Lionsgate Acquires Independent Film Production and Distribution Company Mandate Pictures



    
    Deal Reunites Entrepreneurial Mandate Founder Joe Drake With Lionsgate As
    Co-Chief Operating Officer And President of Lionsgate's Motion Picture
    Group

    Acquisition Designed To Continue Growth of Lionsgate's Motion Picture
    Business And Build Company's International Presence And Library
    

    SANTA MONICA, Calif. and BEVERLY HILLS, Calif. and VANCOUVER, British
Columbia, Sept. 10 /CNW/ -- Lionsgate (NYSE:   LGF), the leading independent
filmed entertainment studio, has acquired renowned independent production and
distribution company Mandate Pictures, the two companies announced today.  The
acquisition returns entrepreneurial motion picture executive Joe Drake to the
Lionsgate family as Co-Chief Operating Officer and President of Lionsgate's
Motion Picture Group, with oversight of all areas of the Company's theatrical
production, distribution, marketing, acquisition and international theatrical
operations.  Drake will continue as CEO of Mandate.
    In the six years since Drake left his position as head of Lionsgate's
international distribution division, he founded Mandate and, with partners
Nathan Kahane and Brian Goldsmith, built it into a worldwide powerhouse
responsible for projects such as: Marc Forster's STRANGER THAN FICTION,
starring Will Ferrell; Zach Helm's upcoming magical family film MR. MAGORIUM's
WONDER EMPORIUM, starring Dustin Hoffman and Natalie Portman; Jason Reitman's
JUNO, starring Ellen Page and Michael Cera, which launched at the Toronto
International Film Festival this weekend; and HAROLD & KUMAR 2, Mandate's
follow-up to its 2004 comedy hit.
    Through Ghost House Pictures, Mandate's joint venture with Sam Raimi and
Rob Tapert, the company has produced four #1 box office releases in a row,
including the smash box office hits THE GRUDGE, BOOGEYMAN, THE GRUDGE 2 and
THE MESSENGERS, and it will release the highly-anticipated film adaptation of
the ground-breaking graphic novel 30 DAYS OF NIGHT this fall.
    Mandate Pictures has also been a leader in the foreign sales business and
has handled international sales and distribution of its own projects, as well
as other high profile films from outside production companies, including
BECAUSE I SAID SO, starring Academy Award (R) winner Diane Keaton, WHITE JAZZ,
starring Academy Award (R) winner George Clooney and SLEUTH, starring Academy
Award (R) winner Michael Caine and Jude Law.
    "We're very excited to be bringing Joe back to Lionsgate," said Lionsgate
Co-Chairman and Chief Executive Officer Jon Feltheimer.  "This acquisition
reunites an entrepreneurial executive with an entrepreneurial company as well
as adding a third party domestic and international profit center to our
diverse business operations."
    "No company is as well positioned for growth in the entertainment space
as Lionsgate, and I'm excited by the opportunity to help further shape the
vision Jon and his team are building," said Drake.  "This new partnership also
allows Nathan to continue running Mandate in the entrepreneurial spirit with
which we have been successful over the past six years."
    Mandate will continue to operate under its existing brand as an
autonomous entity with newly-named president Kahane.  It will maintain its
business as usual distribution relationships with other major studios and will
continue to operate from its current Beverly Hills, California offices with
its creative team in place.
    Lionsgate expects the $56.3 million acquisition, comprised of $44.3
million in cash and $12 million in stock to be released over an 18-month
period, to serve several important strategic benefits: continuing the long-
term growth of its filmed entertainment library; strengthening its executive
ranks; growing the ability to secure international rights to films released by
other major studios; and, building upon Mandate's success in producing films
for other studios, creating an important third-party profit center both
domestically and internationally.  In addition to the $56.3 million
acquisition cost, Lionsgate will assume approximately $6.6 million in debt
from Mandate which will be retired immediately.
    The agreement was orchestrated for Lionsgate by Lionsgate Executive Vice
President, Corporate Development Marni Wieshofer, Lionsgate Executive Vice
President, Corporate Operations and General Counsel Wayne Levin and Lionsgate
Executive Vice President, Business & Legal Affairs Jim Gladstone.  Mandate
partner and COO/CFO Brian Goldsmith, together with Vice President, Business &
Legal Affairs John Biondo, negotiated the deal on behalf of Mandate. Lionsgate
was represented by outside counsel Liner, Yankelevitz, Sunshine & Regenstreif
LLP, and Mandate was represented by O'Melveny & Myers LLP as outside counsel.
    During the past two years, Lionsgate's transactions have included the
purchase of Redbus Film Distributors in the U.K. in October 2005, the July
2006 acquisition of independent television syndication company Debmar-Mercury
LLC, the October 2006 launch of the branded FEARNet channel with partners Sony
and Comcast, the June 2007 acquisition of the U.K. DVD distribution company
Elevation Sales by a Lionsgate/StudioCanal joint partnership and the recent
strategic investments in online marketing destination Break.com and
independent film distributor Roadside Attractions.
    Lionsgate is the leading independent filmed entertainment studio, winning
the 2006 Best Picture Academy Award (R) for CRASH, and the Company is a
premier producer and distributor of motion pictures, television programming,
home entertainment, family entertainment and video-on-demand content. Its
prestigious and prolific library of more than 11,000 motion picture titles and
television episodes is a valuable source of recurring revenue and a foundation
for the growth of the Company's core businesses. The Lionsgate brand is
synonymous with original, daring, quality entertainment in markets around the
globe.
    www.lionsgate.com

