Iwerks Entertainment Announces Increased Investment From S. Kumars

30-Oct-00

Iwerks Entertainment Inc. (NASDAQ: IWRKC), a leading provider of special venue theatres, announced that the S. Kumars Group has purchased on the open market approximately 19 percent of the outstanding shares of common stock of Iwerks Entertainment Inc. in a single large block of stock. This investment was made five days after a deal was announced between Iwerks and S. Kumars and its affiliates, whereby 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 at a conversion price of $2.00 per share. 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. As previously announced, the Iwerks Board of Directors has approved the transaction, and final completion is subject to customary closing conditions including Iwerks' stockholder approval and receipt of regulatory approvals in India. Iwerks currently anticipates completing the transaction in the fourth calendar quarter of 2000. ""We believe that our investment in Iwerks will prove profitable for both companies,"" said Mr. Vikas S. Kasliwal, Chairman of Landmarc Leisure, an S. Kumars Group Entertainment Company. ""With our goal of opening family entertainment centers throughout India over the next decade, we believe that this relationship is ideal to reach our combined goals of growth and profitability. ""We saw the chance to purchase a large block of Iwerks stock as a unique opportunity to increase our stake in Iwerks at an attractive price. We are very excited about our increased ownership and about the future prospects for our relationship with Iwerks."" ""We are delighted that the S. Kumars Group has chosen to increase their investment in Iwerks, demonstrating their firm commitment to our combined objectives,"" said Don Iwerks, Chairman of Iwerks Entertainment. ""It is exciting to think about how Iwerks, in the new millennium, will contribute to the entertainment enjoyment of the millions of people of India, as we have to the many other nations of the world over the past 14 years."" For more information about Iwerks Entertainment Inc., visit www.iwerks.com.

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