Peace Arch Entertainment Group Inc. announces motion picture co-financing and distribution agreement with Showtime Networks Inc. TORONTO, May 11 /PRNewswire-FirstCall/ -- Peace Arch Entertainment Group Inc. (AMEX and TSX: "PAE") has concluded an agreement with Showtime Networks Inc., a subsidiary of Viacom Inc. to co-finance and distribute a slate of motion pictures which Peace Arch intends to release theatrically in Canada and internationally, and Showtime will premiere on the Showtime Network in the United States. The agreement was announced jointly today by Peace Arch Entertainment Group president and CEO, Gary Howsam and Matthew Duda, Executive Vice President, Program Acquisitions, Planning & Distribution at Showtime. Under terms of the pact, Peace Arch will co-finance up to 15 motion pictures. Once a film has been approved to be produced by both parties, Peace Arch will acquire ownership of all non-USA rights as well as provide production support. The agreement runs through 2007 and contemplates motion pictures with average budgets of approximately C$15,000,000. International representation of exploitation rights will be handled by Peace Arch Films Limited, the London, UK based subsidiary of the company. USA/Canada distributor(s) managing the theatrical exhibition of the pictures will be announced as and when finalized. The financing obligations of the company are being supported by The Royal Bank of Scotland in London. Howsam comments: "This agreement provides great opportunities for Peace Arch; the production of high quality films, supply of ongoing product to our international sales company and the chance to build a strong working relationship with a great company like Showtime." "This agreement with Peace Arch is an important piece of Showtime's strategy to find strategic partners to help co-finance high profile movies," said Duda. We are pleased to have found such a strong partner in Peace Arch Entertainment." Peace Arch Entertainment Group Inc., one of Canada's foremost entertainment companies, creates, develops, produces and distributes feature films and proprietary television programming for worldwide markets. Peace Arch Entertainment Group Inc. has offices in Toronto, Vancouver, London and Los Angeles. This press release includes statements that may constitute forward- looking statements, usually containing the words "believe", "estimate","project", "expect", or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, availability of capital and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. For media inquires, please contact: Nicole Spracklin Peace Arch Entertainment Group Inc. Tel: (416) 487-0377 (ext. 237) Email: DATASOURCE: Peace Arch Entertainment Group Inc. CONTACT: For media inquires, please contact: Nicole Spracklin, Peace Arch Entertainment Group Inc., Tel: (416) 487-0377 (ext. 237), Email:

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