect to the Offering Period in which such participation will commence. The subscription agreement shall set forth the percentage of the Participant’s Compensation (subject to Section 6(a) below) to be paid as Contributions pursuant to the Plan. 

	
 
	
(b)
	
Payroll deductions shall commence on the first full payroll paid following the Offering Date and shall end on the last payroll paid on or prior to the last Purchase Period of the Offering Period to which the subscription agreement is applicable, unless sooner terminated by the Participant as provided in Section 10. 

	
6.
	
Method of Payment of Contributions. 

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(a)
	
At the time a Participant files a subscription agreement, the Participant shall elect to have payroll deductions made on each payday during the Offering Period in an amount not less than one percent (1%) and not more than twenty percent (20%) (or such greater percentage as the Administrator may establish from time to time before an Offering Date) of such Participant’s Compensation on each payday during an Offering Period. All payroll deductions made by a Participant shall be credited to his or her account under the Plan and will be withheld in whole percentages only. A Participant may not make any additional payments into such account. 

	
 
	
(b)
	
A Participant may discontinue his or her participation in the Plan as provided in Section 10, or, on one occasion only during an Offering Period may increase and on one occasion only during an Offering Period may decrease the rate of his or her Contributions with respect to the Offering Period, by completing and filing with the Company a new subscription agreement authorizing a change in the payroll deduction rate (or by following an electronic or other procedure prescribed by the Administrator). If a Participant has not followed such procedures to change the rate of payroll deductions, the rate of his or her payroll deductions will continue at the originally elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in Section 10). Any change in rate of Contributions pursuant to the preceding sentence shall be effective as of the beginning of the next calendar month following the date of filing of the new written or electronic instructions, provided the agreement indicating such change is filed at least ten (10) business days prior to such date and, if not, then as of the beginning of the next succeeding calendar month (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly). 

	
 
	
(c)
	
Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a Participant’s payroll deductions may be decreased by the Company to 0% at any time during an Offering Period. Payroll deductions shall re-commence at the rate in effect immediately prior to such reduction pursuant to the Participant’s last written or electronic instructions at the time when permitted under Section 423(b)(8) of the Code and Section 3(b) herein, unless such participation is sooner terminated by the Participant as provided in Section 10. In addition, a Participant’s payroll deductions may be decreased by the Company to 0% at any time during a Offering Period in order to avoid unnecessary payroll contributions as a result of the application of the maximum share limit set forth in Section 7(a), in which case payroll deductions shall re-commence at the rate provided in such Participant’s subscription agreement at the beginning of the next Offering Period, unless terminated by the Participant as provided in Section 10. 

	
7. 
	
Grant of Option. On the Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase (at the applicable Purchase Price) on each Purchase Date a number of Shares of the Company’s Common Stock determined by dividing such Employee’s Contributions accumulated prior to such Purchase Date and retained in the Participant’s account as of the Purchase Date by the applicable Purchase Price; provided however that the maximum number of Shares an Employee may purchase during each Purchase Period shall be 2,000 Shares (subject to any adjustment pursuant to Section 19 below), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 14. Exercise of the option shall occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10, and the option, to the extent not exercised, shall expire on the last day of the Offering Period with respect to which such option was granted. Notwithstanding the foregoing, shares subject to the option may only be purchased with accumulated payroll deductions credited to a Participant’s account in accordance with Section 6 of the Plan. In addition, to the extent an option is not exercised on each Purchase Date, the option shall lapse and thereafter cease to be exercisable. 

	
8.
	
Exercise of Option. Unless a Participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of Shares will be exercised automatically on each Purchase Date of an Offering Period, and the maximum number of full Shares subject to the option will be purchased at the applicable Purchase Price with the accumulated Contributions that remain in his or her account as of the Purchase Date. No fractional Shares shall be purchased; any payroll deductions accumulated in a Participant’s account which are not sufficient to purchase a full Share shall be retained in the Participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10 below. Any other amounts left over in a Participant’s account after a Purchase Date shall be returned to the Participant. During his or her lifetime, a Participant’s option to purchase Shares hereunder is exercisable only by him or her. 

	
9.
	
Delivery. As soon as reasonably practicable after each Purchase Date of each Offering Period, the Company shall arrange the delivery to each Participant, as appropriate, the Shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that Shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that Shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such Shares. 

	
10.
	
Voluntary Withdrawal; Termination of Employment. 

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(a)
	
A Participant may withdraw all but not less than all the Contributions credited to his or her account under the Plan at any time prior to each Purchase Date by giving written notice to the Company. All of the Participant’s Contributions credited to his or her account will be paid to him or her promptly after receipt of his or her notice of withdrawal and his or her option for the current period will be automatically terminated, and no further Contributions for the purchase of Shares will be made during the Offering Period. If a Participant withdraws from an Offering Period, payroll deductions will not resume at the beginning of the succeeding Offering Period unless the Participant delivers to the Company a new subscription agreement. 

	
 
	
(b)
	
Upon termination of the Participant’s Continuous Status as an Employee prior to the Purchase Date of an Offering Period for any reason, including retirement or death, the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto under Section 14, and his or her option will be automatically terminated. 

	
 
	
(c)
	
In the event an Employee fails to remain in Continuous Status as an Employee of the Company for at least twenty (20) hours per week during the Offering Period in which the employee is a Participant, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated. 

	
 
	
(d)
	
A Participant’s withdrawal from an offering will not have any effect upon his or her eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by the Company. 

	
11. 
	
Automatic Withdrawal. To the extent permitted by any applicable laws, regulations or stock exchange rules, if the Fair Market Value of the Shares on an Offering Date for an Offering Period (the “New Offering Period”) commencing on or after the New Offering Period Commencement Date but during an Ongoing Offering Period is lower than the Fair Market Value of the Shares on the Offering Date for the Ongoing Offering Period, then every participant in the Ongoing Offering Period shall automatically be deemed to have (i) withdrawn from the Ongoing Offering Period at the close of the Purchase Period immediately preceding the New Offering Period and (ii) to have enrolled in such New Offering Period. All payroll deductions accumulated as of any withdrawal date pursuant to this Section 11 in a participant’s account after the exercise of his or her option at the close of the Purchase Period shall be returned to the participant.

 

	
12.
	
Interest. No interest shall accrue on the Contributions of a Participant in the Plan. 

	
13.
	
Stock. 

	
 
	
(a)
	
Subject to adjustment as provided in Section 19, the maximum number of Shares which shall be made available for sale under the Plan on Purchase Dates occurring on or after the Restatement Effective Date shall be 2,900,000 Shares. If the Administrator determines that, on a given Purchase Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Purchase Date, the Administrator may in its sole discretion provide (x) that the Company shall make a pro rata allocation of the Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants exercising options to purchase Common Stock on such Purchase Date, and continue all Offering Periods then in effect, or (y) that the Company shall make a pro rata allocation of the shares available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all Participants exercising options to purchase Common Stock on such Purchase Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 below. The Company may make pro rata allocation of the Shares available on the Offering Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s stockholders subsequent to such Offering Date. 

	
 
	
(b)
	
The Participant shall have no interest or voting right in Shares covered by his or her option until such shares are actually purchased on the Participant’s behalf in accordance with the applicable provisions of the Plan. No adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date of such purchase. 

	
 
	
(c)
	
Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse. 

	
14. 
	
Administration. The Plan shall be administered by the Administrator which shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Administrator shall, to the full extent permitted by Applicable Law, be final and binding upon all persons. Notwithstanding any provision to the contrary in this Plan, the Administrator may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures for jurisdictions outside of the United States. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, 

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the definition of Compensation, handling of payroll deductions, making of contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold payroll deductions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates which vary with local requirements. 

