Voting Trust Agreement

EXECUTION COPY


VOTING TRUST AGREEMENT


VOTING TRUST AGREEMENT (this "AGREEMENT"), dated as of July 10, 2000, by and among Waxman USA Inc., a Delaware corporation ("STOCKHOLDER"), Wilmar Industries, Inc., a New Jersey corporation ("WILMAR"), BW Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of Wilmar ("BW ACQUISITION" and, together with Wilmar, "PURCHASER"), American Stock Transfer & Trust Company (the "VOTING TRUSTEE"), and Barnett Inc., a Delaware corporation (the "COMPANY").


W I T N E S S E T H:


WHEREAS, concurrently herewith, Purchaser and Company are entering into an Agreement and Plan of Merger of even date herewith (the "MERGER AGREEMENT"), pursuant to which Purchaser will acquire all of the outstanding shares of common stock, $0.01 par value per share, of Company (the "COMMON STOCK"), for the Merger Consideration, as defined in the Merger Agreement in effect on the date hereof, pursuant to a merger of the Purchaser with and into Company (the "MERGER");


WHEREAS, the Stockholder owns, beneficially and of record, as of the date hereof, 7,186,530 shares of Common Stock (the "EXISTING SHARES" and, together with any shares of Common Stock acquired after the date hereof and prior to the termination hereof, hereinafter collectively referred to as the "SHARES"), of which 1,000,000 Existing Shares are pledged (the "PLEDGED SHARES") to Congress Financial Corporation ("CONGRESS") as collateral security for the Stockholder's obligations to Congress pursuant to that certain Loan and Security Agreement, dated as of June 17, 1999 and amended as of December 8, 1999, March 29, 2000, May 1, 2000 and July 9, 2000, by and among Congress, Waxman Consumer Products Group, Inc., WOC Inc., Western American Manufacturing Inc., WAMI Sales, Inc., Stockholder, Waxman Industries, Inc., a Delaware corporation ("WAXMAN"), and TWI, International, Inc. (the "CONGRESS CREDIT FACILITY");


WHEREAS, as a condition to its willingness to enter into the Merger Agreement, and in reliance upon Stockholder's representations, warranties, covenants and agreements hereunder, Purchaser has required that Stockholder agree, and Stockholder has agreed, to enter into a Stockholder Agreement (the "STOCKHOLDER AGREEMENT") dated today's date, and this Agreement; and


WHEREAS, this Agreement is being entered into concurrently with the execution of the Merger Agreement and the Stockholder Agreement, and capitalized terms used and not defined herein have the respective meanings ascribed to them in the Merger Agreement.


NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for such other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:


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1. DEPOSIT INTO VOTING TRUST ARRANGEMENT; AND ACKNOWLEDGMENT OF
RECEIPT.


Within one (1) business day of the date hereof, Stockholder shall deliver to the Voting Trustee the certificates representing all of the Existing Shares, other than the Pledged Shares, together with five duly executed stock powers, endorsed in blank, with signature guaranteed by a member of the medallion guaranty program (the "STOCK POWERS" and, collectively with the Existing Shares (other than the Pledged Shares) and any other Shares which it may hereunder receive from the Stockholder pursuant to the Stockholder Agreement being collectively, the "VOTING TRUST"). The Stockholder and the Voting Trustee shall take such action as is necessary to effect the transfer of such shares of Common Stock to, and in the name of, the Voting Trustee on the books of the Company, including the immediate filing of a duplicate of this Agreement with the secretary of the Company. After the filing of this Agreement in the registered office of the Company pursuant to Section 10, certificates for the Common Stock transferred and delivered to the Voting Trustee pursuant to this Agreement shall be issued to and held by the Voting Trustee in the name of American Stock Transfer & Trust Company, as Voting Trustee (such shares of Common Stock being referred to herein as the "VOTING TRUST STOCK"). The Voting Trustee accepts the trust created hereby and upon receipt by the Voting Trustee of the certificates for and upon the transfer of such shares of Common Stock into the name of the Voting Trustee, the Voting Trustee shall hold the Voting Trust Stock, as stockholder of record, in each case subject to the terms and conditions of this Agreement. The Voting Trustee acknowledges receipt of copies of the Merger Agreement and the Stockholder Agreement.


2. STOCK CERTIFICATES.


On all certificates representing Voting Trust Stock, as well as in the stock ledger of the Company, the following legend shall conspicuously appear:


"The shares of Common Stock evidenced by this stock
certificate are subject to certain restrictions contained in
(i) the Voting Trust Agreement dated as of July 10, 2000 (as
it may hereafter be amended or otherwise modified from time
to time, the "Agreement"), by and among Waxman USA, Inc., as
Voting Trustee, Wilmar Industries, Inc. ("WILMAR"), BW
Acquisition, Inc. ("BW ACQUISITION" and, together with
Wilmar, the "PURCHASER") and Barnett Inc. (the "COMPANY")
and (ii) the Certificate of Incorporation and By-laws of the
Company, each as may be amended from time to time. The
holder of this stock certificate, by his acceptance hereof,
agrees to be bound by all the provisions of such agreements
and instruments, which agreements and instruments are
available for inspection by the owner hereof at the
registered office of the Company in the State of Delaware.


