Australia's distribution newcomer Imagine Entertainment has picked up local rights to Undead, the horror film produced, directed and written by Queensland-based brothers Peter and Michael Spierig.

Imagine principal John Vale will release the film after it has shown at all three east coast festivals, Melbourne, Sydney and Brisbane.

The film is about a small country town that is infected with a virus that turns residents into zombies. It has already earned its filmmakers a place in the books of the William Morris Agency, which also holds US rights. Vendetta has the remaining territories and has already sold the picture to 16 countries.

Undead is Imagine's fourth theatrical pick-up since it was established in early 2002. The others were Donnie Darko, UK documentary Biggie And Tupac, and the upcoming Spanish film The Nameless.

Donnie Darko grossed A$700,000 in Australian cinemas from only seven prints and it is one of only two titles that has been in the video rental charts for over 15 weeks.

Imagine was set up by John Vale and is principally a video rental company that aims to release two titles per month direct to video.

Undead is not the only self-financed Australian film to win fares in recent months. Deeper Than Blue, directed by Sandra Sciberris and produced by Kate Whitebread, has been booked in to screen digitally at a number of independent cinemas. A Cold Summer, the second feature by commercials director Paul Middleditch, has screened at a number of festivals abroad.

Watermark, directed by Georgina Willis and produced by Kerry Rock, has just won a place in Directors' Fortnight