	
15.
	
Designation of Beneficiary. 

	
 
	
(a)
	
A Participant may file a written designation of a beneficiary who is to receive any Shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to the end of a Purchase Period but prior to delivery to him or her of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to the Purchase Date of an Offering Period. If a Participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 

	
 
	
(b)
	
Such designation of beneficiary may be changed by the Participant (and his or her spouse, if any) at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 

	
 
	
(c)
	
All beneficiary designations will be in such form and manner as the Administrator may designate from time to time. 

	
16. 
	
Transferability. Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 15) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 10. 

	
17. 
	
Use of Funds. All Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such Contributions. All Contributions received or held by the Company may be subject to the claims of the Company’s general creditors. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Designated Parent or Subsidiary and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of the Company or a Designated Parent or Subsidiary. The Participants shall have no claim against the Company or any Designated Parent or Subsidiary for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan. 

	
18.
	
Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to participating Employees at least annually, which statements will set forth the amounts of Contributions, the per Share Purchase Price, the number of Shares purchased and the remaining cash balance, if any. 

	
19.
	
Adjustments Upon Changes in Capitalization; Corporate Transactions. 

	
 
	
(a)
	
Adjustment. Subject to any required action by the stockholders of the Company, the number of Shares covered by each option under the Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under the Plan but have not yet been placed under option (collectively, the “Reserves”), as well as the maximum number of shares of Common Stock which may be purchased by a Participant in a Purchase Period, the number of shares of Common Stock set forth in Section 13(a) above, and the price per Share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock (including any such change in the number of Shares of Common Stock effected in connection with a change in domicile of the Company), (ii) any other increase or decrease in the number of Shares effected without receipt of consideration by the Company, or (iii) any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no 

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issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 

	
 
	
(b)
	
Corporate Transactions. In the event of a dissolution or liquidation of the Company, any Purchase Period and Offering Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Administrator. In the event of a Corporate Transaction, each option outstanding under the Plan shall be assumed or an equivalent option shall be substituted by the successor corporation or a parent or Subsidiary of such successor corporation. In the event that the successor corporation refuses to assume or substitute for outstanding options, each Purchase Period and Offering Period then in progress shall be shortened and a new Purchase Date shall be set (the “New Purchase Date”), as of which date any Purchase Period and Offering Period then in progress will terminate. The New Purchase Date shall be on or before the date of consummation of the transaction and the Administrator shall notify each Participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for his or her option has been changed to the New Purchase Date and that either: 

	
 
	
(i)
	
the Participant’s option will be exercised automatically on the New Purchase Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10; or 

	
 
	
(ii)
	
the Company shall pay to the Participant on the New Purchase Date an amount in cash, cash equivalents, or property as determined by the Administrator that is equal to the difference in the Fair Market Value of the shares subject to the option and the Purchase Price due had the Participant’s option been exercised automatically under Subsection (b)(i) above. 

For purposes of this Section 19, an option granted under the Plan shall be deemed to be assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan would be entitled to receive upon exercise of the option the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to the transaction, the holder of the number of Shares of Common Stock covered by the option at such time (after giving effect to any adjustments in the number of Shares covered by the option as provided for in this Section 19); provided however that if the consideration received in the transaction is not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per Share consideration received by holders of Common Stock in the transaction. 

	
20.
	
Amendment or Termination. 

	
 
	
(a)
	
The Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination of the Plan may affect options previously granted, provided that the Plan or an Offering Period may be terminated by the Administrator on a Purchase Date or by the Administrator’s setting a new Purchase Date with respect to an Offering Period and Purchase Period then in progress if the Administrator determines that termination of the Plan and/or the Offering Period is in the best interests of the Company and the stockholders or if continuation of the Plan and/or the Offering Period would cause the Company to incur adverse accounting charges as a result of a change after the effective date of the Plan in the generally accepted accounting rules applicable to the Plan. Except as provided in Section 19 and in this Section 20, no amendment to the Plan shall make any change in any option previously granted which adversely affects the rights of any Participant. In addition, to the extent necessary to comply with Applicable Laws, the Company shall obtain stockholder approval in such a manner and to such a degree as so required. 

	
 
	
(b)
	
Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, the Administrator shall be entitled to limit the frequency and/or number of changes in the amount withheld during Offering Periods, change the length of Purchase Periods within any Offering Period, determine the length of any future Offering Period, determine whether future Offering Periods shall be consecutive or overlapping, designated separate Offerings for the Employees of one or more Designated Parents or Subsidiaries, in which case the Offerings will be considered separate even if the dates of each such Offering are identical and the provisions of the Plan will separately apply to each Offering, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its 

7

pa-1783693 

	
 
		
sole discretion advisable and which are consistent with the Plan, in each case to the extent consistent with the requirements of Code Section 423 and other Applicable Laws. 

	
21.
	
Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 

	
22. 
	
Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned Applicable Laws or is otherwise advisable. In addition, no options shall be exercised or shares issued hereunder before the Plan shall have been approved by stockholders of the Company as provided in Section 24. 

	
23.
	
Term of Plan; Effective Date. The Plan became effective upon the effective date of the Registration Statement on Form S-1 for the initial public offering of the Company’s Common Stock. It shall continue in effect for a term of ten (10) years from the Restatement Effective Date unless sooner terminated under Section 20. 

	
24. 
	
Stockholder Approval. Continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. 

	
25.
	
No Employment Rights. The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or a Designated Parent or Subsidiary, and it shall not be deemed to interfere in any way with such employer’s right to terminate, or otherwise modify, an employee’s employment at any time. 

	
26.
	
No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Designated Parent or Subsidiary, participation in the Plan shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Designated Parent or Subsidiary, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended. 

	
27. 
	
Effect of Plan. The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Participant, including, without limitation, such Participant’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Participant. 

	
28.
	
Governing Law. The Plan is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties, except to the extent the internal laws of the State of California are superseded by the laws of the United States. Should any provision of the Plan be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 

 

8

pa-1783693 

 

Exhibit 2 

DURECT CORPORATION 

2000 EMPLOYEE STOCK PURCHASE PLAN 

SUBSCRIPTION AGREEMENT 

New Election              

Change of Election              

1.    I,             , hereby elect to participate in the DURECT Corporation 2000 Employee Stock Purchase Plan (the “Plan”) for the Offering Period             ,             to             ,             , and subscribe to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. 

2.    I elect to have Contributions in the amount of         % of my Compensation, as those terms are defined in the Plan, applied to this purchase. I understand that this amount must not be less than 1% and not more than 20% of my Compensation during the Offering Period. (Please note that no fractional percentages are permitted). 

3.    I hereby authorize payroll deductions from each paycheck during the Offering Period at the rate stated in Item 2 of this Subscription Agreement. I understand that all payroll deductions made by me shall be credited to my account under the Plan and that I may not make any additional payments into such account. I understand that all payments made by me shall be accumulated for the purchase of shares of Common Stock at the applicable purchase price determined in accordance with the Plan. I further understand that, except as otherwise set forth in the Plan, shares will be purchased for me automatically on the Purchase Date of each Offering Period unless I otherwise withdraw from the Plan by giving written notice to the Company for such purpose. 

4.    I understand that I may discontinue at any time prior to the Purchase Date my participation in the Plan as provided in Section 10 of the Plan. I also understand that I can increase or decrease the rate of my Contributions during an Offering Period by completing and filing with the Company a new Subscription Agreement with such increase or decrease taking effect as of the beginning of the next following calendar month, if filed at least ten (10) business days prior to the beginning of such month. Further, I may change the rate of deductions for future Offering Periods by filing a new Subscription Agreement, and any such change will be effective as of the beginning of the next Offering Period. In addition, I acknowledge that, unless I discontinue my participation in the Plan as provided in Section 10 of the Plan, my election will continue to be effective for each successive Offering Period. 

