Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 22, 2018

HOLLY BROTHERS PICTURES, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada

000-55018

46-2111820

(State or Other Jurisdiction of

Incorporation or Organization)

(Commission File No.)

(I.R.S. Employer Identification No.)

462 Stevens Ave, #310

Solana Beach, CA 92075

(Address of principal executive offices and zip code)

(440) 543-4645

(Registrant’s telephone number, including area code)

221 E. Washington Street

Chagrin Falls, OH 44023

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

SECTION 1 - REGISTRANT’S BUSINESS AND OPERATIONS

Item 1.01

Entry into a Material Definitive Agreement

The Issuer agreed to enter into a conditional settlement with Plaintiffs Pioneer Group, LLC and Black Car, Inc. in a civil matter pending before the Superior Court for the State of California County of San Diego. The settlement agreement calls for the periodic issuance to Plaintiffs, subject to certain ownership and temporal limitations, of an aggregate of up to 3,078,000 and 3,157,000 shares respectively, exempted from registration pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, and the California Corporations Code Section 25017(f)(3), as amended, after a fairness hearing evaluating the relative merits of the proposed agreement.

SECTION 8 - OTHER MATERIAL EVENTS

Item 8.01

Other Events

Pursuant to the above described conditional settlement the Company through its legal counsel will appear at an ex parte hearing to issue an order approving settlement on Monday April 2, 2018 at 8:15 a.m. in department 71 of the Superior Court for the State of California, County of San Diego, Central Division located at 330 West Broadway San Diego, California 92101. To the extent any of the Issuer’s shareholders have objections to the conditional settlement or questions regarding the same they are encouraged to reach out to the Issuer at (858) 987-4910.

SECTION 9 - EXHIBITS AND FINANCIAL STATEMENTS

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.	Description
10.1	Settlement and Mutual Release Agreement, dated March 22, 2018
10.2	Stipulation and Proposed Order Thereon, dated March 22, 2018

2

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	HOLLY BROTHERS PICTURES, INC.

DATE: March 29, 2018	By:	/s/ Brent Willson
	Name:	Brent Willson
	Title:	President and Chief Executive Officer

3

EXHIBIT INDEX


Exhibit No.	Description
10.1	Settlement and Mutual Release Agreement, dated March 22, 2018
10.2	Stipulation and Proposed Order Thereon, dated March 22, 2018

4

SETTLEMENT AND MUTUAL RELEASE AGREEMENT

This Settlement and Mutual Release Agreement (the “Agreement”) is made effective as of March 21, 2018, by and between Pioneer Group, LLC (“Pioneer”), Black Car, Inc. (“Black Car,” and with Pioneer, “Plaintiffs”) on the one hand, and Holly Brothers Pictures, Inc. (“Holly”) on the other hand.

WHEREAS, Holly is indebted to Plaintiffs under certain promissory notes (the “Notes”), copies of which are attached as Exhibit C to the complaint filed in the Lawsuit (as defined below);

WHEREAS, the Notes have matured, but they remain unpaid, due and owing to Plaintiffs;

WHEREAS, pursuant to the Notes, Holly is indebted to Pioneer in the amount of $369,459.64 (the “Pioneer Debt”) and to Black Car in the amount of $373,710.32 (the “Black Car Debt”).

WHEREAS, on March 2, 2018, Plaintiffs filed suit (the “Lawsuit”) against Holly in the Superior Court for the State of California County, San Diego Central Division, to collect on the Notes, which case was docketed as case number 37-2017-00010522-CU-BC-CTL; and

WHEREAS, the Pioneer, Black Car, and Holly (collectively the “Parties”) wish to settle and resolve all claims relating to the Notes, to wit; the Pioneer Debt, the Black Car Debt, and the Lawsuit on the terms and conditions set forth herein.

WHEREAS, Pursuant to the Stipulation for Settlement and Order Thereon (the “Stipulation”) included herewith at Exhibit A hereto, the Parties shall apply for an Order of the Court to be issued upon a noticed settlement hearing.

