f10k2009ex10x_redmile.htm


     

    Exhibit
10.10

    
      


      BUYOUT
AGREEMENT

       

            
This Buyout Agreement (the "Agreement") is dated February
24.2009 (the "Effective
Date') and is
between Atari Interactive, Inc.("Atari") and Red Mile Entertainment, Inc. ("Red Mile").

       

      Recitals

       

      
        	
                A.  

              	
                Atari
      and Red Mile are party to a Publishing Agreement dated June 20, 2008 (the
      "Publishing
      Agreement") under which Red Mile licensed to Atari certain rights in and
      to the interactive software game with the working title "Heroes over
      Europe* (the "Title").

              


      

       

      
        	
                B.  

              	
                On
      February 12, 2009. Atari delivered to Red Mile a notice stating that Atari
      had terminated
      the Publishing Agreement and had exercised its rights to retain the rights
      licensed to Atari
thereunder.

              


      

       

      
        	
                C.

              	
                Atari
      is willing to release to Red Mile the rights to the Title licensed to
      Atari under the Publishing
      Agreement in exchange for certain payments from Red Mile pursuant to the
      terms of this Agreement, in accordance with the terms and conditions
      hereinbelow. Red Mile anticipates funding the payments called for by this
      Agreement with the proceeds from a new financing and/or production
      agreement to be entered into between Red Mile and a third party (the "Third Party") regarding
      completion and distribution of the Title for the Sony Playstation 3,
      Microsoft Xbox 360, and personal computer
  platforms.

              


      

       

      Agreement

       

         
The parties agree as follows:

       

      
        	
                 
      

              	
                1.

              	
                Buyout Fee. In
      exchange for the release of Atari's rights in the Title, Red Mile shall
      pay Atari
      (collectively, the "Buyout
      Fee"):

              


      

       

      
        	
                 
      

              	
                1.1.

              	
                A
      fee in the amount of $4,750,000 (the "Initial Payment") on
      March 5, 2009 or as
      soon as reasonably practicable thereafter if Red Mile provides evidence by
      March 5, 2009 reasonably satisfactory to Atari of an agreement in
      principle for financing of the Title by a Third Party (including, at
      minimum, proof of funds and definitive proof of intent (e.g., executed
      L01); but in any event not later than March 19, 2009;
      and

              


      

       

      
        	
                 
      

              	
                1.2.

              	
                33%
      of any and all royalties or other payments received by Red Mile or its
      affiliates,
      without deductions of any kind, from the Third Party in connection with
      the licensing of the Title net of the Initial Payment ("Net Royalties") until
      Atari has received aggregate fees and royalties under this Agreement
      (inclusive of the Initial Payment) of $5,500,000, to be paid to Atari
      within five (5) business days following receipt by Red Mile or its
      affiliates of the corresponding Net Royalty amount(s)(the "Atari First-Tier Royalties");
      and

              


      

       

      
        	
                 
      

              	
                1.3.

              	
                thereafter,
      15% of any and all Adjusted Net Royalties (as defined below) received
      by Red Mile or its affiliates, to be paid to Atari within five (5)
      business days following receipt by Red Mile or its affiliates of the
      corresponding Adjusted Net Royalties (or portion thereof), provided that
      in no event shall any amount payable to Atari in accordance with this
      subsection 1.3 be a negative amount (the "Atari Second-Tier
      Royalties"). As used herein, the "Adjusted Net Royalties"
      means Net Royalties minus all
      verifiable out-of-pocket direct costs actually paid by Red Mile in order
      to complete the development of the Title with respect to the period from
      inception of the Tile through completion of the Title. This includes all
      amounts paid to IR Gurus Pty. Ltd. at any time in respect of the
      Title.

              


      

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

       

      
        	
                 
      

              	
                1.4.