5.    I have received a copy of the Company’s most recent description of the Plan and a copy of the complete “DURECT Corporation 2000 Employee Stock Purchase Plan.” I understand that my participation in the Plan is in all respects subject to the terms of the Plan. 

6.    Shares purchased for me under the Plan should be issued in the name(s) of (name of employee or employee and spouse only): 

 

 

1

pa-1783693 

 

7.    In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due to me under the Plan: 

 

				
	
 
	
 
	
 
	
 

	
NAME: (Please print)
	
 
	
 
	
 

	
 
	
(First)
	
(Middle)
	
(Last)

	
(Relationship)
	
 
	
 
	
 

	
 
	
 

	
 
	
(Address)
	
 
	
 

	
Social Security #:                                       
	
 

	
 
	
 

	
Percentage Benefit:                                    
	
 

 

				
	
 
	
 

	
NAME: (Please print)
	
 

	
 
	
(First)
	
(Middle)
	
(Last)

	
(Relationship)
	
 
	
 
	
 

	
 
	
 

	
 
	
(Address)
	
 
	
 

	
Social Security #:                                      
	
 

	
 
	
 

	
Percentage Benefit:                                   
	
 

8.    I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Offering Date (the first day of the Offering Period during which I purchased such shares) or within 1 year after the Purchase Date, I will be treated for federal income tax purposes as having received ordinary compensation income at the time of such disposition in an amount equal to the excess of the fair market value of the shares on the Purchase Date over the price which I paid for the shares, regardless of whether I disposed of the shares at a price less than their fair market value at the Purchase Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss. 

I hereby agree to notify the Company in writing within 30 days after the date of any such disposition, and I will make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock. The Company shall be entitled, to the extent required by applicable law, to withhold from my Compensation any amount necessary to comply with applicable tax withholding requirements with respect to the purchase or sale of shares under the Plan. 

9.    If I dispose of such shares at any time after expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received compensation income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares under the option, or (2) 15% of the fair market value of the shares on the Offering Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss. 

I understand that this tax summary is only a summary and is subject to change. I further understand that I should consult a tax advisor concerning the tax implications of the purchase and sale of stock under the Plan. 

10.    I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 

2

pa-1783693 

 

 

		
	
 
	
 

	
NAME (print):                                                                   
	
 

	
 
	
 

	
SIGNATURE:                                                                     
	
 

	
 
	
 

	
SOCIAL SECURITY #:                                                    
	
 

	
 
	
 

	
DATE:                                                                                
	
 

	
 
	
 

	
SPOUSE’S SIGNATURE (necessary

if beneficiary is not spouse):
	
 

	
 
	
 

	
 
	
 

	
(Signature)
	
 

	
 
	
 

	
 
	
 

	
(Print name)
	
 

 

3

pa-1783693 

 

Exhibit 3 

DURECT CORPORATION 

2000 EMPLOYEE STOCK PURCHASE PLAN 

NOTICE OF WITHDRAWAL 

I,             , hereby elect to withdraw my participation in the DURECT Corporation 2000 Employee Stock Purchase Plan (the “Plan”) for the Offering Period that began on             ,             . This withdrawal covers all Contributions credited to my account and is effective on the date designated below. 

I understand that all Contributions credited to my account will be paid to me within ten (10) business days of receipt by the Company of this Notice of Withdrawal and that my option for the current period will automatically terminate, and that no further Contributions for the purchase of shares can be made by me during the Offering Period. 

The undersigned further understands and agrees that he or she shall be eligible to participate in succeeding offering periods only by delivering to the Company a new Subscription Agreement. 

 

		
	
 
	
 

	
Dated:                                                                                            
	
 

	
 
	
Signature of Employee

	
 
	
 

	
 
	
 

	
 
	
Social Security Number

 

 

 

 

1

pa-1783693PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	1
	 	 	 

 

THIS
PURCHASE AND SALE AGREEMENT (sometimes hereinafter referred to as the “Agreement”), dated and revised June 15, 2017,
is entered into between Carolco Pictures, Inc., a Florida corporation, and Metropolitan Sound + Vision LLC (sometimes hereinafter
referred to as “Metro”), a South Carolina corporation, and details the terms of the Purchase and Sale of S&G Holdings,
Inc. d/b/a High Five Entertainment (“the Company” and “High Five”), a Tennessee corporation.

 

RECITALS

 

WHEREAS,
Carolco Pictures, Inc. was incorporated under the laws of the State of Florida in February 2009 under the name York Entertainment,
Inc., changed its name to Brick Top Productions, Inc. in October 2010, and changed its name from Brick Top Productions, Inc. to
its current and active name Carolco Pictures, Inc. in January 2015 (collectively referred to herein as “Carolco”);
and

 

WHEREAS,
Carolco entered into a stock purchase agreement with Martin Fischer on December 24, 2013 pursuant to which Carolco acquired from
Mr. Fischer seventy-five (75%) percent of the issued and outstanding stock of S&G Holdings, Inc., a Tennessee corporation
doing business as High Five Entertainment, making the Company a majority owned and controlled subsidiary of Carolco; and

 

WHEREAS,
Carolco enjoys majority and operational control of the Company, including the right to unilaterally sell or otherwise dispose
of the Company and its assets on behalf of all its shareholders; and

 

WHEREAS,
Carolco wishes to sell to Metro, and Metro wishes to purchase from Carolco, 100% of the authorized, issued and outstanding stock
of the Company along with all of the assets of the Company, subject to the terms and conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE
I

DEFINITIONS

 

The
following terms used in this Agreement have the meanings as specified in this Article I:

 

“Action”
means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation,
citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, at law or
in equity.

 

“Asset”
means any real, physical or intellectual property or right that has monetary value that was owned
by the Company at the time of Carolco’s sale of the Company to Metro.

 

“Contracts”
means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint
ventures and all other agreements, commitments and legally binding arrangements, whether written or oral.

 

“Documents”
means this Agreement and any supporting documents or exhibits required by, included with, or attached to, this Agreement.

 

“Encumbrance”
means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option,
security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including
any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	2
	 	 	 

 

“Exploitation”
means the sale, lease, rental or other revenue-generating use by Metro of any real, physical or intellectual property
or right that has monetary value that was owned by the Company at the time of Carolco’s sale of the Company to Metro.

 

“GAAP”
means United States generally accepted accounting principles in effect from time to time.

 

“Governmental
Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or
instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory
authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

 

“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.

 

“Intellectual
Property” means all of the following and similar intangible property and related proprietary rights, interests and protections,
however arising, pursuant to the Laws of any jurisdiction throughout the world, that is owned by the Company (“Company Intellectual
Property”) and that in which the Company holds rights or interests granted by license from other Persons or Entities (“Licensed
Intellectual Property”): trademarks, service marks, trade names, brand names, logos, trade dress and other proprietary indicia
of goods and services, and all registrations and applications for registration of such trademarks including intent-to-use applications,
issuances, extensions and renewals of such registrations and applications, internet domain names registered in any top-level domain
by any authorized private registrar or Governmental Authority, original works of authorship in any medium of expression, whether
or not published, all copyrights whether registered or unregistered and all registrations and applications for registration of
such copyrights, and all issuances, extensions and renewals of such registrations and applications; confidential information,
formulas, designs, devices, technology, know-how, research and development, inventions, methods, processes, compositions and other
trade secrets, whether or not patentable; and patented and patentable designs and inventions, all design, plant and utility patents,
letters patent, utility models, pending patent applications and provisional applications and all issuances, divisions, continuations,
continuations-in-part, reissues, extensions, reexaminations and renewals of such patents and applications.

