Rainmaker Income Fund

Rainmaker Income Fund

November 29, 2007 12:30 ET

Rainmaker Announces Agreement to Sell Post Production and Visual Effects Operations to Deluxe

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 29, 2007) - Rainmaker Income Fund (the "Fund") (TSX:RNK.UN) and its subsidiary Rainmaker Entertainment Inc. ("Rainmaker") are pleased to announce that Rainmaker has entered into a definitive agreement (the "Agreement") with Deluxe Entertainment Services Group Inc. and Deluxe Vancouver Ltd. (collectively "Deluxe") whereby Deluxe has agreed to purchase the assets of Rainmaker's post production and visual effects operations in Vancouver, British Columbia and the shares of Rainmaker Animation and Visual Effects UK Limited, Rainmaker's visual effects operation in London, England (collectively the "Post and VFX Operations").

The total purchase consideration will be payable as follows:

- $14.0 million in cash on closing;

- $2.5 million by way of a promissory note due one year after closing;

- $6.0 million earn-out based on revenue targets;

- $3.5 million assumption of capital leases; and

- $5.0 million Deluxe service credits available to Rainmaker Animation operations.

Closing is subject to the approval of Heritage Canada and to certain other customary closing conditions. The transaction is expected to be completed on December 31, 2007.

Warren Franklin, CEO of Rainmaker, commented, "The sale to Deluxe will allow Rainmaker Entertainment to fully focus on becoming a world leader in computer animated films and accelerate the development of our own film properties. Our goal is to build a world-class computer animation studio producing family oriented entertainment projects, which historically have been the strongest performing segment of the entertainment business. We have commenced production on our first animated theatrical feature film, Escape From Planet Earth, for The Weinstein Company and have begun developing a trilogy of 3D stereoscopic feature films based on ReBoot, Rainmaker's classic television series which was the first computer generated TV show in the world."

Rainmaker Entertainment is focusing its resources on animation for a number of reasons, principally, as it is an area with strong growth potential. Vancouver, with its vital talent pool, excellent training facilities and robust industry incentives, is poised to be at the forefront of digital technology and creative growth and Rainmaker will take advantage of this expansive potential. With the limited number of qualified computer animation studios worldwide and a growing demand for animated content throughout the world, Rainmaker will utilize its streamlined infrastructure, built for its successful work for hire projects, and access creative and economic growth opportunities, particularly in the 3D stereoscopic film market, to further develop and own content.

Franklin went on to state, "We are also very pleased that Deluxe, a world leader in providing a broad range of entertainment industry services and technologies to major Hollywood studios and an international client base, will be carrying on the Post and VFX Operations. This acquisition will only enhance the stature of the industry in Vancouver. The acquisition, upon completion, will give Deluxe post production, film laboratory and visual effects capabilities in Vancouver, along with enhancing Deluxe's existing visual effects offerings in London."


Additional information regarding the proposed sale transaction and other publicly filed documents relating to the Fund, including the interim financial statements and management discussion and analysis are available through the internet on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR"), which can be accessed at www.sedar.com.

The Fund is an unincorporated open-ended limited purpose trust located in Vancouver, British Columbia. The Fund indirectly owns 100% of Rainmaker Entertainment Inc. ("REI"), EP Canada Limited Partnership ("EP") and Canada Film Capital Limited Partnership ("CFC"). REI is an award-winning computer generated animation company providing superior service, innovative technology and world-class talent to produce animated feature films, television, direct to DVD, games and commercials. EP is a leading provider of payroll services for the film and television industry across Canada. CFC provides tax credit administration services and financing of tax credits through factoring for film and television productions across Canada.

This press release and any related attachments may contain forward-looking statements that involve a number of risks and uncertainty. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are difficulties, delays or the inability to obtain the approval of Heritage Canada or the failure of the parties to satisfy customary closing conditions, market and general economic conditions and the risk factors detailed from time to time in the periodic reports and documents filed by the Fund with The Toronto Stock Exchange and other regulatory authorities. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and the Fund undertakes no obligation to update the forward-looking statements should there be a change in conditions, or in management's estimates or opinions.

The contents of this press release have neither been approved nor disapproved by any regulatory authority.

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