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Dark Castle Makes Distribution Deal With Warner Bros. For 15 Films

(October 16, 2006 - Burbank, CA) – Dark Castle Entertainment, the successful production company headed by producer Joel Silver, has structured a deal with CIT Group Inc. (NYSE: CIT) to finance the production of 15 films over the next six years, Silver announced today. Concurrently, Warner Bros. Pictures’ president of production Jeff Robinov announced a comprehensive distribution arrangement with Dark Castle in which the Studio will release the company’s slate of 15 films, all of which will be 100% financed by Dark Castle through its agreement with CIT Communications, Media & Entertainment. Dark Castle’s pact with CIT gives Silver sole creative control and greenlight approval over Dark Castle projects, as well as ownership of the films produced by the company. “This exceptional arrangement with CIT gives us the creative and financial freedom to significantly increase the number of films on the Dark Castle slate and broaden our focus beyond horror to become a full genre label, encompassing thrillers, action pictures and action-comedies,” said Silver, who launched Dark Castle in 1999 with co-founder Robert Zemeckis with the release of the number one hit "House on Haunted Hill." Dark Castle has since produced a series of successful horror films, including "13 Ghosts," "Ghost Ship," "Gothika," starring Academy Award winning actress Halle Berry, "House of Wax," and the upcoming supernatural thriller "The Reaping," starring two-time Oscar winner Hilary Swank, which is set for release by Warner Bros. Pictures in March of 2007. In an unprecedented move for the Studio, Warner Bros. will take a distribution fee and finance all print and advertising costs for 15 Dark Castle films over the next six years, in exchange for worldwide distribution rights – with the exception of up to two international territories, to which Dark Castle will be permitted to sell its films directly. “Warner Bros. has enjoyed an extremely successful relationship with Joel Silver, going back 20 years, and he has more than earned our confidence and trust,” said Robinov. “Entering into this new phase in our business arrangement gives Joel the kind of well-earned creative freedom enjoyed by very few producers in the film industry, and it lets him do what he does best – make great movies.” Dark Castle has chosen France as one of the two territories to which it will sell its films directly. As part of the financial capitalization structure, StudioCanal has agreed to partner with Dark Castle in exchange for the right to distribute the company’s slate exclusively in France. CIT, a leading global provider of commercial and consumer finance solutions, is a Fortune 500 company with $68 billion in managed assets. As the principal investor in the deal with Dark Castle, CIT structured and underwrote $220 million of senior and junior capital representing a substantial portion of the company’s capitalization. As Arranger, CIT brought together a consortium of financial institutions experienced in the film finance sector. CIT is also a significant investor in Dark Castle’s senior and subordinated debt, which will fund up to 15 films with budgets ranging from $15-40 million. The first film under the deal is expected to be "White Out," an action thriller about a lone U.S. Marshal stationed in Antarctica, who must race against the onset of a brutal winter as she tracks the continent’s first serial killer. “We are thrilled to enter into this partnership with Joel and his team,” said Wade Layton, managing director of CIT Communications, Media & Entertainment. “Silver Pictures’ and Dark Castle’s unparalleled track record, combined with their significant relationship with Warner Bros., make this a very extraordinary venture.” Kevin Khanna, senior vice president of CIT Communications, Media & Entertainment, said “We succeeded in bringing together a select group of investors who recognized Dark Castle as a unique and compelling opportunity. We’re pleased to have coordinated this financing and look forward to our long-term partnership.” With the announcement of the deal, Dark Castle is elevating Steve Richards and Susan Downey to co-presidents, with Richards overseeing the financial and business side of the company and Downey running the creative and production division. Richards, entering his twelfth year working with Silver, was instrumental in developing the business plan for Dark Castle and in forging the relationship with CIT. “This new financial partnership with CIT is a giant step in the evolution of Dark Castle,” Richards said. “It is a very appealing structure that provides great benefits to all of those involved.” “As we expand our production slate, we’ll look to amplify the range of projects we bring into the company and collaborate with innovative filmmakers, writers and talent,” said Downey, an eight-year veteran of Silver Pictures. Silver Pictures’ existing deal with Warner Bros. will continue through 2009. The company has produced 33 films for the Studio that have generated nearly $8 billion in worldwide revenue to date, including the Lethal Weapon series and the blockbuster Matrix trilogy.
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