Item
1.02. Termination of a Material Definitive Agreement
As
previously reported on June 26, 2008, Red Mile Entertainment, Inc. (the
“Company”) and Atari Interactive, Inc. (“Atari”) entered into a Publishing
Agreement on June 20, 2008 (the “Publishing Agreement”) pursuant to which
Red Mile granted Atari an exclusive worldwide license to publish, sell and
distribute the interactive game under the working title “Heroes over Europe”
(the “Title”) for Microsoft Windows®-based
personal computers and the Sony PlayStation 3® and
Microsoft Xbox 360®
consoles. A copy of the Publishing Agreement was attached as Exhibit 10.7
to the Company’s Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (“SEC”) on August 14, 2008. Portions of the
Publishing Agreement were omitted and filed separately with the SEC pursuant to
a request for confidential treatment.
Pursuant
to the Publishing Agreement, Atari made a cash payment to the Company upon
execution of the Publishing Agreement and agreed to pay the Company periodically
as the Company achieved certain development milestones. Atari also agreed to pay
royalties to the Company based on Atari’s net receipts from sales of the Title,
after recoupment of the periodic milestone payments. The Publishing Agreement
has a term of seven years after the initial release of the Title.
On
February 11, 2009, Atari sent the Company a termination notice with respect to
the Publishing Agreement, claiming that the Company breached the Publishing
Agreement. The Company disputes the grounds for
termination. Atari has ceased making milestone payments to the
Company, which has had a material and adverse effect on the Company’s ability to
continue operations.
As
previously reported on May 10, 2006, the Company and IR Gurus Interactive Pty
Ltd. (“IR Gurus”) entered into a Software Development and Licensing
Agreement on March 3, 2006 (the “Development Agreement”) for development of the
Title. Under the Development Agreement, the Company agreed to make
periodic payments to IR Gurus upon achievement of certain milestones in the
development of the Title. On February 11, 2009, IR Gurus sent the
Company a termination notice with respect to the Development Agreement for the
Title claiming that the Company failed to make a payment under such agreement in
the amount of $281,000.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
RED
MILE ENTERTAINMENT, INC.
Dated:
February 18,
2009
By: /s/ Chester
Aldridge
Chester Aldridge;
Chief Executive Officer
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