FIRST AMENDMENT
TO
SCHEDULE
This First Amendment to Schedule ("Amendment") is entered into as of June
22, 2000, by and between Matrix Funding Corporation (the "Lessor") and Iwerks
Entertainment, Inc. (the "Lessee").
RECITALS
This Agreement is being entered into in reference to the following facts:
The Lessor and the Lessee entered into a Master Lease Agreement,
number R0556, dated as of June 14, 1996 (the "Lease") and Equipment Schedule
No. 1 thereto, dated June 14, 1996 (the "Schedule"). Capitalized terms used
herein without definition have the meaning assigned thereto in the Schedule.
The Lessor and the Lessee desire to amend the Schedule in certain respects
subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto hereby agree as follows.
ARTICLE ONE - AMENDMENTS
1.1 AMENDMENT OF SECTIONS 4, AND 5. Sections 4 and 5 of the Schedule are
hereby amended and restated to read in their entirety as follows:
"4. Initial Period: 51 months from the Commencement Date.
5. Monthly Rental: $69,594 (plus applicable taxes) prior to March
1, 2000; zero on March 1, April 1, May 1, and June 1, 2000; $45,042
(plus applicable taxes) on July 1, August 1, September 1, October 1,
and November 1, 2000; and on December 1, 2000, a final payment equal
to all sums owing by the Lessor to Imperial Bank (plus applicable
taxes) under a Promissory Note, dated as of June 28, 1996, in the
original principal sum of $2,657,100.06, as amended by the First
Amendment to Promissory Note, entered into as of June 22, 2000. (the
promissory note, as amended, being hereinafter referred to as the
"Note"). Lessor represents to Lessee that as of June 22, 2000: (i) the
unpaid principal balance of the Note is $419,413.49 (exclusive of
accrued and unpaid interest on the Note as of that date in the amount
of $16,956.22), (ii) the Note bears interest on the principal balance
of 9.88% before July 1, 2000, and of 12% after June 30, 2000, (iii)
subject to Lessor's and Lessee's execution and delivery of the First
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Amendment to the Schedule and Lessee's payment to Imperial Bank by
July 14, 2000, of the July 1, 2000, Monthly Rental in the amount
specified above in this Section 5, and (iv) provided Lessee pays all
remaining Monthly Rental payments in the amounts and when due as
specified above in this Section 5; then no other amounts are or will
be owed by Lessor under the Note."
1.2 NEW SECTION 12. The Schedule is amended by the addition of a new
section, number 12, which shall read in its entirety as follows:
"12. AGREEMENT REGARDING SALE/PURCHASE OF THE EQUIPMENT.
(a) Lessee may arrange for the cash sale to an unrelated third
party of one of the trailers comprising the Equipment. Such sale is
subject to the approval of the sales price by Lessor and its lender,
Imperial Bank, in their sole discretion (the `Approval'). The proceeds
from the sale shall be applied to payment of the Monthly Rentals
specified in SECTION 1.1 above (beginning with the December 1, 2000,
payment) in inverse order of maturity of payment. After all Monthly
Rental payments have been paid, any excess proceeds from the sale
shall be applied to the purchase price for the remaining items of
Equipment specified in paragraph 12(b) below. Subject to the Approval
and Imperial Bank's agreement to release its security interest in the
trailer to be sold, Lessor agrees to execute documents reasonably
required to effect the sale of the trailer as arranged by Lessee.
(b) Provided all Monthly Rentals have been paid, on December 30,
2000, Lessee shall purchase the Equipment (exclusive of the trailer
sold pursuant to paragraph 12(a) above) for the price of $485,000
(plus applicable sales tax) free and clear of all liens and
encumbrances created by Lessor. Applicable sales tax on the purchase
is due in full on January 1, 2001. Lessor agrees to finance the
purchase price over a period of 18 months at 12.5% interest, with the
first payment of $29,382.99 due January 1, 2001, followed by seventeen
(17) consecutive monthly payments, each in the same amount, due on the
first day of each month thereafter. Lessee agrees to execute such
documents as Lessor shall reasonably require to evidence the foregoing
obligation. Default in the payment of any of the installments shall
constitute an Event of Default under the Lease, and Lessor shall be
entitled to exercise its remedies under the Lease."
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ARTICLE TWO - REPRESENTATIONS, WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES. In order to induce the Lessor to enter
into this Amendment, the Lessee represents and warrants to the Lessor that:
(a) The Lessee has the power and authority and has taken all
action necessary to execute, deliver and perform its obligations under this
Amendment and all other agreements and instruments executed or delivered in
connection herewith and this Amendment and such other agreements and instruments
constitute the valid, binding and enforceable obligations of the Lessee.
(b) The Lessee's representations and warranties contained in the Lease
are true and correct in all respects on and as of the date hereof as though made
on and as of the date hereof and no Event of Default has occurred and is
continuing as of the date hereof, except as expressly cured or waived by this
Amendment.
2.2 ACKNOWLEDGMENT OF BORROWER. The Lessee expressly acknowledges and
agrees that as of the date of this Amendment, (a) all of the payments due under
the Lease have been assigned and are payable to Imperial Bank (the "Bank"), and
(b) as to the Bank only, it has no offsets, claims or defenses whatsoever
against any of the indebtedness owing under the Lease.
2.3 WAIVER OF LATE CHARGES. The Lessor hereby waives the Lessee's
obligation to pay all late charges accruing under the Lease prior to July 14,
2000.
ARTICLE THREE - GENERAL PROVISIONS
3.1 FULL FORCE AND EFFECT. Except as expressly amended hereby, the Lease,
the Schedule, and all other documents, agreements and instruments relating to
thereto are and shall remain unmodified and in full force and effect.
3.2. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and that all of which taken together shall constitute one and the
same instrument, respectively. Delivery of an executed counterpart of this
Amendment by facsimile shall be equally effective as delivery of a manually
executed counterpart of this Amendment. Any party delivering an executed
counterpart by facsimile shall also deliver a manually executed counterpart of
this Amendment, but failure to do so shall not effect the validity,
enforceability, of binding effect of this Amendment.
3.3 FINAL AGREEMENT. This Amendment is intended by the Lessor and the
Lessee to be the final, complete, and exclusive expression of the agreement
between them with respect
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to the subject matter hereof. This Amendment supersedes any and all prior oral
or written agreements relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers as of the date first above
written.
"LESSOR" "LESSEE"
Matrix Funding Corporation Iwerks Entertainment, Inc.
By:___________________________ By:___________________________
___________, Jeffrey M. Dahl,
President Chief Operating Officer
CONSENT
Imperial Bank hereby consents to the foregoing amendment. Imperial Bank
agrees to release its security interest in the trailer sold in accordance with
Section 12(a) of the Schedule provided the sales price of the trailer is not
less than $180,000, and the terms of the sale are otherwise reasonably
acceptable.
Imperial Bank acknowledges, represents, and agrees that the Lessor's
statements contained in Section 5 of the Schedule, as amended hereby are true
and correct.
Imperial Bank
By ____________________
Dennis DeLaPaz,
Vice President
