Carolco Pictures, Inc. (OTCMKTS:CRCO) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

Purchase and Sale Agreement

On June 15, 2017, Carolco Pictures, Inc. (the Company) entered
into a Purchase and Sale Agreement (the Agreement) with
Metropolitan Sound Vision LLC, a South Carolina limited liability
company (Metro). to the Agreement, the Company agreed to sell to
Metro all of the shares of common stock of SG Holdings, Inc., a
Tennessee corporation doing business as High Five Entertainment
(SG) owned by the Company, which constitute 75% of the issued and
outstanding shares of SG, for a total purchase price of $600,000
(the Transaction). The Company had acquired the shares of SG from
Martin Fischer in 2013, and Mr. Fisher subsequently served as the
President of SG, and is a stockholder of the Company.

SGs minority shareholders have agreed to the sale and the
delivery of their shares to Metro.

to the Agreement, at the closing of the Transaction, the Company
was to deliver to Metro 100% of the issued and outstanding shares
of common stock of SG owned by the Company, and Metro was
required to pay for such stock as follows: An initial payment of
$10,000 was required to be made at the closing, and thereafter,
at the end of each fiscal quarter, beginning at the end the third
fiscal quarter of 2017, Metro shall pay the Company 5% of gross
revenues collected during the quarter by Metro via the
exploitation of SGs assets, up to a lifetime maximum of $590,000.

Metro is also required to provide documentation and accounting of
all exploitation of such assets to the Company along with its
quarterly payments. Metro is not required to make any payments in
any quarter in which no revenues are collected from the
exploitation of SGs assets.

to the Agreement, the Company agreed that the Company would (i)
repay or settle the sum of $33,334 which was due from SG to SGs
former landlord, Colliers International by July 31, 2017; and
(ii) repay or settle the sum of $6,591 which was due from SG to
the State of Tennessee by July 1, 2017. In addition, the Company
also forgave $5,000 which remained owed by SG to the Company to a
promissory note, originally in the amount of $25,000, of which SG
had previously repaid $20,000. The Agreement provided that SG
would retain the obligation for a $75,000 line of credit with
SunTrust Bank. In addition, the sum of $39,656, which was due and
payable to Martin Fischer by SG has been fully and irrevocably
settled and resolved by the Settlement and Mutual Release
described below. In addition, Metro was entitled to deduct from
the purchase price all taxes that the Company or SG owe to any
federal or state entity as they relate to the assets of SG.

In the Agreement, the Company provided Metro with standard
representations and warranties related to the organization of the
Company and SG, the capitalization of SG, SGs liabilities and
financial statements, the absence of certain changes to the
operations of SG, accounts receivable of SG, SGs title to its
assets and properties, legal proceedings, insurance, compliance
with laws, employment matters, and taxes and tax returns of SG.

The Company also agreed to indemnify and defend each of Metro and
its affiliates (including SG) and their respective
representatives against, and to hold each of them harmless from
and against, and to pay and reimburse each of them for, any and
all losses incurred or sustained by, or imposed upon, such
persons or entities 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 the Company in the Agreement or
in any certificate or instrument delivered by or on behalf of the
Company to the Agreement; or any breach or non-fulfillment of any
covenant, agreement or obligation to be performed by the Company
to the Agreement. Metro similarly agreed to indemnify Carolco and
its affiliates for breaches of Metros representations, warranties
or covenants.

The Agreement requires Metro to use its best professional efforts
to generate revenue from the exploitation of SGs assets, and if
the Company has not received a total of at least $265,000 of the
$590,000 lifetime maximum purchase price from Metro before July
1, 2022, the Company has the right to repurchase the stock and
assets of the SG from Metro for $10,000.

The Company did not utilize a broker in connection with the
Agreement or the Transaction.

Waiver and Release

In addition, in connection with the Agreement and the
Transaction, on June 15, 2017, the Company and Metro entered into
a Waiver and Release (the Waiver and Release), to which the
Company waived and released Metro and Metros former and current
officers, stockholders, partners, employees, designees,
contractors, vendors, creditors and other associates or
collaborators, and upon execution by Mr. Fisher of the Settlement
and Release (as described below), Metro and Metros former and
current officers, stockholders, partners, employees, designees,
contractors, vendors, creditors and other associates or
collaborators, from any claims of any kind by SG or the Company
and their successors and assigns, other than specific contractual
claims between the signatory parties to the Agreement, and any
claims of any kind by any of SGs and the Companys former and
current officers, stockholders, partners, employees, designees,
contractors, vendors, creditors and other associates or
collaborators or their successors or assigns.

Settlement and Mutual Release

In addition, in connection with the Agreement and the
Transaction, on June 15, 2017, the Company and Mr. Fischer
entered into a Settlement and Mutual Release (the Settlement and
Release), to which each of the parties agreed that all issues
between them were settled and the Company waived and released Mr.
Fischer, SG, and SGs former and current officers, stockholders,
partners, employees, designees, contractors, vendors, creditors
and other associates or collaborators, and Metro and Metros
former and current officers, stockholders, partners, employees,
designees, contractors, vendors, creditors and other associates
or collaborators, from any claims of any kind by SG or the
Company and their successors and assigns, other than specific
contractual claims between the signatory parties to the
Agreement, provided, however that if any of Mr. Fischers
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 the Company and/or its successors and assigns
based upon such attestations, the Company and/or its successors
and assigns may seek a judgment from Mr. Fischer in the amount
Metro seeks to collect from them.

Item 2.01 Completion of Acquisition or Disposition of
Assets.

The Transaction as described in Item 1.01 closed on June 20,
2017. On that date, the Company sold all of the shares of SG
owned by the Company to Metro, for a purchase price of $10,000
and the right to receive the additional contingent consideration
as described in Item 1.01, to the terms and conditions of the
Agreement as described in Item 1.01.

The disclosure set forth in Item 1.01 is incorporated herein by
reference.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The financial information that is required to this Item will be
filed by amendment not later than 71 calendar days after the date
that this initial report on Form 8-K is required to be filed.

(d) Exhibits

CAROLCO PICTURES, INC. Exhibit
EX-10.1 2 ex10-1.htm     PURCHASE AND SALE AGREEMENT CAROLCO PICTURES,…
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About Carolco Pictures, Inc. (OTCMKTS:CRCO)

Carolco Pictures, Inc. is a feature film and television specials production company. The Company is engaged in the sale of programming for television and other media. The Company seeks to finance, produce and distribute one or more television series and feature films to be licensed for exploitation in domestic and international theatrical, television, cable, home video and pay per view markets. The Company, through its subsidiary, High Five Entertainment, specializes in the development and presentation of television programming, including series, specials, pilots, live events and award shows.