REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of September 30, 1996, by and among HA-LO
INDUSTRIES, INC., an Illinois corporation (together with its
permitted successors and assigns, the "Company"), and the persons
whose signatures appear on the execution pages of this Agreement
(the "Shareholders").
This Agreement is made pursuant to the Agreement and Plan of
Merger dated as of June 14, 1996 (the "Merger Agreement") by and
among the Company, HA-LO Acquisition Corporation, Inc., HA-LO
Acquisition Corporation of Canada, Ltd., Market U.S.A., Inc.,
▇▇▇▇▇▇ Marketing Inc., and the Shareholders, pursuant to which
the Shareholders will receive shares of Common Stock (as defined
below) of the Company.
The parties hereto, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
intending to be bound hereby, agree as follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have
the following meanings:
Advice: See Section 6 hereof.
Affiliate means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
person. For the purposes of this definition, "control" when used
with respect to any specified person means the power to direct
the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Business Day means any day that is not a Saturday, a Sunday
or a legal holiday on which banking institutions in the State of
Illinois are not required to be open.
Claims: See Section 8(a) hereof.
Closing Date means the date upon which the transactions
contemplated by the Merger Agreement are consummated.
Common Stock means the Common Stock, no par value, of the
Company, or any other shares of capital stock of the Company into
which such stock shall be reclassified or changed (by operation
of law or otherwise). If the Common Stock has been so
reclassified or changed, or if the Company pays a dividend or
makes a distribution on its Common Stock in shares of capital
stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of
Common Stock, a share of Common Stock shall be deemed to be such
number of shares of capital stock and amount of other securities
to which a holder of a share of Common Stock outstanding
immediately prior to such reclassification, exchange, dividend,
distribution, subdivision or combination would be entitled.
Cutback Registration means any registration in which the
managing underwriter advises the Company that marketing factors
require a limitation of the number of Registrable Shares to be
underwritten in such registration.
Delay Period: See Section 2(b) hereof.
Delay Notice: See Section 2(b) hereof.
Delaying Notice: See Section 3(d) hereof.
Demand Effectiveness Period: See Section 3(b) hereof.
Demand Request: See Section 3(a) hereof.
Effectiveness Period: See Section 2(b) hereof.
Exchange Act means the Securities Exchange Act of 1934, as
amended.
Merchant Agreement means that certain Registration Rights
Agreement dated as of January 11, 1995, as amended, between the
Company and Merchant Partners, L.P.
Notice of Demand Request: See Section 3(a) hereof.
person means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
Pooling Period means the period of time beginning on the
Closing Date and ending on the date that the date Company
publishes an earnings release meeting the requirements of APB
Opinion No. 16.
Prospectus means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed
as part of an effective Registration Statement in reliance upon
Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration
Statement and all other amendments and supplements to the
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prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
Registrable Shares means the shares of Common Stock issued
to the Shareholders pursuant to the Merger Agreement, until in
the case of any such share (i) it has been effectively registered
under Section 5 of the Securities Act and disposed of pursuant to
an effective Registration Statement under the Securities Act or
(ii) it has been transferred other than pursuant to Rule
"4(1-1/2)" (or any similar private transfer exemption) under the
Securities Act. Where specified herein, "Registrable Shares" may
also refer to the shares of Common Stock held by any other
person.
Registration Documents: See Section 8(a) hereof.
Registration Statement means any registration statement of
the Company that covers any of the Registrable Shares pursuant to
the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all
material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
Requested Registration means a registration demanded
pursuant to Section 3 for which the Registration Statement
relating thereto has been declared effective by the SEC and for
which no stop-order suspending the effectiveness of such
registration statement has been issued by the SEC within the
Demand Effectiveness Period which prevents the Shareholders from
completing the distribution of their Registrable Shares described
included in such Registration Statement.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Shelf Registration: See Section 2(a) hereof.
Shareholders: See the introductory clauses hereof.
underwritten registration or underwritten offering means a
registration in which securities of the Company are sold to or
through one or more underwriters, on a firm commitment basis, for
reoffering or sale to the public.
▇▇▇▇▇▇▇▇: See Section 3(a) hereof.
