July 21, 2006

Rainmaker to acquire Mainframe Entertainment

Rainmaker Income Fund this week announced that its subsidiary RNK Capital Limited Partnership (collectively "Rainmaker")
has entered into an agreement to purchase from IDT Entertainment Inc. and its affiliates ("IDT") 62% of the outstanding shares (the "IDT Block") of Mainframe Entertainment Inc. ("Mainframe"). Mainframe is a CG animation company with $19 million in revenues in fiscal year ended March 31, 2006. The acquisition is expected to close on July 31, 2006.

Following the closing of the acquisition from IDT, Rainmaker intends to acquire the balance of the shares of Mainframe. If Rainmaker acquires all the remaining shares of Mainframe at the intended price the aggregate acquisition purchase price to Rainmaker for all shares of Mainframe will be approximately $13.8 million.

Warren Franklin, current president of Rainmaker Animation & Visual Effects, has been appointed CEO and a trustee of Rainmaker, effective immediately. Barry Chambers, president of Rainmaker Limited Partnership, will continue in that position overseeing Rainmaker's lab and postproduction services.

Upon completion of the purchase transactions, Rainmaker proposes to combine the businesses of Mainframe and Rainmaker Animation & Visual Effects. Franklin and Rick Mischel, the current CEO of Mainframe, will lead the new entity. The combined entity would become the largest animation and visual effects studio in Canada, employing more than 300 artists and technicians.

Franklin, a veteran entertainment and visual effects executive, formerly held positions at Lucasfilm Ltd., Colossal Pictures, Cinesite/Kodak, and Pinnacle Studios. Mischel was previously president and COO of The Harvey Entertainment Co., where he managed the production and licensing of entertainment intellectual properties like "Casper the Friendly Ghost." He began his career as an entertainment attorney with O'Melveny & Myers and had also been an independent producer developing and/or producing projects for Nickelodeon, Fox Television Studios, the WB Network, and Canal Plus.