Word from Rage Software is they have entered into an Unreal-engine development and sublicensing agreement with Epic Games. Here is the press release describing the arrangement, and here's an excerpt:

Rage Software is pleased to announce that it has entered into an agreement with Epic Games Inc ("Epic"), a North American games and game technology developer, to license the Unreal® Engine.

In addition, as part of the agreement, Rage has also been granted the exclusive right to sublicense the Unreal Engine to third party game developers and publishers throughout Europe. Rage will receive a royalty payment based on each license it secures. In conjunction with Epic, Rage will provide technical support for European Unreal Engine licensees.