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SECTION 2. Required Shelf Registration.
(a) The Company shall file with, and shall cause to be
declared effective by, the SEC prior to times set forth below, a
Registration Statement under the Securities Act relating to the
following number of Registrable Shares, which Registration
Statement shall provide for the sale by the holders thereof of
the Registrable Shares included therein from time to time on a
delayed or continuous basis pursuant to Rule 415 under the
Securities Act, but need not provide for an underwritten
registration (each, a "Shelf Registration"):
(i) prior to the completion of the Pooling
Period, a whole number of shares of Common Stock equal to
(x) the quotient of $11 million divided by the average per
share price of Common Stock for the ten trading days prior
to the Closing Date if the Closing Date occurs on or before
August 31, 1996 or (y) the quotient of $15 million divided
by the average per share price of Common Stock for the ten
trading days prior to the Closing Date if the Closing Date
occurs after August 31, 1996 (it being understood, however,
that the Company shall not be required to request
acceleration of the effective date of such Registration
Statement until the completion of the Pooling Period);
(ii) prior to the first anniversary of the Closing
Date, a whole number of shares of Common Stock equal to the
product of (x) the number of shares of Common Stock then
held by the Shareholders which were acquired pursuant to the
Merger Agreement multiplied by (y) 50%; and
(iii) prior to the second anniversary of the
Closing Date, the remaining number of shares of Common Stock
acquired by the Shareholders pursuant to the Merger
Agreement which have not previously been sold or otherwise
disposed of.
(b) The Company agrees to use its best efforts to keep
each Registration Statement filed pursuant to this Section 2
continuously effective and usable for the resale of Registrable
Shares for a period ending on the earlier of (i) two years from
the date upon which such Registration Statement was declared
effective and (ii) the first date on which all the Registrable
Shares covered by such Shelf Registration have been sold pursuant
to such Registration Statement.
(c) Notwithstanding anything to the contrary contained
in this Agreement, the Company shall not be required to file a
Registration Statement or cause it to be declared effective at a
time (x) after completion of a fiscal year end, but prior to the
availability of the year end audited financial statements, (y)
when the Company, in the good faith judgement of its board of
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directors shall determine that any offering of Registrable Shares
would impede, delay or otherwise interfere with any pending or
contemplated acquisition involving the Company or (z) when the
Company is in possession of material information which, in the
good faith judgment of the Company's board of directors, if
disclosed in a Registration Statement, would be materially
harmful to the interests of the Company and its shareholders (any
such period in clauses (y) or (z) is referred to as a "Delay
Period"). A Delay Period shall commence on and include the date
that the Company gives written notice (such notice referred to
herein as the "Delay Notice") to the Shareholders that it is not
required to file a Registration Statement or cause it to be
declared effective pursuant to the provisions of this
Section 2(c) and shall end on the date when the Shareholders are
advised in writing by the Company that the current Delay Period
is over (it being understood that the Company shall give such
notice to all Shareholders promptly upon making the determination
that the Delay Period is over); provided; however, that the
Company shall not be entitled to Delay Periods having durations
that exceed 90 days in the aggregate during any calendar year.
Each Shareholder shall cease all disposition efforts with respect
to Registrable Shares held by them immediately upon receipt of a
Delay Notice.
(d) The two year time period for which the Company is
required to maintain the effectiveness of any Registration
Statement shall be extended by the aggregate number of days of
all Delay Periods and such two year period or the extension
thereof required by the preceding sentence is hereafter referred
to as the "Effectiveness Period."
(e) The Company may, in its sole discretion, include
other securities in such Shelf Registration (whether for the
account of the Company or otherwise, including without limitation
any securities of the Company held by security holders, if any,
who have piggyback registration rights with respect thereto) or
otherwise combine the offering of the Registrable Shares with any
offering of other securities of the Company (whether for the
account of the Company or otherwise).
SECTION 3. Requested Registration.