              	
                Quarterly Accounting.
      Reporting with respect to the Buyout Fee shall be on a  calendar
      quarterly basis. Within sixty (60) days after the close of each calendar
      quarter, beginning with the first calendar quarter in which any royalties
      or other payments (other than the;Initial Payment) are due hereunder, Red
      Mile shall provide Atari with a written statement showing the Net
      Royalties and Adjusted Net Royalties for such calendar quarter, a
      calculation of the royalties and other amounts payable to Atari in respect
      of such period (including without limitation the Atari First-Tier
      Royalties and the Atari Second-Tier Royalties). Each such statement shall
      be accompanied by paymentof the amount of the Buyout Fee then due. Atari
      shall be deemed to have consented to all accountings rendered by Red Mile
      and each such statement of accounting shall be conclusive, final and
      binding, unless specific objection in writing, stating the basis thereof,
      is given by Atari to Red Mile within one (1) year after the date it was
      rendered. No claim concerning a statement or other account rendered by Red
      Mile may be made unless asserted within one (1) year after the date of Red
      Mile's notice rejecting such objection or, if Red Mile fails to give such
      notice of rejection, within one (1) year after the sixtieth (60th) day
      following Atari's written
objection,

              


      

       

      
        	
                 
      

              	
                1.5

              	
                Examination Rights.
      Atari shall have the right, to be exercised not more than 
      once
      per calendar year and upon not less than ten (10) business days prior
      written notice to Red Mile, through an independent public accounting firm
      reasonably acceptable to Red Mile, to examine the books, records and
      accounts of Red Mile relating to the Buyout Fee, for the purposes of
      verifying Red Mile's compliance with the terms and conditions of this
      Agreement. All information made available to Atari's representative in any
      such examination shall be and be treated as Confidential 'Information, and
      prior to any such examination, Atari's representative shall enter into an
      appropriate confidentiality agreement with Red Mile. Each such examination
      shall not weed three (3) days in duration and shall be conducted during
      regular business hours, in such manner as not to interfere unduly with the
      business of Red Mile. Atari's representative shall report to Atari solely
      whether Atari has been overpaid, underpaid or properly paid for the period
      subject to examination. The expenses of examination pursuant to this
      Section 1.5 shall be borne by Atari; provided, however, that Red Mile
      shall be charged for the expense of any such examination that establishes
      an underpayment to Atari in excess of ten percent (10%) of the amount due
      for the period subject to examination. In the event that such examination
      reveals any overpayment by Red Mile, Atari shall reAund such overpayment
      within thirty (30) days following Atari's receipt of such examination
      results.

              


      

      
        	
                 
      

              	
                 

              


      

      
        	
                 
      

              	
                1.6.

              	
                Payment of Discovered
      Ilederpayment, With respect to any claim by Atari that additional
      monies are payable by Red Mile to Atari pursuant to this Agreement based
      upon such an examination, Red Mile shall not be deemed in breach of this
      Agreement if within thirty (30) calendar days after Red Mile's receipt of
      any written claim that additional monies are due and payable, together
      with a copy of the audit report prepared in connection with such audit,
      Red Mile shall either: (i) pay such additional monies so claimed by Atari;
      or (ii) contest such claim, in whole or in part, by written notice sent to
      Atari.

              


      

      
        
        

      

      
      

      


       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      2.            
Release of Rights in the
Title.

       

      
        	
                 
      

              	
                2.1.

              	
                On
      receipt by Atari of the initial Payment, all of the rights licensed by Red
      Mile to Atari
      pursuant to the Publishing Agreement (the "Licensed Rights"), including
      all intellectual Property Rights and other rights in or to the
      Deliverables, Title, Exclusive Derivative Products, Future Products and/or
      Sequels (as such terms are defined in the Publishing Agreement) shall
      immediately revert to Red
Mile.

              


      

       

      
        
          	
                   
      

                	
                  2.2.

                	
                  As
      soon as is practicable after the Effective Date, Atari shall deliver at
      Red Mile's cost
      all code, art, documentation, music, sound effects and other assets
      relating to the Title within Atari's possession or
      control.

                
	 	 	 
	 	2.3.	Atari
      makes no representations or warranties with respect to the Licensed Rights,
      which shall revert to Red Mile on an as-is, where-is
    basis.