NOW, THEREFORE, in consideration of the promises, mutual agreements, covenants and provisions contained in this Agreement, the receipt, sufficiency, and adequacy of which are expressly acknowledged, the Parties agree as follows:

1.

Payment to Plaintiffs: In settlement of the indebtedness represented by the Notes, Holly shall, from time to time and subject to the ownership and temporal limitations set forth below, issue and deliver an aggregate of 3,078,000 shares of Holly common stock to Pioneer and 3,157,000 shares of Holly common stock to Black Car (the “Settlement Shares”) pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, Corporations Code Section 25017(f)(3) and the regulations promulgated thereunder.

The issuance of the Settlement Shares shall occur in respective tranches such that the Settlement Shares beneficially owned by each Plaintiff (or deemed to be beneficially owned by each Plaintiff) shall not exceed 4.99% of the Holly common stock outstanding on an issuance date, as determined in accordance with Section 16 of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.

Settlement and Mutual Release Agreement - Page 1

For clarity, Holly shall have no obligation to issue, and shall not issue, Settlement Shares in an amount that would result in either Plaintiff owning more than 4.99% of Holly’s then-outstanding common stock. Holly shall provide thirty days’ notice of any cancellation of shares not owned by Plaintiffs if such cancellation would result in either Plaintiff owning more than 4.99% of Holly common stock outstanding immediately following such cancellation.

Either Plaintiff may make requests for periodic tranch issuances. Plaintiffs shall have no right to request, and shall not request, a tranch issuance that would result in either of them owning more than 4.99% of Holly’s then-outstanding common stock. Such requests shall be in writing and shall be accompanied by a representation from the requesting Plaintiff stating the exact number of shares then owned by the requesting Plaintiff. The Requesting Plaintiff shall provide any additional information reasonably requested by Holly to enable Holly to verify that the requested issuance will not result in a beneficial ownership of more than 4.99% of Holly’s then-outstanding common stock.

Plaintiffs’ right to make requests for periodic tranch issuances shall expire on September 17, 2019. Thereafter, Holly shall have no obligation to issue shares to either Plaintiff pursuant to this Agreement. Plaintiffs acknowledge that they may be unable to sell, prior to the expiration of their right to make requests for periodic tranch issuances, a sufficient number of shares to recoup the Pioneer Debt and the Black Car Debt. They expressly assume that risk.

2.

Resolution of the Lawsuit: Upon full execution of this Agreement, Plaintiffs shall file a Request for Dismissal with Prejudice of the Lawsuit, or request the Court take such action sua sponte.

3.

Mutual Releases:

a.

Plaintiffs release, acquit, and discharge Holly and its related entities, subsidiaries, parents, affiliates, successors, predecessors, officers, shareholders, directors, members, managers, owners, agents, servants, representatives, attorneys, and insurers of and from any fee, debt, obligation, claim, action, demand and/or cause of action, including any claim for attorneys’ fees, interest, or costs of litigation, whether asserted or unasserted, whether equitable or at law, whether arising under or pursuant to common or statutory laws, state and/or federal law, rules or regulations, that arises out of the Notes, the Pioneer Debt, the Black Car Debt, or the Lawsuit.

b.

Holly releases, acquits, and discharges Plaintiffs and their respective related entities, subsidiaries, parents, affiliates, successors, predecessors, officers, shareholders, directors, members, managers, owners, agents, servants, representatives, attorneys, and insurers of and from any fee, debt, obligation, claim, action, demand and/or cause of action, including any claim for attorneys’ fees, interest, or costs of litigation, whether asserted or unasserted, whether equitable or at law, whether arising under or pursuant to common or statutory laws, state and/or federal law, rules or regulations, that arises out of the Notes, the Pioneer Debt, the Black Car Debt, or the Lawsuit.

Settlement and Release Agreement - Page 2

c.

The foregoing releases extend to all claims whether or not suspected and constitute a waiver of each and all of the provisions of California Civil Code, Section 1542 which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

d.

The Parties acknowledge that they are parties to an exchange agreement dated February 1, 2018 and certain convertible notes executed contemporaneously with the exchange agreement, as described more fully in a Form 8-K Holly filed with the SEC on February 2, 2018. The releases provided for in this Agreement do not extend to the exchange agreement or the convertible notes executed contemporaneously with it, all of which remain in full force and effect.

