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  • Rainmaker Entertainment Announces Agreement To Sell

28th June 2012

Rainmaker Entertainment Announces Agreement To Sell

RainmakerRainmaker Entertainment Inc. announced earlier today that it has entered into an asset purchase agreement dated June 27, 2012 pursuant to which Rainmaker Studios Inc., a wholly-owned subsidiary of Xing Xing Digital Corporation, has agreed to acquire certain assets comprising substantially all of Rainmaker’s animation studio assets.

The assets are being acquired in consideration for the assumption of existing Rainmaker book liabilities in an approximate amount of $7 million and the assumption of all real property leases. The Transaction is conditional upon, among other things, the approval of Rainmaker’s shareholders and the receipt of the required regulatory approvals, including any approvals required under the Investment Canada Act.

In connection with the Transaction, Rainmaker has agreed to provide a loan to RSI in the aggregate principal amount of $5 million. The loan has a term of four years and will bear interest at a rate of prime plus 2%. The loan may be prepaid at any time without penalty. Additionally, Rainmaker shall be granted an option, exercisable during the fourth year of the loan, to convert the principal and accrued interest in respect of the loan into common shares of RSI. Based on the starting principal amount of the loan, Rainmaker would be entitled to acquire 30% of the outstanding common shares of RSI at the time of conversion. Also, during the term of the loan, Rainmaker shall be entitled to nominate one of five directors to the board of RSI.

The board of directors of Rainmaker has unanimously approved entering into the asset purchase agreement and recommends that Rainmaker shareholders approve the Transaction. Full details of the Transaction will be included in a management information circular and related proxy materials to be mailed to Rainmaker shareholders in accordance with applicable securities laws in advance of the shareholders meeting, which is currently scheduled to occur on July 31, 2012.

Tim McElvaine, Chairman of the Board, stated, “Following completion of the Transaction, Rainmaker’s assets will include working capital in excess of $2 million, proceeds of the RSI loan, the potential to participate in any adjusted gross revenues payable to the producer of Escape from Planet Earth and substantial non-capital tax losses. The board remains committed to maximizing the value of these assets for Rainmaker’s shareholders.”

This entry was posted on Thursday, June 28th, 2012 at 12:01 pm and is filed under Animation, Business News, National News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
  1. Tami Quiring (@VillageGamer)
    5:02 am on June 28th, 2012

    Rainmaker Entertainment Announces Agreement To Sell http://t.co/DvwHM7e8

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