SETTLEMENT AGREEMENT AND
GENERAL RELEASE
This Settlement Agreement and
General Release (the "Agreement") is executed as of June 22, 2009
by and between Red Mile Entertainment, Inc. (“Red
Mile”), on the one hand, and MTV Networks, a division of
Viacom International Inc. (“MTVN”) on the other hand.
Red Mile and MTVN, collectively, shall be referred to as the
“Parties.”
RECITALS
WHEREAS, the Parties entered into a
Merchandise License Agreement dated as of March 28, 2005, as
amended from time to time (the “License Agreement”)
pursuant to which License Agreement, MTVN granted to Red Mile a
license to develop, manufacture and sell video game products based
on MTVN’s property known as “Jackass” (the
“Jackass Property”) for various gaming
platforms;
WHEREAS, the Parties entered into a
Game Development Agreement dated as of June 18, 2007, as amended
from time to time (the “Development Agreement”) to
develop a “ Jackass” game for the Nintendo DS
platform;
WHEREAS, on March 7, 2008 MTVN
terminated the License Agreement and the Development
Agreement;
WHEREAS, on or about March 23, 2009,
Red Mile filed a complaint against MTVN in the Supreme Court of the
State of New York, entitled Red Mile Entertainment, Inc. v. MTV
Networks, a Division of Viacom International Inc., Index No.
09-600-888, alleging casues of action for breach of contract and
intentional interference with contract (the
“Complaint”);
WHEREAS, each party contends that it
has been damaged by the conduct of the other in connection with the
License Agreement, the Development Agreement and the Jackass
Property (the “Dispute”);
WHEREAS, the Parties now desire to
resolve all existing and potential claims, disputes, and causes of
action that they have or may have against each other
arising from or related to the Dispute in an
amicable and business-oriented manner, without the necessity of
further litigation or proceedings, in accordance with the terms set
forth below;
WHEREAS, the Parties recognize and
acknowledge that the execution of this Agreement will not be deemed
to be an admission of any liability or wrongdoing whatsoever on the
part of any party.
AGREEMENT
NOW, THEREFORE, in consideration of
the recitals and mutual promises contained in this Agreement, the
receipt and adequacy of which are hereby acknowledged, the Parties
agree as follows:
a. Within five (5)
business days after (1) receipt by MTVN of IRS form W-9’s
completed and executed by Red Mile and Bullivant Houser Bailey PC,
and (2) execution of this Agreement by the Parties and their
counsel, and (3) receipt by MTVN of written confirmation that the
Conditions Precedent set forth in Paragraph 2a below have been
satisfied, MTVN will pay or cause to be paid the sum of One Hundred
One Thousand, One Hundred Eighty-One dollars and Thirty-Two cents
($131,181 .32) to Red Mile, as a lump sum payment in settlement of
any claims based on, arising out of, relating to or in connection
with the Dispute. The payment will be made to Red Mile by wire
transfer, care of its counsel Bullivant Houser Bailey PC, pursuant
to the wire instructions to be provided by Red Mile’s
counsel.
b. All state and
federal tax payments required to be paid on account of the
consideration paid to Red Mile under this Agreement, care of its
counsel, shall be the exclusive responsibility of Red Mile and Red
Mile shall indemnify MTVN against all losses and liabilities
arising from such tax obligations.
2.
Return of MTVN’s Property and Dismissal of
Complaint
a. Within
three (3) days after execution of this agreement by the Parties and
their counsel, Red Mile agrees to (1) return all MTVN Work Product;
(2) return to MTVN all MTVN Confidential Information (as those
terms are used in the License Agreement and the Distribution
Agreement) provided to Red Mile; (3) cause to be transferred any
and all domain names registered, owned or controlled by Red Mile
that are associated with MTVN, “Jackass” and/or the
Jackass Property (the “MTVN Domain Names”); (4) return
all materials, artwork, programs, documentation, game codes, source
codes or any other electronic or computer codes, data or
programming, in any form or format, associated with the Jackass
Property including, without limitation, any and all materials that
Red Mile is obligated to return to MTVN pursuant to the License and
Distribution Agreements (“Game Materials”); and (5)
provide written notice to Prodigy Design Limited, d/b/a Sidhe
Interactive (“Sidhe”), that, as of March 7, 2008, all
contracts between Red Mile and MTVN regarding the Jackass Property
were terminated, and that all rights that Red Mile had or has
pursuant to its agreements with Sidhe, including Red Mile’s
rights to game and source codes, and any other materials related to
the Jackass Property (including, without limitation, all materials
that Sidhe is obligated to provide to Red Mile pursuant to
agreements between Red Mile and Sidhe (the “Sidhe
Materials”)) have been transferred and assigned to MTVN, and
that MTVN is the owner of all right, title and interest in and to
the Sidhe Materials. The foregoing terms in this paragraph shall be
conditions precedent (the “Conditions Precedent”) to
payment by MTVN under Paragraphs 1a-b, above. Upon completion of
the Conditions Precedent, counsel for Red Mile shall send written
confirmation of said completion to counsel for MTVN. For purposes
hereof, the Jackass Property, MTVN Confidential Information, MTVN
Domain Names, Game Materials and Sidhe Materials are collectively
referred to as the “MTVN Property.”
b. Red Mile hereby
relinquishes, transfers and assigns to MTVN any and all purported
and/or actual rights, title and interest throughout the universe
(including, without limitation, copyright, trademark other
intellectual property rights), if any, that Red Mile has, may have
or may have acquired in the MTVN Property. Red Mile agrees that it
shall not do anything to restrict, impair, encumber, alter, deprive
or adversely affect MTVN's rights in the MTVN Property. Further,
Red Mile agrees and acknowledges that MTVN shall have the sole and
exclusive right to obtain, hold an
