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): December 30, 2008
Red
Mile Entertainment, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of
incorporation)
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000-50814
(Commission
File
Number)
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20-4441647
(IRS
Employer
Identification
Number)
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223 San
Anselmo Way, #3
San
Anselmo, CA 94960
(Address
of principal executive offices) (Zip Code)
(415)
339-4240
(Registrant's
telephone number, including area code)
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:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
1 – Registrant’s Business and Operations
Item
1.01. Entry into a Material Definitive Agreement.
On
December 30, 2008, Red Mile Entertainment, Inc. (“Red Mile”) entered into a
Standstill Agreement (the “Standstill Agreement”) with SilverBirch Inc., an
Ontario (Canada) corporation (“SilverBirch”), (Red Mile, together with
SilverBirch, the “Parties”).
As
previously disclosed in the Current Report on Form 8-K filed by Red Mile on
December 5, 2008 with the Securities and Exchange Commission (the “Commission”),
Red Mile sent written notice (“Termination Notice”) to SilverBirch on December
3, 2008 that Red Mile terminated the Agreement and Plan of Merger (“Merger
Agreement”) dated October 7, 2008 with SilverBirch, effective December 3, 2008,
under Section 9.2(c) of the Merger Agreement pursuant to authorization of Red
Mile’s board of directors. Red Mile’s termination was based on the material
breach of the Merger Agreement by SilverBirch. A copy of the Merger
Agreement was filed as Exhibit 2.1 to Red Mile’s Current Report on Form 8-K
filed with the Commission on October 14, 2008.
Also as
previously disclosed in the Current Report on Form 8-K filed by Red Mile on
December 5, 2008 with the Commission, SilverBirch had advanced $750,000 Canadian
Dollars (the “Advance”) to Red Mile pursuant to a secured credit
agreement dated May 7, 2008, as amended by the parties on October 7, 2008 to
extend the maturity date (the “Facility”). By its terms, the Facility
obligated Red Mile to repay all amounts advanced under the Facility within
fifteen days after termination of the Merger Agreement. In response
to Red Mile’s Termination Notice, Red Mile received a demand from SilverBirch on
December 3, 2008 for repayment of the Advance, with interest, by December 18,
2008.
Pursuant
to the Standstill Agreement, SilverBirch asserts that Red Mile is in default
under one or more of the terms of the Facility and Red Mile asserts that it has
claims against SilverBirch under the Merger Agreement and defenses under the
Facility.
In
connection with the Standstill Agreement, the Parties have agreed to forbear and
standstill from exercising their respective rights and remedies against each
other during the “Standstill Period”. Such period commences on December 30, 2008
and ends on the “Standstill Termination Date”, the date which is the earlier of:
(i) the date of the payment of the Final Settlement Payment (as such term is
defined below); (ii) July 31, 2009; or (iii) the date that SilverBirch gives
written notice to Red Mile of SilverBirch’s election to terminate the Standstill
Period in the event Red Mile breaches or fails to comply with any of the terms
of the Standstill Agreement “Early Termination”.
Under the
Standstill Agreement, Red Mile has agreed to pay SilverBirch the following
amounts in Canadian Dollars on the following dates:
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(1)
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$50,000
upon execution of the Standstill
Agreement;
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(2)
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$225,000
on the earlier of: (i) Red Mile achieving certain development milestones
in connection with development of it’s Heroes Over Europe game and
receiving the next co-publishing installment payment from it’s
co-publishing partner; and (ii) February 6,
2009;
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(3)
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$250,000
on the earlier of: (i) Red Mile achieving the next succeeding milestone
following the aforementioned milestone and receiving applicable
co-publishing installment payment from it’s co-publishing partner; and
(ii) March 20, 2009; and
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(4)
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$75,000
on the earlier of: (i) Red Mile signing a publishing agreement in
connection with another game it has under development; and (ii) July 31,
2009.
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Each of
the above-referenced payments are referred to as “Settlement Payment
Installments” and collectively, the four Settlement Payment Installments are
referred to as the “Final Settlement Payment.”
Subject to timely payment
of the Final Settlement Payment by Red Mile, the Parties have agreed to
fully and forever irrevocably, unconditionally and completely release, remise,
acquit and discharge each Party and its respective heirs, successors, assigns,
representatives, subsidiaries, affiliates and divisions, and the respective
officers, directors, shareholders, agents, employees, representatives,
successors and assigns of each of the foregoing, from all claims, liabilities
and causes of action whatsoever including, without limitation, those arising out
of the documents related to the Advance and the Merger Agreement.
The
foregoing description of the Standstill Agreement is qualified in its entirety
by reference to the full text of such agreement, a copy of which is attached
hereto as Exhibit 10.1, and which is incorporated by reference into this Item
1.01.
Section
2 – Financial Obligations
Item
2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant
The
information included under Item 1.01 of this Form 8-K, which contains a
description of the payment obligations, is hereby incorporated by
reference into this Item 2.03.
Safe
Harbor for Forward-Looking Statements
Statements
in this Current Report may contain, in addition to historical information,
certain forward-looking statements. All statements included in this Current
Report concerning activities, events or developments that Red Mile expects,
believes or anticipates will or may occur in the future are forward-looking
statements. Actual results could differ materially from the results discussed in
the forward-looking statements. Forward-looking statements are based on current
expectations and projections about future events and involve known and unknown
risks, uncertainties and other factors that may cause actual results and
performance to be materially different from any future results or performance
expressed or implied by forward-looking statements. Additional information on
risks, uncertainties and factors is included in Red Mile’s Annual Report on Form
10-KSB, Quarterly Reports on Form 10-Q and other documents filed with the
Commission.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits
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Exhibit
Number
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Description
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10.1
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Standstill
Agreement among SilverBirch Inc. and Red Mile Entertainment, Inc. dated
December 30, 2008.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Red
Mile Entertainment, Inc.
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By:
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/s/ Chester
P. Aldridge
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Chester
P. Aldridge
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Chief
Executive Officer
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Date:
January 5, 2008
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