(a) If at any time prior to the satisfaction of the
Company's obligations to file and keep effective the Shelf
Registrations pursuant to Section 2(a) hereof, ▇▇▇ ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇") is no longer the Chairman of the Board of the
Company, Shareholders owning a majority of the Registrable
Shares, shall have the right to require the Company, by written
request (the "Demand Request"), to effect an underwritten
registration with respect to the Registrable Shares owned by such
Shareholders and their respective Affiliates. The Company will
give prompt written notice (the "Notice of Demand Request") of
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such demand for an underwritten registration to all Shareholders
and thereupon the Company shall, as expeditiously as reasonably
practicable, file a Registration Statement relating to the
registration under the Securities Act of (i) first, the
Registrable Shares which the Company has been so requested to
register by the demanding Shareholders and (ii) second, all other
Registrable Shares as to which Shareholders (other than the
demanding Shareholders) shall have made a written request to the
Company for registration thereof within 30 days after the Notice
of Demand Request, all to the extent necessary to permit the sale
or other disposition in an underwritten offering by such
Shareholders of the Registrable Shares to be so registered;
provided; however, that (i) if such registration is a Cutback
Registration, the Company shall register in such registration
(A) first, the Registrable Shares proposed to be sold by
Shareholders and (B) second, the Registrable Shares proposed to
be sold by each of ▇▇▇▇▇▇▇▇, his relatives and/or trust(s) for
the benefit thereof, and Merchant Partners, L.P. and its partners
holding Registrable Shares included in such Registration
Statement pursuant to the Merchant Agreement; and (ii) that the
Company shall not be obligated to take any action to effect any
such registration, qualification or compliance pursuant to this
Section 4(a) (A) of a number of Registrable Shares in excess of
the number of Registrable Shares for which the Company is then
required to effect Shelf Registrations pursuant to Section 2(a);
(B) within 90 days (or such other date as may be agreed between
the Company, the Shareholders, and the managing underwriter of an
underwritten offering of Registrable Shares) immediately
following the effective date of any Registration Statement
pertaining to such an underwritten offering; (C) if the
Shareholders have, within the past 270 days, caused a Requested
Registration; or (D) if the demanding Shareholders have requested
the registration of Registrable Shares in an aggregate price to
public of less than $7,500,000.
(b) The Company agrees to keep each Registration
Statement filed pursuant to this Section 3 continuously effective
and usable for the resale of Registrable Shares for a period of
up to 90 days or until all Registrable Shares included in such
Registration Statement have completed the distribution described
in the Registration Statement relating thereto, whichever first
occurs (the "Demand Effectiveness Period"), provided, however,
that during such 90-day period the Company may give notice to all
such Shareholders that the Registration Statement or the
prospectus included therein is no longer usable for offers and
sales of Registrable Shares, in which case the 90-day period will
be tolled until such time as each such Shareholder and the
managing underwriter of such underwritten offering either
receives copies of a supplemented or amended prospectus or is
advised in writing by the Company that use of the prospectus may
be resumed (it being understood that in such case the Company
shall promptly comply with its obligations under Section 6(a)).
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(c) The Company, if eligible to do so, shall file a
Registration Statement covering the Registrable Shares so
requested to be registered on Form S-2 or S-3 or any similar
short-form registration under the Securities Act as soon as
reasonably practicable after the receipt of the Demand Request;
provided, however, that if the managing underwriter of such
underwritten offering shall advise the Company in writing that,
in its opinion, the use of another form of Registration Statement
is of material importance to the success of such proposed
underwritten offering, then such underwritten registration shall
be effected on such other form.
(d) The Shareholders shall be entitled to three
Requested Registrations. Notwithstanding anything contained in
this Section 4, if (x) the SEC has issued a stop-order as a
result of actions taken by the demanding Shareholders or (y) the
demanding Shareholders give notice (the "Delaying Notice"), at
any time prior to the time the Registration Statement is declared
effective or prior to the last day of Demand Effectiveness
Period, that the demanding Shareholders desire the Company to
either withdraw the Registration Statement with the SEC, if the
Registration Statement has been filed with the SEC, or postpone
filing the Registration Statement, if the Registration Statement
has not been filed with the SEC and the Company is immediately
able to file the Registration Statement, then, in the case of
clause (x) herein, the issuance of the stop-order, or, in the
case of clause (y) herein, the Delaying Notice, shall reduce by
one the number of Requested Registrations to which the
Shareholders are entitled.