4.

Miscellaneous:

a.

This Agreement shall be binding upon and inure to the benefit of the Parties, their successors, and assigns.

b.

The Parties acknowledge that the terms and covenants contained in this Agreement provide good and sufficient consideration for every promise, duty, release, obligation, and right contained in this Agreement.

c.

By execution hereof, the Parties each represent, covenant, and warrant that each is authorized to release the claims released in this Agreement, and that no claim released herein has previously been conveyed, assigned, or in any manner transferred, in whole or in part, to any third party.

d.

It is understood and agreed that no party to this Agreement admits any liability to any other party, but to the contrary, expressly denies the same. This Agreement is entered to resolve, settle, and compromise the matters in dispute between the Parties and avoid the cost, expense, and effort of protracted and disputed litigation.

e.

The Parties fully understand that if any fact concerning the claims giving rise to this Agreement should be found other than or different from the facts now believed to be true, the Parties expressly accept and assume the risk of such possible difference in facts and agree that this agreement shall be and will remain in effect notwithstanding any such difference in facts.

f.

Each party warrants and represents to the other that no promise, representation, conduct, or consideration by any other party or its owners, agents, servants, employees, attorneys, or persons in privity with them has induced the execution of this Agreement except for those representations and agreements specifically set forth herein.

Settlement and Release Agreement - Page 3

g.

This Agreement was drafted jointly by all Parties in consultation with their attorneys. Accordingly, no rule of construction based upon one party or the other drafting this Agreement shall apply.

h.

This Agreement, including any exhibit, embodies the entire agreement between and among the Parties, supersedes all prior agreements and understandings, if any, relating to the subject matter hereof, and may be amended only by an instrument in writing executed jointly by the Parties.

i.

This Agreement shall be governed by, construed, interpreted, applied, and enforced in accordance with the laws of the State of California, County of San Diego. Any litigation relating to this Agreement shall be brought in San Diego County California in same court as the Lawsuit was initially filed.

j.

The Parties stipulate the Superior Court for State of California, County of San Diego, and the Hon. Gregory W. Pollack shall retain limited jurisdiction over the interpretation of the terms of this Agreement pursuant to Section 664.6 of the Code of Civil Procedure. Each of the Parties in signing hereunder irrevocably submits to the jurisdiction of the Superior Court for State of California, County of San Diego.

k.

This Agreement may be, but is not required to be, executed in multiple originals. A facsimile copy and/or a scanned image of a signature page hereto shall be valid the same as the original. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original.

l.

The Parties agree to cooperate in taking all steps necessary to give full force and effect to this Agreement, and to execute any and all additional documents necessary to accomplish the same.

m.

The Parties agree and understand that the terms hereof are contractual and are not merely recitals and that the Parties intend to be and are hereby bound by the terms of this Agreement. Each undersigned individual, by his or her signature below, warrants that he or she is of legal age, legally competent to execute this Agreement and fully authorized by the party on whose behalf he or she signs this Agreement to execute and enter into this Agreement on behalf of such party.

n.

If any term, condition, or covenant contained in this Agreement is for any reason found null, void, or otherwise unenforceable, that portion of the Agreement shall be treated as severed and the remainder of the Agreement will remain in full force and effect as if the severed portion were never contained herein. However, this paragraph does not apply to any material term, condition or covenant that forms all or part of the consideration supporting this Agreement.

Settlement and Release Agreement - Page 4

o.

The Parties hereto have entered into this Agreement voluntarily and with consent of counsel for valuable consideration, and not by reasons of any fraud, duress, undue influence or mistakes. The Parties represent and warrant that (a) they are competent to enter into this Agreement, (b) they are not in a significantly disparate bargaining position, and (c) they are knowledgeable and fully able to evaluate the merits and risks of this transaction.

p.

In the event of subsequent litigation between the Parties to interpret or enforce any provision of this Agreement, the prevailing party shall be entitled to recover all attorneys’ fees and expenses from the non-prevailing party.

