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VOTING TRUST AGREEMENT dated as of August 12, 1999 (this
"Agreement"), among CITICORP VENTURE CAPITAL LTD., a New York corporation (the
"Company"), and XXXXXX X. XXXXXX, XXXXXXX X. XXXXXXXX and XXXXXXX X. XXXXXXX
(each individually, a "Trustee" and, collectively, the "Trustees").
W I T N E S S E T H:
WHEREAS, the Company owns voting shares of Class A Common Stock, par
value $.01 per share (the "Class A Shares"), of CORT Business Services
Corporation, a Delaware Corporation ("CORT");
WHEREAS, Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc. ("BRS") has
requested that the Company place certain voting shares of CORT in trust of the
Trustees in consideration of the commitment of BRS, or one or more of its
affiliates, pursuant to that certain letter agreement dated as of the date
hereof to CBF Mergerco, Inc. from BRS;
WHEREAS, the Company has determined to place into a voting trust
4,350,411 Class A Shares of CORT now or hereafter beneficially owned by the
Company in excess of 19.9% of the then aggregate issued and outstanding Class A
Shares;
WHEREAS, the Trustees are willing to serve as the trustees of
such voting trust;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I
THE VOTING TRUST
SECTION 1.01 Creation of Voting Trust and Designation of Trustees.
Subject to the terms and conditions of this Agreement, a voting trust (the
"Trust") in respect of the Class A Shares hereinafter specified is hereby
created and established in accordance with Section 218 of the Delaware General
Corporation Law, and the Company hereby appoints each of the Trustees as
trustees under this Agreement. Each of the Trustees accepts the Trust created by
this Agreement and agrees to serve as a trustee under this Agreement (with all
attendant rights and duties hereunder). Subject to the provisions of this
Agreement, the Trust shall be managed by the Trustees.
SECTION 1.02 Commencement of Trust. The Trust shall become effective
upon the execution of this Agreement.
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SECTION 1.03 Acquisition and Holding of Class A Shares by the Trust.
(a) On the date of this Trust, the Company shall deliver to,
or cause to be delivered to, the Trustees a certificate or certificates
evidencing 4,350,411 Class A Shares then owned directly or beneficially by the
Company, which certificate or certificates shall be duly endorsed, or
accompanied by stock powers duly executed in blank or such other instrument as
may be reasonably requested by the Trustees to enable the Trustees to transfer
the Trust Shares to the Trustees' name. All Class A Shares at any time deposited
in the Trust are hereinafter referred to as the "Trust Shares".
(b) If, following the date hereof, the Company shall acquire
"beneficial ownership" (as defined in Securities and Exchange Commission Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of any Class A
Shares that would increase its percentage of beneficial ownership of the then
issued and outstanding Class A Shares to more than 19.9% the Company shall,
simultaneously with such acquisition, deliver to, or cause to be delivered to,
the Trustees a certificate or certificates evidencing all such Class A Shares,
which certificate or certificates shall be duly endorsed, or accompanied by
stock powers duly executed in blank or such other instrument as may be
reasonably requested by the Trustees to enable the Trustees to transfer such
Class A Shares to the Trustees' name.
(c) After the filing of a copy of this Agreement in the
registered office of CORT in the State of Delaware, as provided in Section 1.07,
each stock certificate evidencing the Trust Shares shall be surrendered and
canceled, and new stock certificates therefor shall be issued and delivered to
the Trustees. Each certificate for Trust Shares so issued to the Trustees shall
bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ISSUED PURSUANT
TO AND ARE SUBJECT TO THE TERMS OF THAT CERTAIN VOTING TRUST
AGREEMENT MADE AS OF AUGUST 12, 1999 AMONG THE TRUSTEES OF THE
VOTING TRUST AND THE BENEFICIAL OWNER OF THESE SECURITIES. THESE
SECURITIES MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF SUCH VOTING TRUST AGREEMENT, A COPY OF WHICH IS ON FILE AT
CORT BUSINESS SERVICES CORPORATION'S REGISTERED OFFICE IN THE STATE
OF DELAWARE.
A like notation shall be made in the Company's stock transfer
records with respect to such Trust Shares.
(d) The Trustees shall retain and hold the stock certificates
evidencing the Trust Shares in accordance with, and subject to the terms and
conditions of this Agreement. Except
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as hereinafter provided, all stock certificates evidencing the Trust Shares
shall at all times be and remain in the possession of the Trustees. The Trustees
shall have no authority to sell, transfer, assign, pledge or otherwise dispose
of or encumber the Trust Shares, except to the extent otherwise specifically
provided in this Agreement. All Trust Shares and all cash, securities or other
property distributed in respect of the Trust Shares that are held by the
Trustees shall be held for the benefit of the Company and no creditors of the
Trustees shall have any right to or claim against any of the assets of this
Trust.