(e) A underwritten registration requested pursuant to
this Section 3 shall not be deemed to have been effected unless
the Registration Statement relating thereto and any post-
effective amendment required to commence the underwritten
offering contemplated thereby has been declared effective by the
SEC and maintained continuously effective for the Demand
Effectiveness Period.
(f) The demanding Shareholders shall enter into an
underwriting agreement relating to a firm commitment underwriting
in a form which is reasonably satisfactory to the demanding
Shareholders with the underwriter or underwriters selected for
such underwriting by the demanding Shareholders and which are
reasonably satisfactory to the Company. The Company shall enter
an underwriting agreement with a managing underwriter or
underwriters of an underwritten offering containing
representations, warranties, indemnities and agreements
customarily included (but not inconsistent with the agreements
contained herein) by an issuer of common stock in underwriting
agreements with respect to offerings of common stock for the
account of, or on behalf of, selling shareholders. The Company
may include securities for its own account or the account of any
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other person in such registration if the managing underwriter so
agrees and if so doing would not make such registration a Cutback
Registration.
SECTION 4. Piggyback Registration.
(a) If, at any time prior to the Company's
satisfaction of its obligations to file and keep effective the
Shelf Registrations pursuant to Section 2(a) or a Requested
Registration pursuant to Section 3(a) hereof, the Company
proposes to register under the Securities Act any shares of
Common Stock for its account or for the account of any other
person (other than a registration relating solely to employee
stock option or employee stock purchase plans or pursuant to Form
S-4 (or successor form) under the Securities Act), the Company
shall:
(i) promptly give to each Shareholder written
notice thereof (which written notice shall include a list of
jurisdictions in which the Company intends to attempt to
qualify such securities under or otherwise comply with the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under or other compliance with blue sky or
other state securities laws), and in any underwriting
involved therein, all the Registrable Shares specified in a
written request, made within 15 days from such written
notice from the Company, by any Shareholder; provided that
if such registration is a Cutback Registration, then (x) if
such registration is a primary registration on behalf of the
Company, the Company shall register in such registration (A)
first, the Company securities which the Company proposes to
sell in such registration, (B) second, the Registrable
Shares proposed to be sold by each of ▇▇▇▇▇▇▇▇, his
relatives and/or trust(s) for the benefit thereof, and
Merchant Partners, L.P. and it partners holding Registrable
Shares included in such Registration Statement pursuant to
the Merchant Agreement and (C) third, Registrable Shares
held by each Shareholder, on a pro rata basis, based upon
the number of Registrable Shares the Shareholders originally
sought to include in such registration; and (y) if such
registration is a secondary registration on behalf of a
holder of Company securities, the Company shall register in
such registration (A) first, the Registrable Shares proposed
to be sold by the holder thereof requesting such
registration, and (B) second, the Registrable Shares
proposed to be sold by each of ▇▇▇▇▇▇▇▇, his relatives
and/or trust(s) for the benefit thereof, and Merchant
Partners, L.P. and it partners holding Registrable Shares
included in such Registration Statement pursuant to the
Merchant Agreement and (C) third, Registrable Shares held by
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each Shareholder, on a pro rata basis, based upon the number
of Registrable Shares the Shareholders originally sought to
include in such registration.
(b) If the registration of which the Company gives
notice is pursuant to an effective Registration Statement under
the Securities Act, involving an underwriting, the Company shall
so advise the Shareholders as part of the written notice given
pursuant to subclause (a)(i) above. In such event, the right of
any Shareholder to registration pursuant to this Section shall be
conditioned upon the inclusion of the Registrable Shares held by
the Shareholder in the underwriting and the Shareholder entering
into an underwriting agreement, in a form reasonably acceptable
to the Company, with the underwriter or underwriters selected for
such underwriting by the Company.
SECTION 5. Hold-Back Agreements.
(a) Each holder of Registrable Shares agrees, if such
holder is reasonably requested by an underwriter in an
underwritten offering for the Company (whether for the account of
the Company or otherwise), not to effect any public sale or
distribution of any of the Company's equity securities, including
a sale pursuant to Rule 144 (except as part of such underwritten
registration), during the 10-day period prior to, and during the
90-day period beginning on, the closing date of such underwritten
offering.
