Red Mile Entertainment Inc - Current report filing (8-K)
May 12 2008 - 12:23PM
Edgar (US Regulatory)
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): May 7, 2008
Red Mile
Entertainment, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
(State
or other jurisdiction of
incorporation)
|
000-50814
(Commission
File
Number)
|
20-4441647
(IRS
Employer
Identification
Number)
|
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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|_|
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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|_|
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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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|_|
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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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Item
1.01. Entry Into A Material Definitive Agreement
On May 7,
2008, Red Mile Entertainment, Inc. (the "Company") entered into a secured credit
agreement with Silverbirch Inc, a Canadian publicly traded corporation
(“Lender”), in the amount of $750,000 Canadian Dollars ("The Facility"). The
Facility is available for development and production of the Company’s “Heroes
Over Europe” video game and general and administrative purposes. Any amounts
drawn on the Facility are payable no later than November 7, 2008. On
May 7, 2008, the Company borrowed CAD $302,000 against the Facility in respect
of a development payment due to the developer of the “Heroes Over Europe” video
game. The Facility bears interest at the rate of 10% per annum and is
payable to Lender quarterly in arrears. Advances under the Facility may be
pre-paid without penalty. The Facility carries a first priority security
interest in all present and future assets of the Company in addition to the
securities in the capital of the Company’s three wholly owned subsidiaries. The
Facility carries no financial or operating covenants.
The
Facility contains customary terms and conditions for credit facilities of this
type, including restrictions on the Company’s ability to incur or guaranty
additional indebtedness, create liens, make loans or investments, sell assets,
pay dividends or make distributions on, or repurchase, its stock. The
Facility also contains customary events of default, including for payment
defaults, breaches of representations, breaches of affirmative or negative
covenants, cross defaults to other material indebtedness, and bankruptcy. If a
default occurs and is not cured within any applicable cure period or is not
waived, the Lender may accelerate the obligations of the Company under the
Facility.
Concurrent with the
closing of the Facility, the Company entered into a Subordination and
Postponement Agreement with Tiger Paw Capital Corporation, a corporation owned
and operated by Mr. Kenny Cheung, a member of the Company’s Board Of Directors
(“Tiger Paw”). Under this agreement, Tiger Paw agreed to subordinate and
postpone to Lender $750,000 Canadian dollars of its $1,000,000 US dollar first
priority security interest in all the present and future assets of the Company
under its Revolving Line Of Credit Agreement entered into on February 11, 2008
with the Company
(the
“
Tiger
Paw Credit Agreement
”
).
Tiger Paw has also agreed, pursuant to a Forbearance Agreement with the Company
entered into on May
7
,
2008, not to exercise any demand or enforcement rights under the Tiger Paw
Credit Agreement or the promissory note issued by the Company in connection with
the Tiger Paw Credit Agreement until
November
7
,
2008.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The
information reported under Item 1.01 is incorporated herein by
reference.
Item
9.01 Exhibits.
(d)
EXHIBITS - The following exhibit is filed as
part of this report:
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Exhibit
No.
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Description
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10.1
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Credit
Agreement
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10.2
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General
Security Agreement
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10.3
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General
Security Agreement
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10.4
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Securities
Pledge Agreement
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10.5
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Subordination
and Postponement Agreement
|
10.6
|
Forbearance
Agreement
|
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.
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RED
MILE ENTERTAINMENT, INC.
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|
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Dated:
May 12, 2008
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By:
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/s/ Chester Aldridge
|
|
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Chester
Aldridge;
Chief
Executive Officer
|
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