 

“Law”
means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other
requirement or rule of law of any Governmental Authority.

 

“Losses”
means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses
of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder
and the cost of pursuing any insurance providers; provided, however, that” Losses” shall not include punitive damages,
except in the case of fraud or to the extent actually awarded to a Governmental Authority or other third party.

 

“Material
Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become,
individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise)
or assets of the Company, or (b) the ability of Metro to consummate the transactions contemplated hereby on a timely basis.

 

“Person”
or “Entity” means an individual, corporation, partnership, joint venture, limited liability company, Governmental
Authority, unincorporated organization, trust, association or other bodies.

 

“Representative”
means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants
and other agents of such Person.

 

“Taxes”
means all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise,
registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise,
severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs,
duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	3
	 	 	 

 

ARTICLE
II

PURCHASE
AND SALE

 

2.01.
Purchase and Sale. Subject to the terms and conditions set forth herein, on or before July 1, 2017 Carolco shall sell and
deliver to Metro, and Metro shall purchase and take delivery from Carolco 100% of the authorized capital stock and the issued
and outstanding Common Stock, property and assets of the Company, free and clear of all Encumbrances except for those specifically
agreed to in this Agreement, on the purchase terms specified in 2.02. Upon execution of this Agreement, the sale will be immediate,
full, outright and irrevocable, and can only be changed under the circumstances described below under Article VI (below).

 

2.02.
Purchase Price. 

 

a.
The purchase price (“Purchase Price”) shall be $600,000.

 

b.
Simultaneous to Metro’s receipt of all elements detailed in 2.03, the purchase price shall be paid to Carolco by Metro as
follows:

 

i.
Initial Payment: Metro shall pay Carolco an initial payment of $10,000.

 

ii.
Future Payments: At the end of each fiscal quarter, beginning at the end the Third Fiscal Quarter of 2017, Metro shall pay Carolco
5% of gross revenues collected during the quarter by Metro via the Exploitation of the Company’s assets, up to a lifetime
maximum of $590,000, and shall provide documentation and accounting of all Exploitation to Carolco along with its quarterly payments.
Metro shall make no payments in any quarter in which no revenues are collected from the Exploitation of the Company’s assets

 

2.03.
Final Purchase and Sale. Subject to the terms and conditions of this Agreement, the final purchase and sale shall take place
as follows:

 

a.
This Agreement shall be executed by Metro and Carolco on or before June 15, 2017. Upon execution of this Agreement, the purchase
and sale will be immediate, full, outright and irrevocable, except under the specific circumstances described under Article VI
(below).

 

b.
Simultaneous to receipt of the elements detailed in 2.03.c. (below), Metro shall deliver to Carolco the Initial Payment of the
Purchase Price in immediately available funds.

 

c.
In Nashville, Tennessee on dates to be mutually agreed upon, but in no case later than July 1, 2017, Carolco shall deliver to
Metro the following:

 

i.
All Documents specified within this Agreement;

 

ii.
Stock certificates evidencing 100% of the Company’s shares, free and clear of all Encumbrances, duly endorsed in blank or
accompanied by stock powers or other instruments of transfer duly executed in blank, with all required stock transfer tax stamps
affixed thereto;

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	4
	 	 	 

 

iii.
All approvals, consents, releases and waivers required by Metro including but not limited to a written Company resolution authorizing
the sale of the Company, and such other documents or instruments as Metro may reasonably request to consummate the transactions
contemplated by this Agreement.

 

iv.
A good standing certificate or certificate of existence for the Company from the State of Tennessee or similar Governmental Authority
of the jurisdiction under the Laws in which the Company is organized.

 

v.
A fully-executed copy of the Waiver and Release attached below as Exhibit A (attached);

 

vi.
Copies of documents, receipts and cancelled checks which document Carolco’s payment, satisfaction and settlement of the
following debts, obligations or liabilities of the Company:

 

1.
Debt, obligation or liability of the Company to its former landlord Colliers International, which the parties hereby agree shall
be paid and/or settled prior to July 31, 2017;

 

2.
Debt, obligation or liability of the Company to the State of Tennessee;

 

3.
The debt, obligation or liability of the Company to Martin Fischer is hereby agreed by both Metro and Carolco to have been fully
and irrevocably settled and resolved by the Mutual Release executed by Fischer and Carolco and attached to this Agreement as Exhibit
B;

 

4.
Debts, obligations or liabilities of the Company to any other vendors, suppliers, individuals or entities.

 

vii.
(deleted)

 

viii.
A certificate of tax compliance for the Company from the State of Tennessee.

 

ix.
All of the property and assets of the Company, accompanied by a full and complete inventory attached to and made part of a Bill
of Sale evidencing the transfer of all property and assets of the Company to Metro, such delivery to include but not be limited
to:

 

1.
All High Five name(s), logo(s) and trademark(s) used from 1982-2017;

 

2.
All extant High Five records, files, artwork and literary, financial and creative archives accumulated from 1982-2017;

 

3.
All extant High Five physical property and assets, furnishings and equipment acquired from 1982-2017;

 

4.
All High Five ownership interests, partnerships, contractual participations and royalties in projects, properties or concepts
owned or controlled by both High Five and third parties, entered into from 1982-2017; and all contracts and proceeds from such
contracts that currently exist between High Five and third parties;

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	5
	 	 	 

 

5.
All intellectual property owned by the Company, including but not limited to literary, creative and copyright assets and properties
amassed from 1982-2017;

 

6.
All elements pertaining to High Five’s online presence, including but not limited to its social media sites and pages, domain
name(s), online pages and designs, email servers or programs, and underlying work product and files used to create and maintain
its online presence, web pages and other social media and email accounts; the contact information for designers, programmers,
server companies or other entities or individuals who work on or otherwise maintain and operate the Company’s online presences;
and all security access codes, passwords and documentation required to access all the Company’s online accounts;

 

7.
Bank account records, information, charge cards, checkbooks and other materials related to the Company’s banking operations;

 

8.
Insurance records, policies, documents and other materials and documents related to the Company’s insurance coverage and
broker relationships;

 

9.
The addresses, keys and/or access codes to storage facilities where the Company’s property and assets are held;

 

10.
Carolco will also provide such personnel or documentation as is required to remove the Company’s former officers and replace
them with representatives of Metro on the Company’s bank accounts, storage facilities, telephone and internet accounts,
insurance policies and any other accounts.

 

2.04
Taxes Deducted From Payments. Metro shall be entitled to deduct from the Purchase Price all Taxes that Carolco and the Company
owes to any state or Federal entity as relates to the assets, if any, either as currently due or past due. The parties agree that
all such deducted amounts shall be treated as delivered to Carolco hereunder as Future Payments under 2.02.b.ii.

 

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES OF CAROLCO

 

Carolco
represents and warrants to Metro that the statements contained in this Article III are true and correct as of the date hereof.

 

3.01
Organization and Authority of Carolco. Carolco is a corporation duly organized, validly existing and in good standing under
the Laws of the State of Florida. Carolco has full power and authority to enter into both this Agreement and other Documents to
which Carolco is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated
hereby and thereby. This Agreement has been duly executed and delivered by Carolco, and assuming due authorization and execution
by Metro, this Agreement constitutes a legal, valid and binding obligation of Carolco enforceable against Carolco in accordance
with its terms.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	6
	 	 	 

 

3.02
Organization, Authority and Qualification of the Company. The Company is a corporation duly organized, validly existing and
in good standing under the Laws of the State of Tennessee and has full corporate power and authority to own, operate or lease
the properties and assets now owned, operated or leased by it, and to carry on its business as it has been and is currently conducted.
The Company is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business as currently conducted makes such licensing or qualification necessary.
All corporate actions taken by the Company in connection with this Agreement will be duly authorized on or prior to the sale.