    
    For further information, contact:
    Peter D. Wilkes
    Lionsgate
    310-255-3726
    pwilkes@lionsgate.com
    

    
    Kelli Easterling
    Lionsgate
    310-255-4929
    keasterling@lionsgate.com
    

    
    Stephanie Phillips
    Mandate Pictures
    310-467-4814
    sp@mandatepictures.com
    
    The matters discussed in this press release include forward-looking
statements.  Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially and
adversely from those described in the forward-looking statements as a result
of various important factors, including the substantial investment of capital
required to produce and market films and television series, increased costs
for producing and marketing feature films, budget overruns, limitations
imposed by our credit facilities, unpredictability of the commercial success
of our motion pictures and television programming, the cost of defending our
intellectual property, difficulties in integrating acquired businesses,
technological changes and other trends affecting the entertainment industry,
and the risk factors as set forth in Lionsgate's Form 10-K filed with the
Securities and Exchange Commission on May 30, 2007. The Company undertakes no
obligation to publicly release the result of any revisions to these forward-
looking statements that may be made to reflect any future events or
circumstances.
    
    Exhibit A attached
    Exhibit A
    
    On September 10, 2007, pursuant to the acquisition of Mandate, Joseph
Drake entered into an employment agreement with Lions Gate Films, Inc., a
wholly-owned subsidiary of the Company ("LGF"), to serve as its Co-Chief
Operating Officer and President of the Motion Picture Group, and Nathan Kahane
entered into an employment agreement with LGF to serve as the President of
Mandate Pictures. Pursuant to the terms of his employment agreement, Mr. Drake
was granted 525,000 restricted share units (payable upon vesting in an equal
number of shares of the Company's common stock) which are scheduled to vest
over four years based on his continued employment with LGF and half of which
are also subject to the satisfaction of certain performance targets, and
options to purchase 500,000 shares of the Company's common stock which are
scheduled to vest over five years based on his continued employment with LGF.
Pursuant to the terms of his employment agreement, Mr. Kahane was granted
25,000 restricted share units (payable upon vesting in an equal number of
shares of the Company's common stock) and options to purchase 100,000 shares
of the Company's common stock, all of which are scheduled to vest over three
years based on his continued employment with LGF.  The per share exercise
price of each option is the closing price of the Company's common stock on
September 10, 2007, the date of grant of the options.




For further information:

For further information: Peter D. Wilkes, +1-310-255-3726, 
pwilkes@lionsgate.com, Kelli Easterling, +1-310-255-4929, 
keasterling@lionsgate.com, both of Lionsgate; Stephanie Phillips, Mandate 
Pictures, +1-310-467-4814, sp@mandatepictures.com Web Site:
http://www.lionsgate.com/


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