VOTING TRUST AGREEMENT
Relating to Shares of
EDISON SCHOOLS INC.
THIS VOTING TRUST AGREEMENT (the "Agreement") is made and entered
into as of November 16, 1999, by and among Sprout Capital VI, L.P.,
Sprout Capital VII L.P., The Sprout CEO Fund, L.P., DLJ Capital
Corporation, Donaldson, Lufkin & Jenrette, Inc. and Norwest Bank
Indiana, N.A., as trustee (the "Trustee").
WHEREAS, the parties hereto desire to record their arrangements
with respect to shares of Class A Common Stock, par value $.01 per share
("Class A Common Stock") and Class B Common Stock. par value $.01 per
share ("Class B Common Stock" and, together with Class A Common Stock,
"Common Stock"), of Edison Schools Inc., a Delaware corporation whose
principal offices are located at 521 Fifth Avenue, 15th Floor, New York,
New York 10175 (the "Corporation").
NOW, THEREFORE, the parties hereto agree as follows
1. CERTAIN DEFINITIONS. In this Agreement:
(a) "Control Affiliate" means DLJ or any person or entity
controlling, controlled by or under common control with, directly or
(b) "DLJ" means Donaldson, Lufkin & Jenrette, Inc., a
Delaware corporation, and its successors.
(c) "DLJSC" means Donaldson. Lufkin & Jenrette Securities
Corporation, a Delaware corporation, and its successors.
(d) "DLJ" Affiliate" means any person or entity who is a
Control Affiliate, Employee Affiliate or Other Affiliate.
(e) "DLJCC" means DLJ Capital Corporation, a Delaware
corporation, wholly owned by DLJ.
(f) "Employee Affiliate" means any person who is a
director of or employed by (or who is the spouse, relative or relative
of a spouse, in each case residing in the home of a person employed by)
a Control Affiliate.
(g) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(h) "Holder" means from time to time, any person or entity
for which Shares are held hereunder by the Trustee.
(i) "Majority Holders" means from time to time, Holders of
Trust Certificates representing at least 50% of the Shares then
(j) "Other Affiliate" means any person or entity which has
a substantial business relationship with a Control Affiliate.
(k) "Securities Act" means the means the Securities Act of
1933, as amended.
(l) "Share Equivalents" means to the extent applicable,
and unless the context otherwise requires, all securities convertible
into, exchangeable for, or carrying the right to acquire, voting capital
stock (of any class) of the Corporation or subscriptions, warrants,
options, rights or other arrangements obligating the Corporation to
issue or dispose of any of its shares of the voting capital stock (of
any class) or any ownership interest therein.
(m) "Shares" means (i) all shares of the voting capital
stock (of any class) of the Corporation and (ii) Share Equivalents.
(n) "Sprout VI" means Sprout Capital VI, L.P.
(o) "Sprout VII" means Sprout Capital VII, L.P.
(p) "Sprout CEO Fund" means The Sprout CEO Fund, L.P.
(a) Sprout VI, Sprout VII, Sprout CEO Fund and DLJCC
hereby assign and deliver or have caused to be assigned and delivered to
the Trustee to be held pursuant to this Agreement an aggregate of
2,472,063 Shares, in the amounts set forth on Schedule A hereto (the
"initial deposit") and, subject to the provisions of Section 2(b) below,
DLJ shall assign and deliver or cause to be assigned and delivered to
the Trustee all Shares owned by any DLJ Affiliate or acquired by any DLJ
Affiliate at any time in excess of five percent (5%) in the aggregate of
the total number of shares of the voting capital stock (of any class) of
the Corporation outstanding. Each person for whom Shares are held from
time to time by the Trustee hereunder shall be a Holder and shall be
bound by all the provisions of this Agreement applicable to Holders.
(b) For purposes of determining for Section 2(a) only.
whether more than five percent (5%) in the aggregate of the total number
of shares of the voting capital stock (of any class) of the Corporation
at any time outstanding are owned by DLJ Affiliates, there shall be
excluded from the calculation of shares owned by DLJ Affiliates, and no
deposit of Shares shall be required hereunder as a consequence of any
(A) held by DLJSC or any other Control Affiliate
which is registered as a broker-dealer under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") if such Shares are held in
connection with its normal trading activities as a broker-dealer;
provided, however, that DLJ will cause DLJSC or such other Control
Affiliate to agree that it will not vote such Shares,
(B) held by DLJSC or any other Control Affiliate
which is a registered broker-dealer under the Exchange Act, if such
Shares are held in a syndicate or trading account and were acquired in
its capacity as an underwriter or placement agent whether in an offering
registered under the Securities Act of 1933, as amended (the "1933
Act"), or otherwise; provided, however, that DLJ will cause DLJSC or
such other Control Affiliate to agree that it will not vote such Shares,
(C) held by DLJCC for the account of any person or
entity other than a Control Affiliate or Employee Affiliate or in the
name of a customer account, which customer is a person or entity other
than a Control Affiliate or Employee Affiliate; provided, however, that
DLJCC may vote the Shares only when instructed by the beneficial owner
thereof or as otherwise permitted under the rules of all exchanges, if
any, on which the Shares are listed,
(D) held by an Employee Affiliate other than a
person holding the position of Senior Vice President or above (or
performing the comparable function) of DLJ or any of its subsidiaries or
held by an Other Affiliate, unless in either case a contract or other
arrangement (other than this Agreement) regarding the voting of such
Shares exists between such Employee Affiliate or Other Affiliate and any
Control Affiliate, or
(E) held by the Trustee pursuant to this Agreement.
3. TRANSFER ON BOOKS OF CORPORATION. The Trustee shall, to the
extent applicable, cause all Shares transferred to or deposited with it
in its capacity as Trustee hereunder to be transferred to it as Trustee
on the books of the Corporation and will issue and deliver to each
Holder a Voting Trust Certificate (a "Trust Certificate") for the number
of Shares so transferred to the Trustee.
4. FORM. Trust Certificates shall be in substantially the
following form (which such modifications as may be appropriate if the
applicable Trust Certificate represents rights or other arrangements
with respect to the voting stock defined as "Shares"):
"THE TRANSFER OF THIS VOTING TRUST CERTIFICATE IS
SUBJECT TO TERMS AND CONDITIONS SET FORTH IN THE
VOTING TRUST AGREEMENT DATED AS OF NOVEMBER 16,
1999, A COPY OF WHICH HAS BEEN FILED IN THE
REGISTERED OFFICE IN THE STATE OF DELAWARE OF