(b) Subject to the satisfaction of its obligations
under the Merchant Agreement, the Company agrees, to the extent
not inconsistent with applicable law, and if and to the extent
requested by the managing underwriter of an underwritten
registration of Registrable Shares pursuant to Section 3 hereof,
not to effect any public sale or distribution of any of its
equity securities or of any security convertible into or
exchangeable or exercisable for any equity security of the
Company (other than any such sale or distribution for such
securities on Form S-4 or in connection with an employee stock
option or other benefit plan) during the 15 days prior to, and
for a period of 90 days (or such longer period as the
underwriters of such underwritten offering may reasonably
request) beginning on, the effective date of such Registration
Statement (except as part of such registration).
SECTION 6. Registration Procedures.
In connection with the registration obligations of the
Company pursuant to and in accordance with Sections 2, 3 and 4
hereof (and subject to the Company's rights under Sections 2, 3
and 4), the Company will use its best efforts to effect such
registration to permit the sale of such Registrable Shares in
accordance with the intended method or methods of disposition
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thereof, and pursuant thereto the Company shall as expeditiously
as possible:
(a) prepare and file with the SEC such amendments
(including post-effective amendments) to any Registration
Statement, and such supplements to any Prospectus, as may be
required by the rules, regulations or instructions applicable to
the Securities Act or the rules and regulations thereunder during
the applicable period in accordance with the intended methods of
disposition by the sellers thereof (other than pursuant to any
underwritten registration or underwritten offering, except in
accordance with Section 4) and cause any Prospectus as so
supplemented to be filed pursuant to Rule 424 under the
Securities Act;
(b) before filing with the SEC any such Registration
Statement or prospectus or any amendments or supplements thereto,
the Company shall furnish to counsel selected by the holders of a
majority of the Registrable Shares covered by such Registration
Statement and counsel for the underwriter, if any, in connection
therewith, drafts of all such documents proposed to be filed and
provide such counsel with a reasonable opportunity for review
thereof and comment thereon, such review to be conducted and such
comments to be delivered with reasonable promptness;
(c) notify the selling holders of Registrable Shares
promptly and (if requested by any such person) confirm such
notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to a
Registration Statement or related Prospectus or for additional
information regarding such holder, (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for
that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Shares
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such
Registration Statement, Prospectus or documents so that they will
not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) use its best reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement, or the lifting of any suspension of the
qualification or exemption from qualification of any of the
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Registrable Shares for sale in any jurisdiction in the United
States;
(e) if requested by the selling holders, furnish to
counsel for the selling holders of Registrable Shares, without
charge, one conformed copy of each Registration Statement as
declared effective by the SEC and of each post effective
amendment thereto, in each case including financial statements
and schedules and all exhibits and reports incorporated or deemed
to be incorporated therein by reference; and such number of
copies of the preliminary prospectus, each amended preliminary
prospectus, each final Prospectus and each post effective
amendment or supplement thereto, as the selling holders may
reasonably request in order to facilitate the disposition of the
Registrable Shares covered by each Registration Statement in
conformity with the requirements of the Securities Act;
(f) prior to any public offering of Registrable Shares
register or qualify such Registrable Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions in
the United States as any selling holder shall reasonably request
in writing; and do any and all other reasonable acts or things
necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of such Registrable Shares
covered by the Registration Statement; provided, however, that
the Company shall in no event be required to qualify generally to
do business as a foreign corporation or as a dealer in any
jurisdiction where it is not at the time so qualified or to
execute or file a general consent to service of process in any
such jurisdiction where it has not theretofore done so or to take
any action that would subject it to general service of process or
taxation in any such jurisdiction where it is not then subject;
(g) except during any Delay Period, upon the
occurrence of any event contemplated by paragraph 6(b)(ii) or
6(b)(v) above, prepare a supplement or post-effective amendment
to each Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Shares
being sold thereunder, such Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(h) cause all Registrable Shares covered by the
Registration Statement to be listed on each securities exchange
and included in the over-the-counter market, if any, on which
similar securities issued by the Company are then listed or
traded;
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(i) if requested by the managing underwriter or
