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EXHIBIT 3
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT dated as of August 4, 1997 (this
"Agreement"), by and between the undersigned stockholder (the "Stockholder") of
Showscan Entertainment Inc., a Delaware corporation (the "Company"), and Iwerks
Entertainment, Inc., a Delaware corporation (the "Parent"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
assigned to them in the Merger Agreement referred to below.
WHEREAS, as of the date hereof, the Stockholder owns of record
and beneficially an aggregate of 104,590 shares of Common Stock, par value
$0.001 per share ("Company Common Stock") of the Company, and 12,000 shares of
Series C Convertible Preferred Stock, par value $0.001 per share ("Company
Preferred Stock") of the Company (such shares of Company Common Stock and
Company Preferred Stock, together with any other voting or equity securities of
the Company hereafter acquired by the Stockholder prior to the termination of
this Agreement, being referred to herein collectively as the "Shares").
WHEREAS, concurrently with the execution of this Agreement, the
Company, the Parent and IWK-1 Merger Corporation, a Delaware corporation and a
wholly owned subsidiary of the Parent ("Merger Sub"), are entering into an
Agreement and Plan of Reorganization (as the same may be amended or modified at
any time and from time to time, in accordance with the terms thereof, the
"Merger Agreement"), pursuant to which, upon the terms and subject to the
conditions thereof, Merger Sub will be merged with and into the Company (the
"Merger");
WHEREAS, the Board of Directors of the Company has approved this
Agreement within the meaning of Section 203(a)(1) of the Delaware General
Corporation Code (the "DGCL"); and
WHEREAS, as a condition to the willingness of the Parent to enter
into the Merger Agreement, the Parent has requested that the Stockholder agree,
and in order to induce the Parent to enter into the Merger Agreement, the
Stockholder is willing to agree, to vote for the Merger, upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
Section 1. Voting of Shares. The Stockholder hereby agrees that,
at any meeting of the stockholders of the Company, however called, and in any
action by consent of the stockholders of the Company, the Stockholder will vote
all of the Shares (a) in favor of adoption of the Merger Agreement and approval
of the Merger and the other transactions contemplated by the Merger Agreement
and (b) in favor of any other matter necessary to consummation of the
transactions contemplated by the Merger Agreement and considered and voted upon
by the
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stockholders of the Company (or any class thereof). The Stockholder acknowledges
receipt and review of a copy of the Merger Agreement.
Section 2. Transfer of Shares. From and after the date hereof
until the earlier of any termination of this Agreement in accordance with the
terms hereof or the Effective Time, the Stockholder will not, directly or
indirectly, (a) sell, assign, transfer, pledge, encumber or otherwise dispose of
any of the Shares, (b) deposit any of the Shares into a voting trust or enter
into a voting agreement or arrangement with respect to any of the Shares or
grant any proxy or power of attorney with respect thereto which is inconsistent
with this Agreement or (c) enter into any contract, option or other arrangement
or undertaking with respect to the direct or indirect sale, assignment, transfer
or other disposition of any Company Common Stock or Company Preferred Stock.
Section 3. Irrevocable Proxy.
(a) The Stockholder hereby appoints Xxx X. Xxxxxx
and Xxxxx Xxxxxxxx, their successors or any other designee of Parent, the sole
and exclusive and true and lawful proxy, agent and attorney-in-fact of the
Stockholder, with full power of substitution and resubstitution, to vote or to
execute and deliver written consents or otherwise act with respect to all of the
Shares, as fully, to the same extent and with the same effect as the Stockholder
might or could do under any applicable laws or regulations governing the rights
and powers of stockholders of a Delaware corporation, but only in connection
with the approval of the Merger Agreement and the Merger and such other matters
as may be necessary to effectuate the transactions contemplated under the Merger
Agreement (the "Merger Matters") and only in the event the Stockholder does not
vote on the Merger Matters, or any of them.
(b) The Stockholder shall execute such additional
documents and take such additional actions as Parent may reasonably request to
effectuate or further secure and protect the rights of Parent under this Section
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(c) Parent and the Stockholder intend that this
proxy is coupled with an interest in the Shares, and, as a result, this proxy
shall be irrevocable until the date this proxy terminates as provided in Section
3(e) hereof, whereupon it shall automatically lapse.
(d) The Stockholder hereby revokes any other proxy
or proxies to act and vote on behalf of any and all Shares now or hereafter
owned by the Stockholder, and hereby ratifies and confirms all acts and votes
that the proxy specified herein may lawfully perform by virtue of this
authorization.
(e) This proxy shall terminate and shall be
revoked upon termination of this Agreement pursuant to Section 5 hereof.
Section 4. Waiver of Dissenters Rights. The Stockholder hereby
waives his rights to dissent in connection with the transactions contemplated by
the Merger Agreement with respect to any of his shares of Company Preferred
Stock.
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Section 5. Termination. This Agreement shall terminate (a) upon
any termination of the Merger Agreement in accordance with the terms thereof or
(b) in the event that the Board of Directors of the Company shall withdraw or
modify in any manner materially adverse to the Parent its approval or
recommendation of the Merger Agreement or the Merger.
Section 6. Miscellaneous.
(a) This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect thereto. This Agreement may not be amended,
modified or rescinded except by an instrument in writing signed by each of the
parties hereto.
(b) If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest
extent possible.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of law thereof.
(d) Notwithstanding anything herein to the
contrary, the covenants and agreements set forth herein shall not prevent any of
the Stockholder's designees, partners or affiliates serving on the Board of
Directors of the Company from taking any action, subject to and in conformity
with the applicable provisions of the Merger Agreement, while acting in such
capacity as a director of the Company.
(e) This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(f) The Stockholder acknowledges that Parent's
rights hereunder are unique and that it will not have adequate remedies at law
for the Stockholder's failure to perform his obligations hereunder. Accordingly,
it is agreed that Parent shall have the right to specific performance and
equitable injunctive relief for the enforcement of such obligations in addition
to all other available remedies at law or in equity.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first written above.
PARENT: Iwerks Entertainment, Inc., a
Delaware corporation
By: /s/ Xxx X. Xxxxxx
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Name: Xxx X. Xxxxxx
Title: President and Chief
Executive Officer
STOCKHOLDER:
/s/ Xxxxxxx X. Xxxx, Xx.
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Xxxxxxx X. Xxxx, Xx.
