Iwerks Entertainment And S. Kumars Group Announce Strategic $4 Million Investment Transaction

20-Oct-00

Iwerks Entertainment Inc., (NASDAQ: IWRKC) a leading provider of special venue theatres, announced the signing of a strategic $4 million investment transaction with the S. Kumars Group. S. Kumars, headquartered in Mumbai (Bombay) India, is one of the largest industrial companies in India with revenues exceeding $200 million in 1999.S. Kumars, its affiliates, and Iwerks have signed investment documents pursuant to which Iwerks will issue a combination of common stock, warrants and a convertible note. Under the agreements, Iwerks will sell $3 million of common stock at a price equal to $1.70 per share to S. Kumars. In addition, S. Kumars or its affiliates will purchase a five-year, $1 million aggregate principal amount, 8 percent convertible note from Iwerks, $300,000 of which has been advanced to the company upon signing of the investment documents. The note is convertible into 500,000 shares of Iwerks common stock. Iwerks will also issue to S. Kumars warrants to purchase an aggregate of 2,500,000 shares of common stock exercisable at prices ranging from $2.05 to $2.25 per share. Iwerks Board of Directors has approved this transaction, and final completion is subject to customary closing conditions including Iwerksí stockholder approval and receipt of regulatory approvals in India. Iwerks currently anticipates completing the transaction in the fourth calendar quarter of 2000. ""Our strategic investment from the S. Kumars Group is significant."" says Don Iwerks, Chairman of Iwerks Entertainment. ""It demonstrates our combined belief that the potential in the Asian marketplace, specifically India, is considerable. We believe that India is a lucrative, untapped, market for Iwerksí world-class products and services and the S. Kumars Group offers us financial resources and immediate market access. In addition to the expansion into new markets, the infusion of capital further strengthens our continued commitment to the cornerstones of our business - manufacturing, operations and technical support services for our world-wide client base."" ""We perceive considerable synergy between Iwerks Entertainment and Landmarc Leisure, an S. Kumars Group Entertainment company, with regard to our entertainment center plans in India, particularly in the Iwerks Large Format and Ride Simulation products."" says Mr. Vikas S. Kasliwal, Chairman of Landmarc Leisure. ""With access to the rich pool of software professionals in India, we can provide high quality CGI films to be distributed to the worldwide network of Iwerks theatres. Additionally, we are very pleased that Don Iwerks has accepted a position on S. Kumars Groupís Board of Directors, a role that will further expand and strengthen our ongoing strategic relationship."" For more information about Iwerks Entertainment Inc., visit www.iwerks.com.

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