 

3.01
Capitalization.

 

a.
The authorized capital stock of the Company consists of 5,000 shares of common stock, no par value (“Common Stock”),
of which 1,200 shares are issued and outstanding. All of the issued and outstanding Common Stock has been duly authorized, is
validly issued, fully paid and non-assessable, and is owned of record and beneficially by Carolco, Martin Fischer, Nic Dugger,
and Dale Jensen. The shares are free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this
Agreement, Metro shall own 100% of all the authorized capital stock of the Company, issued and unissued, free and clear of all
Encumbrances.

 

b.
All of the issued and outstanding Common Stock was issued in compliance with applicable Laws. None of the issued and outstanding
Common Stock was issued in violation of any agreement, arrangement or commitment to which Carolco or the Company is a party or
is subject to or in violation of any preemptive or similar rights of any Person.

 

c.
There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or
commitments of any character relating to the capital stock of the Company or obligating Carolco or the Company to issue or sell
any shares of capital stock of, or any other interest in, the Company. The Company does not have outstanding and has not authorized
any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements,
proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the shares.

 

3.04
No Subsidiaries. The Company does not own, or have any interest in any shares or have an ownership interest in any other Person
or Entity. The Company is doing business as High Five Entertainment.

 

3.05
No Conflicts; Consents. The execution, delivery and performance by Carolco of this Agreement and the other specified Documents
to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict
with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other
organizational documents of the Company; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental
Order applicable to Carolco or the Company; (c) require the consent, notice or other action by any Person or Entity under, conflict
with, result in a violation or breach of, constitute a default or an event that, with or without notice or lapse of time or both,
would constitute a default under, result in the acceleration of or create in any party the right to accelerate, sterminate, modify
or cancel any Contract to which Carolco or the Company is a party or by which Carolco or the Company is bound or to which any
of their respective properties and assets are subject (including any Material Contract) or any Permit affecting the properties,
assets or business of the Company; or (d) result in the creation or imposition of any Encumbrance other than Permitted Encumbrances
on any properties or assets of the Company. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice
to, any Governmental Authority is required by or with respect to Carolco or the Company in connection with the execution and delivery
of this Agreement and the other specified Documents and the consummation of the transactions contemplated hereby and thereby.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	7
	 	 	 

 

3.06
Financial Statements. In addition to the deliverable items detailed in 2.03.c. (above), complete copies of the Company’s
financial statements consisting of the balance sheet of the Company and the related statements of income and retained earnings,
stockholders’ equity and cash flow as at December 31, 2016 (the “Financial Statements”), and financial statements
consisting of the balance sheet of the Company and the related statements of income and retained earnings, stockholders’
equity and cash flow as at July 1, 2017, (the “Interim Financial Statements” and together with the Financial Statements,
the “Financial Statements”) will be delivered to Metro. The Financial Statements have been prepared in accordance
with GAAP applied on a consistent basis throughout the period involved, subject, in the case of the Interim Financial Statements,
to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that,
if presented, would not differ materially from those presented in the Financial Statements). The Financial Statements are based
on the books and records of the Company, and fairly present the financial condition of the Company as of the respective dates
they were prepared and the results of the operations of the Company for the periods indicated. The balance sheet of the Company
as of December 31, 2016, is referred to herein as the “Balance Sheet” and the date thereof as the “Balance Sheet
Date” and the balance sheet of the Company as of July 1, 2017, is referred to herein as the “Interim Balance Sheet”
and the date thereof as the “Interim Balance Sheet Date”. The Company maintains a standard system of accounting established
and administered in accordance with GAAP.

 

3.07
Disclosed Liabilities. Carolco warrants and represents that the Company has no other liabilities, obligations or commitments
of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured
or otherwise, except for the following, which Metro and Carolco hereby agree will be disposed of prior to July 1, 2017 as indicated:

 

a.
An amount of $33,334 which as of the date of this Agreement is due and payable to the Company’s former landlord Colliers
International. Carolco will pay or settle this debt prior to July 31, 2017 and provide documentation to Metro as detailed in 2.03.c.vi.
(above).

 

b.
An amount of $6,591 which as of the date of this Agreement is due and payable to the State of Tennessee. Carolco will pay or settle
this debt prior to July 1, 2017 and provide documentation to Metro as detailed in 2.03.c.vi. (above).

 

c.
An amount of $39,656 which as of the date of this Agreement is due and payable to Martin Fischer has been fully and irrevocably
settled and resolved by the Mutual Release executed by Fischer and Carolco and attached to this Agreement as Exhibit B.

 

d.
The Company presently has a Line of Credit in amount of $75,000, which as of the date of this Agreement is due and payable to
SunTrust Bank. SunTrust has agreed that this debt will remain with the Company and will be transferred to Metro along with the
Company’s stock, property and assets.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	8
	 	 	 

 

e.
A Promissory Note was executed by the Company and Carolco on July 26, 2016 for the amount of $25,000, which amount was received
by the Company on July 27, 2016. The Company repaid $10,000 on September 1, 2016 and $10,000 on October 21, 2106, leaving a balance
of $5,000 as of December 31, 2017. For good and valuable consideration, Carolco hereby warrants, represents and agrees that this
balance has been fully satisfied and that neither Metro nor the Company owes anything further to Carolco regarding the Promissory
Note.

 

3.08
Undisclosed Liabilities. If any additional liabilities, obligations or commitments of any nature except Tax Liabilities are
asserted or unasserted, known or unknown, absolute or contingent, disclosed or undisclosed, accrued or unaccrued, matured or unmatured,
or otherwise, and brought to Metro’s attention, Carolco agrees to pay them immediately when presented with documentation
of such undisclosed liability, either (i) in cash or (ii) in a reduction of its Initial Payment or Future Payments at the rate
of the actual liability plus a 10%. However, if payments, penalties and/or fees resulting from undisclosed Tax Liabilities are
levied upon the Company, upon presentation of documentation of Metro shall have the right to deduct such payments, penalties and/or
fees from the Purchase Price and such amounts shall be treated as delivered to Carolco hereunder as Future Payments under 2.02.b.ii.

 

3.09
Absence of Certain Changes, Events and Conditions. With respect to the Company, since the Balance Sheet Date there has not
been any:

 

a.
Event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect;

 

b.
Issuance, sale or other disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase
or obtain (including upon conversion, exchange or exercise) any of its capital stock;

 

c.
Declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase
or acquisition of its capital stock;

 

d.
Material change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed
in the notes to the Financial Statements;

 

e.
Entry into any Contract that would constitute a Material Contract;

 

f.
Incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities
incurred in the ordinary course of business consistent with past practice;

 

g.
Transfer, assignment, sale or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation of
any debts or entitlements;

 

h.
Transfer, assignment or grant of any license or sublicense of any material rights under or with respect to any Intellectual Property;

 

i.
Acceleration, termination, material modification to or cancellation of any material Contract (including, but not limited to, any
Material Contract) to which the Company is a party or by which it is bound;

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	9
	 	 	 

 

j.
Imposition of any Encumbrance upon any of the Company properties, capital stock or assets, tangible or intangible;

 

k.
Action by the Company to make, change or rescind any Tax election, amend any Tax Return or take any position on any Tax Return,
take any action, omit to take any action or enter into any other transaction that would have the effect of increasing the Tax
liability or reducing any Tax asset of Metro in respect of any Post-Sale Tax Period; or

 

l.
Any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

 

3.10
Title to Assets and Property. The Company has good and valid title to all its property and other assets as presented in the
full and complete inventory required under 2.03.c.ix. (above), and warrants that all such properties and assets are free and clear
of Encumbrances except for those listed under 3.07 (above).