The shares represented by this stock certificate have not
been registered under the Securities Act of 1933. The shares
have been acquired for investment and may not be sold,
transferred or assigned in the absence of an effective
registration statement for these shares under the Securities
Act of 1933 or an opinion of the 3
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Company's counsel that registration is not required under
said Act."


3. ISSUANCE OF VOTING TRUST CERTIFICATES.


Promptly after the creation of the Voting Trust hereunder, the Voting Trustee shall issue to the Stockholder, in exchange for the Voting Trust Stock delivered hereunder, a Voting Trust Certificate substantially in the form annexed as Exhibit A hereto (the "VOTING TRUST CERTIFICATE"). Except as otherwise expressly provided herein, all options, rights of purchase and other rights, powers and privileges affecting or relating to the Voting Trust Stock, shall attach to the Voting Trust Certificate.


4. VOTING OF THE VOTING TRUST STOCK.


The Voting Trustee shall have the right to exercise, in person or by its nominees or proxies, all rights and powers to vote the shares of the Voting Trust Stock deposited hereunder and to take part in or give consent with respect to any lawful corporate action with respect to which such shares are able or required to be voted as follows: The Voting Trustee shall vote the Shares of the Voting Trust Stock: (a) in favor of the Merger; (b) against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of Company under the Merger Agreement; and (c) against any action or agreement that would impede, interfere with, delay, postpone or attempt to discourage the Merger including, but not limited to, (i) any extraordinary corporate transaction (other than the Merger), such as a merger, other business combination, reorganization, consolidation, recapitalization, dissolution or liquidation involving Company (a "BUSINESS COMBINATION TRANSACTION"), (ii) a sale or transfer of a material amount of assets of Company or any of its subsidiaries, (iii) any change in the management or board of directors of Company, except as otherwise agreed to in writing by Purchaser, (iv) any change in the present capitalization of the Company, or (v) any other change in the corporate structure (including the charter, by-laws or other organizational or constitutive documents) or business of the Company. Voting Trustee agrees, without limiting the foregoing, that it shall consult with Purchaser prior to any such vote and vote the Shares of the Voting Trust Stock in such manner as is determined by Purchaser to be in compliance with the provisions of this Section 4. With respect to all other matters not specified in the foregoing sentence herein, Voting Trustee shall vote the Shares represented by any Voting Trust Certificate in accordance with the written instructions of the registered holder thereof.


5. RECORD OF BENEFICIAL OWNERS; RESTRICTION ON TRANSFER.


(a) The Voting Trustee shall keep a record on its books of the name of each holder of a Voting Trust Certificate and the number of shares of Voting Trust Stock beneficially owned by each holder.


(b) No holder of a Voting Trust Certificate shall transfer its Voting Trust Certificate or the beneficial ownership of any Voting Trust Stock represented by such Voting Trust Certificate without the written consent of Purchaser.


(c) The transfer of a Voting Trust Certificate may be registered only upon the books of the Voting Trustee kept for the registration and registration of transfer of


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Voting Trust Certificates upon surrender thereof to the Voting Trustee together with transfer instructions duly executed by the registered owner having such signature guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company, in such form as shall be reasonably satisfactory to the Voting Trustee. Upon any such registration of transfer the Voting Trustee shall execute and deliver in exchange for such Voting Trust Certificate a new registered Voting Trust Certificate, registered in the name of the transferee.


(d) If any mutilated Voting Trust Certificate is surrendered to the Voting Trustee, or the Voting Trustee receives evidence to its satisfaction that any Voting Trust Certificate has been destroyed, lost or stolen, and upon proof of ownership satisfactory to the Voting Trustee together with such security or indemnity as may be requested by the Voting Trustee to save it harmless, the Voting Trustee shall execute and deliver a new Voting Trust Certificate for the same number of shares of Voting Trust Stock as the Voting Trust Certificate so mutilated, destroyed, lost or stolen, with such notations, if any, as the Voting Trustee shall determine.


(e) Prior to due presentment of a Voting Trust Certificate for transfer and compliance with the requirements of this Section 5, the Voting Trustee may, except as otherwise required by law, treat the registered holder of any Voting Trust Certificate as the owner thereof for all purposes whatsoever and shall not be affected by any notice to the contrary.


(f) The Voting Trustee shall not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, the shares of Voting Trust Stock or (ii) create or suffer to exist any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement (a "LIEN") upon or with respect to any of the Voting Trust Stock except for the Lien created by this Agreement.


6. DISBURSEMENT OF SHARES.


6.1. COMPANY'S COMMITMENT TO PURCHASE SHARES.


(a) Five business days after receipt by Voting Trustee of a certification from the Company that it has purchased certain shares of Common Stock pursuant to that certain agreement, dated as of the date hereof, by and between the Stockholder and the Company (the "BARNETT AGREEMENT"), such certification to be in substantially the form of Exhibit B hereto (the "STANDBY CLOSING NOTICE") no later than 5:00 p.m. New York City time on September 1, 2000, Voting Trustee shall immediately complete a Stock Power in favor of the Company for the Purchase Shares, as determined in accordance with the Barnett Agreement, date it the same date it received the Standby Closing Notice, and deliver it, together with certificates representing the Purchase Shares, to Company. If Voting Trustee does not have certificates representing the exact number of Purchase Shares, it shall deliver to Company certificates representing more than the Purchase Shares, together with instructions to the Company's transfer agent (the "T ...