        

      

       

      3.            
Publishing
Agreement

       

      
        
          	
                   
      

                	
                  3.1.

                	
                  As
      of the Effective Date, the Publishing Agreement will be terminated and of
      no further force and effect. Neither party to this Agreement will have any
      further obligation or liability to the other party under the Publishing
      Agreement other than subject to Sections 9, 10, and 11 , which shall
      survive such termination.

                


        

         

        4.            
Mutual Release of
Claims.

      

       

      
        	
                 
      

              	
                4.1.

              	
                Except
      for obligations arising under this Agreement and/or the Mutual Nondisclosure
      Agreement between Red Mile and Atari dated on or about February 13, 2009
      (the "Confidentiality
      Agreement") and except as expressly provided otherwise in Section
      3.1 above, the parties to this Agreement, on their own behalf, and on
      behalf of their respective officers, directors, employees, investors,
      shareholders, divisions, successors and assigns, hereby fully and forever
      release each other and their respective officers, directors, employees,
      investors, shareholders, affiliates, divisions, successors and assigns,
      from, and agree not to sue each other concerning, any claim, duty,
      obligation or cause of action relating to any matters of any kind, that
      either party may possess arising from any omissions, acts or facts that
      have occurred on or before the Effective Date and relating to, or arising
      from, or otherwise in connection with the Publishing Agreement or the
      licensing of rights in the Title by Red Mile to Atari, and all claims for
      attorneys' fees and costs;

              


      

       

      
        	
                 
      

              	
                4.2.

              	
                Each
      party to this Agreement is familiar with and expressly waives all rights
      under
      California Civil Code Section 1542 (and every statute of similar effect),
      which provides 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."

              


      

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

       

      
        	
                 
      

              	
                4.3.

              	
                The
      foregoing release and waiver are not being provided based upon any representations
      not expressly contained in this Agreement. The parties understand the risk
      that the facts known to them or believed to be true, may be otherwise, and
      each of the parties voluntarily assumes such
  risk.

              


      

       

      5.            
Miscellaneous.

       

      
        	
                 
      

              	
                5.1.

              	
                Authority. Each
      party represents and warrants that it has the right and authority to
      enter into this Agreement, and that there exist no obligations which
      prevent such party from granting, accepting, or performing all of the
      undertakings provided for in this
  Agreement.

              


      

       

      
        	
                 
      

              	
                5.2.

              	
                Governing Law.
      This Agreement shall be governed by and construed in accordance
      with the laws ofthe State of New York, excluding its conflict of laws
      rules.

              


      

       

      
        	
                 
      

              	
                5.3.

              	
                Entire Agreement.
      This Agreement and the Confidentiality Agreement are the entire
      agreement between the parties with respect to the subject matter hereof
      and supersede all prior and contemporaneous agreements. This Agreement
      shall not be modified except by a writing signed by an authorized
      representative of each
party.

              


      

       

      
        	
                 
      

              	
                5.4.

              	
                Attorneys' Fees.
      in any proceeding to enforce this Agreement, the prevailing party
      shalt recover, in addition to all other relief, reasonable attorneys' fees
      and costs.

              


      

       

      
        
          	
                   
      

                	
                  5.5.

                	
                  Counterparts.
      The parties may execute this Agreement in two or more counterparts,
      each of which shall be deemed an original.

                
	 	 	 
	 	5.6.	All
      dollar amounts provided herein are denominated in U.S.
  Dollars.


        

      

       

       

      The
parties have signed this agreement on the Effective Date.

       

      
        
          
            
              	Red Mile Entertainment, Inc.	 	 	Atari Interactive, Inc.	 
	 	 	 	 	 
	
                      By:     
      /s/ Chester P. Aldridge

                    	 	 	
                      By:  
      /s/ P. Harrison

                    	 
	
                      Name:
      Chester P. Aldridge

                    	 	 	
                      Name:
      P. Harrison

                    	 
	
                      Title:  
      CEO

                    	 	 	
                      Title:
      President

                    	 


            

          

        

      

       

       

       

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