 

3.11
Accounts Receivable. The accounts receivable reflected on the Interim Balance Sheet and the accounts receivable arising after
the date thereof (a) have arisen from bona fide transactions entered into by the Company involving the sale of goods or the rendering
of services in the ordinary course of business consistent with past practice; (b) constitute only valid, undisputed claims of
the Company not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the
ordinary course of business consistent with past practice. The reserve for bad debts shown on the Interim Balance Sheet or, with
respect to accounts receivable arising after the Interim Balance Sheet Date, on the accounting records of the Company have been
determined in accordance with GAAP, consistently applied, subject to normal year-end adjustments and the absence of disclosures
normally made in footnotes.

 

3.12
Insurance. Carolco will provide to Metro a true and complete list of all current policies or binders of fire, liability, product
liability, umbrella liability, real and personal property, workers’ compensation, vehicular, directors and officers’
liability, fiduciary liability and other casualty and property insurance maintained by the Company, if any, or by Carolco or its
Affiliates on behalf of the Company) and relating to the assets, business, operations, employees, officers and directors of the
Company (collectively the “Insurance Policies”). The Insurance Policies, if any, are of the type and in the amounts
customarily carried by entities conducting a business similar to the Company and are sufficient for compliance with all applicable
Laws and Contracts to which the Company is a party or by which it is bound.

 

3.13
Legal Proceedings. Carolco warrants and represents that:

 

a.
There are no Actions pending or threatened against or by the Company affecting any of its properties or assets (or by or against
Carolco or any Affiliate thereof and relating to the Company), except for a suit filed in Davidson County General Sessions Court
by Colliers International seeking lease payments for the Company’s former offices at the St. Cloud building, which Carolco
has herein agreed to settle prior to July 31, 2017. See 3.07.a and 2.03.c (above).

 

b.
There are no Actions pending or threatened against or by the Company, Carolco or any Affiliate of Carolco that challenges or seeks
to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. Further, to Carolco’s knowledge,
no event has occurred and no other circumstances exist that may give rise to, or serve as a basis for, any other Action against
the Company.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	10
	 	 	 

 

c.
There are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against or affecting the Company
or any of its properties or assets.

 

3.14
Compliance With Laws. To Carolco’s knowledge, the Company has complied, and is now complying, with all Laws applicable
to it or its business, properties or assets, and is currently and has been in compliance with all Environmental Laws and has not,
and Carolco has not, received from any Person any: (i) Environmental Notice or Environmental Claim; or (ii) written request for
information pursuant to Environmental Law, which, in each case, either remains pending or unresolved, or is the source of ongoing
obligations or requirements as of the date of this Agreement.

 

3.15
Employment Matters. Carolco warrants and represents that, as of the date hereof, the Company is presently inactive, has no
employees, is not hiring, is not party to any employment or services agreements with any independent contractors, and there are
no outstanding agreements, understandings or commitments of the Company with respect to any compensation of any kind to any Person
or Entity, including wages, commissions, bonuses, pensions, benefits, deferred or retirement compensation, profit-sharing, incentives,
performance awards, phantom equity, stock or stock-based, change in control, retention, severances, vacations, paid time off,
fringe-benefits and other similar agreements, plans, policies, programs or arrangements. With the exception of Martin Fischer,
any sums due and payable prior to the date hereof to employees, independent contractors, consultants and any other Persons or
Entities have been paid in full.

 

3.16
Taxes. Carolco warrants and represents:

 

a.
All Tax Returns required to be filed by the Company for 2014, 2015 and 2016 have either been filed or are in progress and will
be filed before December 31, 2017 by Carolco. Such Tax Returns are, or will be, true, complete and correct in all respects. All
Taxes due and owing by the Company (whether or not shown on any Tax Return), have been, or will be, timely paid.

 

b.
The Company has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting
and backup withholding provisions of applicable Law.

 

c.
No claim has been made by any taxing authority in any jurisdiction where the Company does not file Tax Returns that it is, or
may be, subject to Tax by that jurisdiction.

 

d.
The Company is not a party to any Action by any taxing authority. There are no pending or threatened Actions by any taxing authority.

 

3.17
Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in
connection with the transactions contemplated by this Agreement or any other Document based upon arrangements made by or on behalf
of either Carolco or Metro.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	11
	 	 	 

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES OF METRO

 

Metro
represents and warrants to Carolco that the statements contained in this Article IV are true and correct as of the date hereof.

 

4.01
Organization and Authority of Metro. Metro is a corporation duly organized, validly existing and in good standing under the
Laws of the State of South Carolina. Metro has full power and authority to enter into both this Agreement and other specified
Documents to which Metro is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly executed and delivered by Metro, and assuming due authorization
and execution by Carolco, this Agreement constitutes a legal, valid and binding obligation of Metro enforceable against Metro
in accordance with its terms.

 

4.02
No Conflicts; Consents. The execution, delivery and performance by Metro of this Agreement and other specified Documents to
which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict
with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other
organizational documents of Metro; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental
Order applicable to Metro; or (c) require the consent, notice or other action by any Person under any Contract to which Metro
is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority
is required by or with respect to Metro in connection with the execution and delivery of this Agreement and other specified Documents
Documents and the consummation of the transactions contemplated hereby and thereby, except for such consents, approvals, Permits,
Governmental Orders, declarations, filings or notices which, in the aggregate, would not have a Material Adverse Effect.

 

ARTICLE
V

COVENANTS
AND INDEMNIFICATION

 

5.01
Further Assurances. Following the sale, each of the parties hereto shall, and shall cause their respective Affiliates to,
execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be
reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

5.02
Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained
herein shall survive the sale and shall remain in full force and effect indefinitely except where limited by applicable statutes
of limitations under Law. All covenants and agreements of the parties contained herein shall survive the sale indefinitely or
for any period which is explicitly specified therein.

 

5.03
Indemnification By Carolco. Subject to the other terms and conditions of this Article V, Carolco shall indemnify and defend
each of Metro and its Affiliates (including the Company) and their respective Representatives (collectively, the “Metro
Indemnitees”) against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for,
any and all Losses incurred or sustained by, or imposed upon, the Metro Indemnitees based upon, arising out of, with respect to
or by reason of any inaccuracy in or breach of any of the representations or warranties of Carolco contained in this Agreement
or in any certificate or instrument delivered by or on behalf of Carolco pursuant to this Agreement; or any breach or non-fulfillment
of any covenant, agreement or obligation to be performed by Carolco pursuant to this Agreement.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	12
	 	 	 

 

5.04
Indemnification By Metro. Subject to the other terms and conditions of this Article VI, Metro shall indemnify and defend each
of Carolco and its Affiliates and their respective Representatives (collectively, the “Carolco Indemnitees”) against,
and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred
or sustained by, or imposed upon, the Carolco Indemnitees based upon, arising out of, with respect to or by reason of any inaccuracy
in or breach of any of the representations or warranties of Metro contained in this Agreement or in any certificate or instrument
delivered by or on behalf of Metro pursuant to this Agreement; or any breach or non-fulfillment of any covenant and agreement
to be performed by Metro pursuant to this Agreement.

