Seven Arts Pictures plc

June 16, 2008 07:22 ET

Production and Distribution Agreement Fully Financed with UK Financial Services Firm Zeus Partners LLP



                                      SEVEN ARTS PICTURES PLC

Production and Distribution Agreement Fully Financed with UK Financial Services Firm Zeus Partners

With  reference to previous announcements of 27 March 2008 and 1 May 2008 Seven Arts Pictures  plc
("Seven  Arts"  or  "The Company") (PLUS:SAPP) (OTCBB:SAPXF) is pleased to announce  that  it  has
completed  the deal with Zeus Partners LLP. a Manchester-based financial services firm,  to  raise
capital  for  investment  into the production and distribution costs of Seven  Arts  existing  and
future  motion  picture productions and acquisitions (the "Transaction"). The Company  closed  all
tranches of this investment on Monday, 19 May 2008.

The  total  investment by the 17 companies organized by Zeus in the Company's motion  pictures  is
approximately £134,000,000.
The  companies   set up to enable this investment to be achieved have each bought a percentage  of
certain  of  the  completed film assets of Seven Arts and have paid Seven Arts to produce  certain
other  titles. The companies have also employed Seven Arts to market and distribute all titles  on
their behalf.

Seven  Arts  is  obligated to account and pay participations to these corporations  based  on  the
distribution  proceeds  of  the  Seven Arts' motion pictures after  recoupment  of  the  Company's
distribution fees and other production and distribution costs paid by the Company.

Management now expects substantially all the net proceeds from the Transaction to be accounted for
as a reduction in the carrying value of the film costs in the balance sheet. As the maximum amount
of  the  investment  was raised by Zeus, the Company anticipates a reduction in  its  current  and
future  film  costs by approximately GBP 7,500,000 ($15,000,000 USD). The Company may also  record
fee income of an additional £1,000,000 ($2,000,000 USD).
Net  proceeds received from the Transaction have been principally used to reduce the  Seven  Art's
indebtedness, with existing production loan repayments being made in full to Cheyne  Capital,  Too
Easy  Entertainment  and Blue Rider. The balance of the proceeds have been  used  for  payment  of
general  and  administrative  costs,  and/or  to finance  investments  in  future  development  or
acquisition of films.

Information regarding films included in the Transaction:

The  company  has delivered Knife Edge (30 April 2008) and A Broken Life (30 April  2008)  and  is
looking forward to delivering another three pictures American Summer, Autopsy and Drunkboat by  30
June 2008.

Seven  Arts  takes this opportunity to advise the market that it will be providing second  interim
results before the end of June 2008.

About Seven Arts:
Seven  Arts  Pictures  plc  was founded in 2002 as an independent motion  picture  production  and
distribution company engaged in the development, acquisition, financing, production, and licensing
of  theatrical motion pictures for exhibition in domestic (i.e. the United States and Canada)  and
foreign  theatrical  markets,  and  for subsequent worldwide release  in  other  forms  of  media,
including home video and pay and free television.

About Zeus:
Zeus  Partners  is  a new financial services firm, launched to allow private investors  and  their
advisors  formal access to the products and returns that Zeus Capital has been achieving  for  its
corporate and institutional clients.
Zeus  has  a strong track record in delivering unique investment opportunities to its client  base
whether  institutions, corporations or private clients. Zeus Partners has been formed as  part  of
the  Zeus Group, with the ambition of being a market leading provider of investment product to the
private client market.
Cautionary Information Regarding Forward-Looking Statements:

Included in this news release and other information that we make publicly available from  time  to
time  are  forward-looking  management  comments and other statements  that  reflect  management's
current  outlook for future periods.  These statements include, among others, statements regarding
the anticipated benefits from the development, production, or acquisition of new film projects  as
well  as  anticipated revenue from other sources and which may be critical to the overall  revenue
and profits of the Company.

These  statements  and  expectations are based on currently available competitive,  financial  and
economic  data  along with our operating plans, and are subject to future events and uncertainties
that  could  cause  anticipated events not to occur or actual results to  differ  materially  from
historical or anticipated results. Among the events or uncertainties which could adversely  affect
future  periods  are:   changes in legal contingencies; issues surrounding  labour  disputes  with
unions  such as the Screen Actors Guild, the Director's Guild, and the Writer's Guild; our use  of
estimates  and  assumptions; and the concentration of our capital stock  ownership.  The  forward-
looking  statements  in  this news release should be read in conjunction with  the  more  detailed
descriptions  of  the  risk factors located in our Registration Statement filed  with  the  United
States  Securities  and  Exchange Commission as amended on Form 20-F (annual  report  pursuant  to
Section  13  or  15(d) of the Exchange Act) for the year ended March 31, 2007 and  as  updated  to
December  31st,  2007  under  Part  1  Item 3 Section 3.D entitled  "Risk  Factors".  The  Company
undertakes  no  obligation to update or revise any forward-looking statements  contained  in  this
release as a result of new information or future events or developments.

The Directors of the issuer accept responsibility for this announcement.

Seven Arts Pictures plc UK contact:
Elaine New, +44-207-355-2051


Seven Arts Pictures plc US contact:
Erik Smith, +1-323-692-5010

Seven Arts Pictures plc

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