[Signature Page Follows]

Settlement and Release Agreement - Page 5

IN WITNESS WHEREOF, this Parties have read and understood the foregoing terms and in signing below acknowledge their agreement and acceptance to such terms as of the date of this Agreement.

/s/ Michael Caloway

_________________________________

For: Pioneer Group, LLC

By: Michael Caloway, Manager

/s/ Keith Williams

_________________________________

For: Black Car, Inc.

By: Keith Williams, President

/s/ Brent Willson

_________________________________

For: Holly Brothers Pictures, Inc.

By: Brent Willson, CEO

Settlement and Release Agreement - Page 6

John E. Dolkart, Jr., SBN 259707

LAW OFFICES OF JOHN E. DOLKART, JR.

1750 Kettner Blvd., Suite 416

San Diego, California 92101

Tel: (619) 501-1083

Fax: (619) 684-3512

john@dolkartlaw.com

Attorney for:

Plaintiffs

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN DIEGO – CENTRAL DIVISION

PIONEER GROUP, LLC, a limited liability company; BLACK CAR, INC., a corporation;

Plaintiffs,

vs.

HOLLY BROTHERS PICTURES, INC., a corporation; and DOES 1 through 10, inclusive;

Defendant.

Case No.: 30-2017-00010522-CU-BC-CTL

Assigned for All Purposes

Hon. Gregory W. Pollack

Dept. C-71

STIPULATION APPROVING SETTLEMENT AND ORDER THEREON

Complaint Filed:

March 2, 2018

STIPULATION

IT IS HEREBY STIPULATED AND AGREED by and between, Plaintiffs Pioneer Group, LLC and Black Car, Inc. (collectively “Plaintiffs” or individually as “Plaintiff”) and Defendant Holly Brothers Pictures, Inc., (the “Defendant”), collectively referred to as, “the Parties” or a “Party” where context may require and each of them having settled the above entitled matter by written agreement by entry into this Stipulation for Entry of Judgment and Order Thereon (“the Stipulation”) that all claims presented in Plaintiff’s Complaint have been and are now fully settled and resolved to the mutual satisfaction of all Parties pursuant to the terms of that certain written Settlement and Mutual Release Agreement (the “Settlement Agreement”) by and between the Parties, dated March 21, 2018, a true and correct copy of which is on-file with the court at to which this Stipulation is included as an Exhibit thereto.

STIPULATION FOR THE ENTRY OF JUDGMENT AND ORDER THEREON

1

IT IS FURTHER STIPULATED AND AGREED by and between the Parties to dismiss the Entire Action, with prejudice, by the delivery of the executed Request for Dismissal to be filed upon the completion of the items of performance for the Defendant as further provided by the Settlement Agreement.

IT IS SO STIPULATED.

Dated: March 22, 2018

PIONEER GROUP, LLC

(“Plaintiff”)

By: /s/ Michael Caloway

Michael Caloway, Manager

Dated: March 22, 2018

BLACK CAR, INC.

(“Plaintiff”)

By: /s/ Keith Williams

Keith Williams, Manager

Dated: March 22, 2018

HOLLY BROTHERS PICTURES, INC.

(“Defendant”)

By: /s/ Brent Willson

Brent Willson, Chief Executive Officer

STIPULATION FOR THE ENTRY OF JUDGMENT AND ORDER THEREON

2

ORDER

The Court have read and considered the Stipulation and there being no opposition to the Settlement Agreement proposed thereunder and on proof made to the satisfaction of the Court and good cause appearing therefore:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the settlement and compromise of the above-entitled action pursuant to the terms of the Settlement Agreement, including the issuance of shares of common stock to the Plaintiffs by Defendant pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, and Corporations Code Section 25017(f)(3) and the stipulation for limited reservation of jurisdiction by the Court as contained therein are approved;

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the above-entitled Court has opined that the settlement agreement is fundamentally to all parties and the Court shall retain jurisdiction over the parties hereto to enforce the terms of the Settlement Agreement to the extent required therein.

Dated: April ___, 2018

________________________________________

Hon. Gregory W. Pollack

Judge of the Superior Court