 

ARTICLE
VI

CAROLCO’S
RIGHT TO REPURCHASE

 

6.01
Mechanism For Carolco To Repurchase The Company. Metro shall use its best professional efforts to generate revenue from the
Exploitation of the Company’s assets, a portion of which shall be paid to Carolco as specified in 2.02.b. (above). If Carolco
has not received from Metro before July 1, 2022 a total of 35% of the lifetime maximum purchase price specified in 2.02.b.ii.
(above), Carolco shall have the right to repurchase the stock and assets of the Company from Metro for $10,000. However, if Carolco
receives from Metro before July 1, 2022 a total of 35% of the lifetime maximum purchase price defined in 2.02.b.ii. (above), Carolco
shall have no further right to repurchase the stock and assets of the Company, but will continue to receive from Metro on a quarterly
basis 5% of gross revenues generated by Metro’s exploitation of the Company’s assets until Carolco has received the
lifetime maximum purchase price defined in 2.02.b.ii. (above).

 

ARTICLE
VII

MISCELLANEOUS

 

7.01
Acknowledgement of Risk. The finance, production and distribution of filmed and televised entertainment is highly speculative,
very competitive and involves a substantial degree of risk. The major risks involved in any film or television venture are those
of the marketplace. Production costs are generally significant, distribution and playtime is uncertain, and audience response
is unpredictable. Many films and television productions do not generate net profits. Metro and its production and financial partners
have developed a plan they believe will minimize such risk and permit the exploitation of the Company’s assets. However,
the risk remains that any given effort in this area may not produce enough revenues to cover the costs of development, production
and distribution. An additional investment risk associated with the type of film and television production Metro will undertake
is that of delayed return. Although Metro is optimistic about its plans, there is no way to accurately predict how long it will
take to monetize the Company’s assets. Therefore, Carolco may not see an immediate flow of their portion of the revenue
Metro hopes to generate.

 

7.02
Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements
of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	13
	 	 	 

 

7.03
Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing
and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); or (b) when received
by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by facsimile
or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on
the next Business Day if sent after normal business hours of the recipient. Such communications must be sent to the respective
parties at the following addresses:

 

	If to Carolco:		Alexander
Bafer
	 	 	Chairman
Of The Board and CEO, Carolco Pictures, Inc.
	 	 	5550
Glades Road, Suite 500, Boca Raton FL 33431
	 	 	C
(561) 504-4806 / abafer@carolcopictures.com
	 	 	 
	If
to Metro:	 	Bud Schaetzle
	 	 	President/CEO,
Metropolitan Sound + Vision LLC
	 	 	737
Ingram Street, Sumter SC 29150
	 	 	T
(818) 434-3366 / budschaetzle@mac.com

 

7.04
Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable
such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal
or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent
of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated
as originally contemplated to the greatest extent possible.

 

7.05
Entire Agreement. This Agreement along with its Exhibits constitutes the sole and entire agreement between the parties with
respect to the subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings and agreements,
both written and oral, with respect to such subject matter. This Agreement and its Exhibits may only be amended, modified, or
supplemented in writing signed by each party.

 

7.06
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Either party may assign its rights and obligations hereunder without the consent of the other
party, but such assigning party must contractually secure from such successors and assigns the performance of and adherence to
the rights and obligations specified hereunder.

 

7.07
No Third-party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors
and assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

7.08
Force Majeure. If because of fire, earthquake, labor dispute or strike, act of God or public enemy, any municipal ordinance,
any state or federal law, governmental order or regulation, or other cause beyond Metro’s control, Metro is prevented from
or hampered in the performance of its obligations under this Agreement, or because of any other cause or occurrence not within
Metro’s control, including but not limited to the death, illness or incapacity of its principal Bud Schaetzle, the performance
of Metro’s performance and/or normal business operations are hampered, interrupted or interfered with (“Metro Disability”),
then Metro may postpone or suspend its operations and the running of time hereunder for such time as the Metro Disability continues
up to a maximum of one year from the initial cause or occurrence, and such suspension shall end upon the cessation of the cause
of it. If after one year the Disability is deemed to be permanent, Metro will appoint successors and assigns to fulfill its obligations
under this Agreement.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	14
	 	 	 

 

7.09
Carolco Default. If Carolco fails or refuses to deliver to Metro the assets, properties and documents specified herein within
the respective periods specified, or if Carolco otherwise fails or refuses to perform or comply with any of the terms or conditions
hereof (“Carolco Default”), then Metro shall notify Carolco specifying the nature of the Default and Carolco shall
have a period of 72 hours after receiving such notice to cure the Carolco Default. If the Carolco Default is not cured within
said period, Metro may suspend the Agreement and the running of time of the Agreement hereunder as long as the Carolco Default
shall continue.

 

7.10
Metro Default. If Metro fails or refuses to make payments to Carolco as specified herein, or if Metro otherwise fails or refuses
to perform or comply with any of the terms or conditions hereof (“Metro Default”), then Carolco shall notify Metro
specifying the nature of the Metro Default and Metro shall have a period of thirty (30) days after receiving such notice to cure
the Metro Default. If the Metro Default is not cured within said period, Carolco may, as applicable, pursue resolution under Article
VI (above) or 7.13 (below).

 

7.11
Publicity Restrictions. Unless first approved in writing by Metro, Carolco shall not by any means make any public comment
in any forum or circulate, publish, or otherwise disseminate any press releases, news stories, articles or other publicity containing
reference to Metro, the sale, the subject matter of this Agreement or Metro’s acquisition of the Company, except to the
extent required on Form 8K pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934, nor shall Carolco willingly
permit any infringement upon the exclusive publicity rights enjoyed by Metro.

 

7.12
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina.

 

7.13
Agreement to Arbitrate. In the event of a dispute:

 

a.
Carolco and Metro irrevocably and unconditionally waive their respective rights to pursue resolution via any form of law suit,
or by the filing of any other action or proceeding in any court, and instead agree to seek resolution for any disputes via arbitration
in the State of South Carolina. Thus, any controversy, issue or claim arising out of or related to this Agreement and to any part
of it, including, but not limited to this paragraph on arbitration, and to the performance, breach, interpretation or enforceability
hereof, and all claims for rescission of this Agreement or any part of this Agreement, shall be settled by arbitration.

 

b.
Such arbitration shall be held in the city of Charleston, South Carolina unless otherwise agreed by the parties in writing, and
shall be heard and settled according to the rules of the American Arbitration Association.

 

c.
In the event of a dispute, Metro and Carolco will each contribute the names of three state-certified arbitrators. The six names
will be compiled into a master list, and each party may strike up to two names from the list. The remaining names will be put
into a hat, and following a coin toss, either Carolco and Metro will randomly draw one name, which shall determine which arbitrator
will be used.

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	15
	 	 	 

 

d.
The arbitrator may make any order, decision, determination or award which he deems just and equitable and within the scope of
the agreement of the parties, including, but not limited to, requiring any party to perform any of its obligations or undertakings.
The arbitrator may also make any interim order, decision, determinations, or award he deems necessary to preserve the status quo
until he can render a final order, decision, determination or award.

 

e.
Any final or interim order, decision, determination or award made by the arbitrator shall be conclusive and binding upon the parties
and judgment upon any such order, decision, determination or award may be enforced and entered in any court having jurisdiction
thereof.

 

f.
Irrespective of the outcome of the arbitration, the parties agree to equally share the cost of the arbitrator and any specific
court costs, but each party shall remain responsible for its own expenses, including but not limited to attorney’s fees,
travel and other expenses.

 

7.14
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other
means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this
Agreement.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized:

 

	For
    CAROLCO PICTURES, INC:	 
	 	 
	/s/
    Alexander Bafer	 
	Alexander
    Bafer	 
	Chairman
    Of The Board/CEO	 
	Carolco
    Pictures, Inc.	 