SECTION 1.04 Voting Trust Certificates.
(a) Issuance of Voting Trust Certificates. Upon receipt of the
new certificate representing the Trust Shares, the Trustee shall deliver to the
Company one or more voting trust certificates therefor, each substantially in
the form of Exhibit A hereto (each, a "Voting Trust Certificate"). Each Voting
Trust Certificate shall specify the series or class, and number of Trust Shares
in respect of which it is issued, shall be dated the date of its issuance and
shall be signed manually by a representative of the Trustees.
(b) Transfer or Exchange of Voting Trust Certificates.
(i) The Trustees will maintain an office or agency
in New York City at which Voting Trust Certificates may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"). The
Registrar shall keep a register of the Voting Trust Certificates and of their
transfer and exchange. The Trustees may appoint any person to act as Registrar
on their behalf, but in the absence of an effective appointment, any Trustee may
act as Registrar hereunder.
(ii) When Voting Trust Certificates are presented to
the Registrar with a request to register the transfer of such Voting Trust
Certificates, or to exchange them for Voting Trust Certificates of different
denominations which in the aggregate represent the Trust Shares for which such
Voting Trust Certificates are being exchanged, in each case, as accompanied by a
duly executed instrument of assignment or exchange substantially in the form
attached as Exhibit B hereto, then the Registrar shall register the transfer or
make the exchange as requested; provided, that the Registrar shall require, as a
condition to registering a transfer of Voting Trust Certificates, that the
transferee execute and deliver to the Trustee its written agreement to be bound
by the terms of this Agreement, substantially in the form of Exhibit C hereto.
(c) Registration of Holders. The Trustees may treat the
registered holder of a Voting Trust Certificate as the owner thereof for all
purposes. Every transferee of a Voting Trust Certificate hereunder shall be
required to become a party to this Agreement, with the same force and effect as
if such transferee had signed this Agreement, and such transferee shall for all
purposes have the rights of the Company hereunder with respect to such Voting
Trust Certificate.
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(d) Replacement of Voting Trust Certificate. Upon receipt of
evidence reasonably satisfactory to the Trustees (an affidavit of the registered
holder will be satisfactory) of the ownership and the loss, theft, destruction
or mutilation of a Voting Trust Certificate, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Trustees (provided that if the registered holder is a financial institution or
other institutional investor, its own agreement will be satisfactory), or, in
the case of any such mutilation, upon surrender of such certificate, the
Trustees shall (at the registered holder's expense) execute and deliver in lieu
of such certificate a new Voting Trust Certificate of like kind representing the
number of Trust Shares represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
SECTION 1.05 Voting Rights of Trustees.
(a) During the term of this Agreement, the Trustees shall
possess and in their sole discretion shall be entitled to and have, the duty to
exercise any and all voting rights in respect of the Trust Shares either in
person or by nominee or proxy, as hereinafter provided, and may vote for, do or
assent or consent to any act or proceeding which the Company might or could vote
for, do or assent or consent to, and shall have all other powers, rights and
privileges of the record and beneficial owners of the Trust Shares with respect
to the voting of the Trust Shares.
(b) No person other than the Trustees shall have any voting
rights in respect of any Trust Shares so long as this Agreement shall be in
effect. The Trustees shall have no beneficial interest in the Trust Shares.
(c) In voting the Trust Shares, the Trustees shall incur no
responsibility as stockholders, trustees or otherwise, except for their own
individual malfeasance.
(d) The manner of exercising the voting rights in respect of
the Trust Shares shall be determined by a majority of the Trustees.
SECTION 1.06 Irrevocability. Following the deposit of the Trust
Shares with the Trustees, this Agreement, the Trust and the nomination of the
Trustees shall be irrevocable by the Company and shall terminate only in
accordance with Section 1.10.
SECTION 1.07 Maintenance of Records. The Trustees shall file an
executed copy of this Agreement at the registered office of CORT in the State of
Delaware and at CORT's chief executive office in Fairfax, Virginia, which copy
shall be open to the reasonable inspection of any stockholder of CORT or any
beneficiary of the Trust, daily during business hours. The Trustees shall also
maintain such other records and books as are necessary or appropriate to enable
the Trustees to carry out the terms and conditions of this Agreement.
