Peace Arch Entertainment Acquires Trinity Home Entertainment

TORONTO, May 10: Peace Arch Entertainment has agreed to
acquire California-based DVD distributor Trinity Home Entertainment for
approximately $10 million.

Under the terms of the deal, Peace Arch will acquire all of
the shares of Trinity for $9.5 million in cash and $500,000 of Peace Arch
common stock. The final purchase price will be subject to adjustment upon
completion of Peace Arch’s due diligence. The acquisition is expected to close
by the end of June.

Trinity Home Entertainment is one of the leading independent
distributors of budget and first-run feature films in the U.S. Its extensive
library includes such genre classics as Stephen King’s Maximum Overdrive, Raw Deal
starring Arnold Schwarzenegger and The Octagon, featuring Chuck Norris. Trinity had unaudited
revenues of approximately $19 million and normalized net income of
approximately $2.5 million for the year ending December 31, 2006.

The acquisition furthers Peace Arch’s strategy of building
its in-house distribution capabilities while continuing to aggregate highly
marketable film and television content. The acquisition of Trinity follows the
company’s recent purchase of Castle Hill Productions and Dream LLC last
December.

“Trinity is a well run operation with top notch distribution
relationships and an excellent sales force,” said John Flock, the president of
Peace Arch Entertainment. “By integrating Trinity’s operation with Peace Arch’s
DVD distribution division in Canada, Peace Arch now has a platform upon which
to build one of the leading distribution companies in North America.”

Phillip Knowles, who founded Trinity Home Entertainment in
1999, will remain with the company as president and head of U.S. DVD
distribution operations.