 

For
METROPOLITAN SOUND + VISION LLC:

 

	/s/
    Bud Schaetzle	 
	Bud
    Schaetzle	 
	President/CEO	 
	Metropolitan
    Sound + Vision LLC	 

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	16
	 	 	 

 

EXHIBIT
A

WAIVER
AND RELEASE

 

THIS
WAIVER AND RELEASE, dated June 15, 2017, is hereby attached to and made part of the Purchase and Sale Agreement (hereinafter sometimes
referred to as the “Agreement”) between Carolco Pictures, Inc., a Florida corporation (“Carolco”), and
Metropolitan Sound + Vision LLC, a South Carolina corporation (“Metro”), dated June 15, 2017.

 

WHEREAS,
Carolco and Metro have executed the Purchase and Sale Agreement regarding the Purchase and Sale of S & G Holdings, Inc. d/b/a
High Five Entertainment (“the Company” and “High Five”), a Tennessee corporation,

 

WHEREAS,
Carolco and Metro have agreed to insulate and protect Metro from any extant or future liabilities and from involvement in any
legal issues which may exist or arise between and among S & G Holdings d/b/a High Five Entertainment (“the Company”),
Brick Top Productions (“Brick Top”) and Carolco Pictures, Inc. (“Carolco”), and/or any other interested
parties and/or individuals,

 

NOW,
THEREFORE, Carolco hereby issues a binding, unconditional and irrevocable blanket Waiver and Release (a) to Metro and to Metro’s
former and current officers, stockholders, partners, employees, designees, contractors, vendors, creditors and other associates
or collaborators, and (b) upon the execution by Martin Fischer and Carolco of Exhibit B (attached), to the Company and to the
Company’s former and current officers, stockholders, partners, employees, designees, contractors, vendors, creditors and
other associates or collaborators, such Waiver and Release shall remain in force in perpetuity and shall cover but not be limited
to:

 

1.
Any claims of any kind whatsoever by the Company, Brick Top and Carolco and their successors or assigns, other than specific contractual
claims between the signatory parties to the Purchase and Sale Agreement, which must be resolved per the terms specified in 7.13
of the Agreement;

 

2.
Any claims of any kind whatsoever by any of the Company’s, Brick Top’s and Carolco’s former and current officers,
stockholders, partners, employees, designees, contractors, vendors, creditors and other associates or collaborators or their successors
or assigns, and

 

IN
WITNESS WHEREOF, Carolco hereto has caused this Waiver and Release to be executed as of the date first written above by its duly
authorized officer:

 

	For
    CAROLCO PICTURES, INC	 
	 	 
	/s/
    Alexander Bafer 	 
	Alexander
    Bafer	 
	Chairman
    Of The Board/CEO	 
	Carolco
    Pictures, Inc.	 

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	17
	 	 	 

 

EXHIBIT
B

SETTLEMENT
AND MUTUAL RELEASE

 

THIS
SETTLEMENT AND MUTUAL RELEASE, dated June 15, 2017, is between Martin Fischer (“Fischer”) and Carolco Pictures, Inc.
(“Carolco”), and is hereby attached to and made part of the Purchase and Sale Agreement (the “Agreement”)
between Carolco Pictures, Inc., a Florida corporation (“Carolco”), and Metropolitan Sound + Vision LLC, a South Carolina
corporation (“Metro”), dated June 15, 2017.

 

WHEREAS,
Carolco and Metro have executed the Agreement regarding the Purchase and Sale of S & G Holdings, Inc. d/b/a High Five Entertainment
(“the Company” and “High Five”), a Tennessee corporation,

 

WHEREAS,
Carolco and Metro hereby agree that the settlement of all outstanding issues which may exist, derive or arise between and among
the Company’s former president and current stockholder Martin Fischer and Carolco is in the best interests of Carolco, Metro,
the Company and Fischer,

 

WHEREAS,
Carolco and Fischer hereby agree to amicably settle all outstanding employment, financial and legal issues which may exist, derive
or arise from Fischer’s time as President of the Company,

 

WHEREAS,
Carolco, the Company and Fischer entered into an Employment Agreement on December 24, 2013 and Carolco terminated that Employment
Agreement on April 21, 2017, the parties hereby agree that all terms of the Employment Agreement were met and performed satisfactorily
by each of Carolco, the Company and Fischer, and that no party has any cause of action against any other party for any issue arising
from the Employment Agreement or any party’s performance thereunder at any time before, during or after the period of time
which the Employment Agreement was in force, and that the parties hereby individually and collectively hereby waive any rights
to any actions at law against any other party for any reason,

 

WHEREAS,
Fischer warrants and represents that the Company has no outstanding debts, liabilities, obligations, liens or other encumbrances
beyond those specified in the Agreement,

 

WHEREAS,
Fischer hereby releases Carolco and the Company from any obligation to pay him any purportedly unpaid salary, commissions and/or
benefits of any kind, whatsoever,

 

WHEREAS,
for good and valuable consideration Fischer will sign over the ownership of his common stock, representing a 10% stake in the
Company, to Carolco upon execution of this Exhibit,

 

WHEREAS,
Fischer agrees to (a) assist Metro in the accounting, inventorying, storage and shipping of the Company’s assets to Metro,
and (b) assist Carolco in its preparation and completion of any of the Company’s unfiled Tax Returns,

 

NOW,
THEREFORE, Carolco and Fischer hereby agree that all issues between them are now settled, with neither party obliged to the other
for anything other than that which is specified herein; and that Carolco hereby issues a binding, unconditional and irrevocable
blanket Waiver and Release (a) to Martin Fischer personally, (b) to the Company and to the Company’s former and current
officers, stockholders, partners, employees, designees, contractors, vendors, creditors and other associates or collaborators,
and (c) to Metro and to Metro’s former and current officers, stockholders, partners, employees, designees, contractors,
vendors, creditors and other associates or collaborators, such Waiver and Release shall remain in force in perpetuity and shall
cover but not be limited to:

 

FINAL

 

    	 	 	 

     

    

 

	 	PURCHASE AND SALE AGREEMENT

CAROLCO PICTURES, INC. –w–
METROPOLITAN SOUND + VISION LLC

	18
	 	 	 

 

1.
Any claims of any kind whatsoever by the Company, Brick Top and Carolco and their successors and assigns other than specific contractual
claims between the signatory parties to the Purchase and Sale Agreement, which must be resolved per the terms specified in 7.13
of the Agreement, provided, however that if any of Fischer’s attestations regarding
any outstanding debts, liabilities, obligations, liens or other encumbrances beyond those specified in the Agreement are shown
to be incomplete, false or incorrect and directly result in Metro seeking in writing to collect any sums of money from Brick Top,
Carolco and/or their successors and assigns based upon such attestations, Brick Top, Carolco and/or their successors and assigns
may seek a judgment from Fischer in the amount Metro seeks to collect from them.

 

2.
Any claims of any kind whatsoever by any of the Company’s, Brick Top’s and Carolco’s former and current officers,
stockholders, partners, employees, designees, contractors, vendors, creditors and other associates or collaborators or their successors
or assigns, and

 

IN
WITNESS WHEREOF, Carolco and Fischer hereto have caused this Waiver and Release to be executed as of the date first written above
by its duly authorized officer:

 

	For
    CAROLCO PICTURES, INC:	 
	 	 
	/s/
    Alexander Bafer	 
	Alexander
    Bafer	 
	Chairman
    Of The Board/CEO	 
	Carolco
    Pictures, Inc.	 

 

	For
    MARTIN FISCHER:	 
	 	 
	/s/
    Martin Fischer	 
	Martin
    Fischer	 

 

FINAL

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