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SECTION 1.08 Dividends; Distribution of Proceeds of Sale of Trust
Shares or Assets.
(a) Subject to Section 1.08(b) below, the Company shall be
entitled to receive dividends or distributions of money, securities, or other
property, if any, collected or received by the Trustees with respect to the
Trust Shares. Any such payments received by any Trustee shall be held in trust
for the benefit of the Company and shall be paid over to the Company by the
Trustees promptly upon any Trustee's receipt of such dividends or distributions.
In lieu of receiving dividends or distributions and paying them to the Company,
the Trustees agree to promptly instruct CORT in writing to pay the dividends or
distributions (other than dividends consisting of voting securities of CORT)
directly to the Company. In the event any such instruction is given to CORT, all
liability of the Trustees with regard to the payment of such dividends or
distributions shall cease, unless and until such instruction is revoked.
(b) In the event that the Trustees shall receive any
additional voting securities of CORT through a dividend or other distribution
with respect to any Trust Shares, the Trustees shall hold such voting securities
subject to this Agreement for the benefit of the Company, and such voting
securities shall become subject to all the terms and conditions of this
Agreement to the same extent as if they were Trust Shares acquired by the
Trustees pursuant to Section 1.03. The Trustee shall issue Voting Trust
Certificates in respect of such Trust Shares to the Company as soon as
practicable after the Trustees' receipt thereof.
(c) If at any time during the term of this Agreement the
Trustees shall receive or collect any money or other property (other than voting
securities of CORT) through distribution by CORT to its stockholders, other than
as set forth in Subsections (a) or (b) of this Section 1.08, the Trustees shall
promptly distribute such money or other property to the Company.
SECTION 1.09 Disposition of Trust Shares by the Company. This Trust
is accepted by the Trustees subject to the right hereby reserved in the Company
at any time to sell, transfer, assign, or otherwise dispose of any or all of the
Trust Shares as hereinafter provided. Upon the receipt at any time of a written
direction from the Company, signed by a duly authorized officer thereof,
designating the person or entity to whom any or all of the Trust Shares have
been sold, transferred, assigned or otherwise disposed of by the Company,
together with the Voting Trust Certificates issued by the Trustees in respect of
such Trust Shares, the Trustees immediately shall deliver the certificates
representing the Trust Shares to be sold, endorsed in blank, to CORT or its
transfer agent, as applicable, for registration of transfer to the person or
entity therein named, all of the Trustees' right, title and interest in such
number of the Trust Shares as may be specified in such direction. If such
direction shall specify all the Trust Shares, the Trust shall cease and come to
an end upon transfer of the Trustees' right, title and interest in the Trust
Shares. If such direction is as to only a portion of the Trust Shares, then this
Trust shall cease to that portion of the Trust Shares upon such transfer, but
shall remain in full force and effect as to the remaining portion of the Trust
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Shares and the Trustees shall deliver to the Company new Voting Trust
Certificates representing such shares.
SECTION 1.10 Termination.
(a) This Agreement and the Trust shall terminate upon the earlier of
(each, a "Trust Termination Event"): (i) the sale, transfer, assignment or other
disposition of all the Trust Shares as contemplated by Section 1.09; (ii) upon
notice to the Trustees of the Company's election to convert the Trust Shares
into CORT's non-voting Class B Common Stock, par value $.01 per share, or such
other shares as may be permitted pursuant to CORT's certificate of
incorporation; or (iii) upon the consummation of the transactions contemplated
by the Agreement and Plan of Merger dated as of March 25, 1999, as amended as of
July 26, 1999, by and among CORT, CBF Holding LLC and CBF Mergerco, Inc., as the
same may be amended, supplemented or modified after the date hereof.
(b) Upon termination of this Agreement, the Trustees shall
deliver to the Company the stock certificates evidencing the Trust Shares, duly
endorsed or accompanied by stock powers duly executed, in proper form for
transfer to the Company, together with all other property held by the Trustees
pursuant to this Agreement and shall take all other actions appropriate to
effectuate the transfer of the Trust Shares to the Company.
ARTICLE II
THE TRUSTEES
SECTION 2.01 Actions of the Trustees. Any act by a majority of the
Trustees shall be an act of the Trustees.
SECTION 2.02 Trustees' Expenses. The Trustees shall be entitled to
reimbursement of all reasonable fees and expenses of counsel, taxes and other
expenses reasonably incurred by the Trustees in the performance of their duties
under this Agreement, which reimbursement shall be made promptly by the Company
after the incurrence of such expenses.
SECTION 2.03 Delegation of Trustees' Duties. The Trustees may at any
time or from time to time appoint an agent or agents and may delegate to such
agent or agents the performance of any administrative duty of the Trustees under
this Agreement.
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SECTION 2.04 Standard of Care; Indemnification of Trustees.
(a) The duties and responsibilities of the Trustees shall be
limited to those expressly set forth in this Agreement. The Trustees shall not
be answerable for the default or misconduct of any agent or attorney appointed
by them in accordance with this Agreement if such agent or attorney shall have
been selected with reasonable care.
(b) The Trustees are expressly authorized to incur and pay all
reasonable charges and other expenses which the Trustees deem necessary and
proper in the performance of their duties under this Agreement. The Company
hereby agrees to indemnify the Trustees against all claims, costs of defense of
claims (including reasonable attorneys' fees and disbursements), expenses and
liabilities incurred by the Trustees in connection with the performance of their
duties under this Agreement, except those incurred as a result of the Trustees'
gross negligence, bad faith or willful misconduct.
(c) The Trustees shall be free from liability in acting upon
any paper, document or signature believed by the Trustees to be genuine and to
have been signed by the proper party. The Trustees shall not be liable for any
error of judgment in any act done or omitted, nor for any mistake of fact or
law, nor for anything which the Trustees may do or refrain from doing in good
faith. The Trustees may consult with legal counsel and any action under this
Agreement taken or suffered in good faith by the Trustees and in accordance with
the opinion of the Trustees' counsel shall be conclusive for the parties to this
Agreement and the Trustees shall be fully protected and be subject to no
liability in respect thereof.
SECTION 2.05 Resignation and Replacement of Trustees.
(a) Any of the Trustees may resign by giving 30 days' advance
written notice of resignation to the Company.
(b) The rights and duties of each Trustee under this Agreement
shall terminate upon such Trustee's incapacity to act, death or insolvency, and
no interest in any of the Trust Shares held by such Trustee nor any of the
rights and duties of a deceased or insolvent Trustee may be transferred by will,
devise, succession or in any other manner except as provided in this Agreement.
The heirs, administrators, executors or other representatives of an
incapacitated, deceased or insolvent Trustee shall, however, have the right and
duty to convey any Trust Shares held by such Trustee to one or more successor
Trustees.
(c) In the event of the resignation, incapacity to act, death
or insolvency of a Trustee, such Trustee shall be succeeded by a successor
Trustee chosen by the Company, upon such successor Trustee's becoming a party to
this Agreement. No such successor Trustee shall be an affiliate or associate (as
defined in Rule 12 b-2 under the Exchange Act) of the Company.
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SECTION 2.06 Disclosure of Information. To the extent requested to
do so by the Company, the Trustees shall promptly furnish to the Company full
information with respect to (a) all property theretofore delivered to them as
Trustees, (b) all property then held by them as Trustees, and (c) all actions
theretofore taken by them as Trustees.
ARTICLE III
MISCELLANEOUS
SECTION 3.01 Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, with respect to the subject matter hereof. This Agreement shall not be
amended, altered or modified except by an instrument in writing duly executed by
each of the parties hereto.
SECTION 3.02 Severability. 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 so long as the economic or legal
substance of this Agreement is not affected in any manner adverse to any party.
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 in a mutually acceptable manner in order that the terms of
this Agreement remain as originally contemplated to the fullest extent possible.
SECTION 3.03 Notices. All notices and other communications under
this Agreement shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telecopy or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
3.03):
If to the Company:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx
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with a copy (which shall not constitute notice) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X Xxxxx, Esq.
If to the Trustees:
c/o Bruckmann, Xxxxxx, Xxxxxxxx & Co., Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
SECTION 3.04 Assignment. Subject to Section 2.05, this Agreement
shall not be assignable by the Trustees. This Agreement shall be assignable by
the Company to any affiliate thereof.
SECTION 3.05 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective permitted successors and permitted assigns.
SECTION 3.06 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 3.07 Specific Performance. The parties hereto agree that
the remedy at law for a breach of this Agreement will be inadequate and that any
party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any appropriate relief or remedy.
SECTION 3.08 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that State.
SECTION 3.09 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Voting
Trust Agreement or caused this Voting Trust Agreement to be duly executed on
their behalf as of the date and year first hereinabove set forth.
CITICORP VENTURE CAPITAL LTD.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
THE TRUSTEES
/s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