underwriters of any registration or by the holders of a majority
of the Registrable Shares included in any Registration Statement,
subject to approval of counsel to the Company in its reasonable
judgement, promptly incorporate in a prospectus, supplement or
post-effective amendment to the Registration Statement such
information concerning underwriters and the plan of distribution
of the Registrable Shares as such managing underwriter or
underwriters or such holders reasonably shall furnish to the
Company in writing and request be included therein, including,
without limitation, with respect to the number of Registrable
Shares being sold by such holders to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and with respect to any other terms
of the underwritten offering of the Registrable Shares to be sold
in such offering; and make all required filings of such
prospectus, supplement or post-effective amendment as soon as
reasonably possible after being notified of the matters to be
incorporated in such prospectus, supplement or post-effective
amendment;
(j) make available for inspection by any seller of
Registrable Shares, any underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney, accountant or other agent retained by any such seller
or underwriter (in each case in a manner which minimizes
disruption of the Company's business), all financial and other
records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees,
attorneys and independent accountants to supply all information
in each case reasonably requested by any such sellers,
underwriters, attorneys, accountants or agents in connection with
such Registration Statement, subject to right of the Company to
limit access to any such information (i) to the extent that the
Company is restricted from providing such information pursuant to
any bona fide confidentiality agreement to which the Company or
any of its subsidiaries or Affiliates is a party and (ii) the
Company shall have delivered to each seller of the Registrable
Shares a certificate duly executed by the chief executive officer
of the Company stating that such information does not contain any
material information that has not been publicly disclosed and
which would be required to be disclosed in, or which would
materially affect any information required to be disclosed in,
such Registration Statement;
(k) use its best efforts to comply with all applicable
laws related to such Registration Statement and offering and sale
of securities and all applicable rules and regulations of
governmental authorities in connection therewith (including,
without limitation, the Securities Act and the Exchange Act, and
the rules and regulations promulgated by the SEC) and make
generally available to its security holders as soon as
practicable (but in any event not later than fifteen (15) months
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after the effectiveness of such Registration Statement) an
earnings statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act;
(l) deliver promptly to each Shareholder participating
in a registration copies of all correspondence between the SEC
and the Company, its counsel or auditors and all memoranda
relating to discussions with the SEC or its staff with respect to
the Registration Statement;
(m) provide a transfer agent and registrar for all
such Registrable Shares covered by such Registration Statement
not later than the effective date of such Registration Statement;
(n) with respect to an underwritten registration only,
obtain an opinion from the Company's counsel and "cold comfort"
letters from the Company's independent public accountants
(including one letter when such Registration Statement goes
effective and one at the closing) in customary form and covering
such matters of the type customarily covered by such opinions and
"cold comfort" letters;
(o) make any necessary arrangements with The
Depository Trust Company;
(p) cause unlegended stock certificates for the
Registrable Shares to be prepared and printed;
(q) make any necessary filings with the National
Association of Securities Dealers, Inc., or with respect to an
underwritten registration only, assist the underwriters to make
any necessary filings.
The Company may require each seller of Registrable
Shares as to which any registration is being effected to furnish
such information regarding the distribution of such Registrable
Shares and as to such seller as it may from time to time
reasonably request. If any such information with respect to any
seller is not furnished prior to the filing of the Registration
Statement, the Company may exclude such seller's Registrable
Shares from such Registration Statement.
Each holder of Registrable Shares agrees by acquisition
of such Registrable Shares that, upon receipt of any notice from
the Company of the happening of any event of the kind described
in Section 6(b)(ii), 6(b)(iii), 6(b)(iv) or 6(b)(v) hereof or
upon notice of the commencement of any Delay Period, such holder
shall forthwith discontinue disposition of such Registrable
Shares covered by such Registration Statement or Prospectus until
such holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 6(f) hereof, or until
it is advised in writing (the "Advice") by the Company that the
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use of the applicable Prospectus may be resumed, and has received
copies of any amended or supplemented Prospectus or any
additional or supplemental filings which are incorporated, or
deemed to be incorporated, by reference in such Prospectus and,
if requested by the Company, such holder shall deliver to the
Company (at the expense of the Company) all copies, other than
permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Shares at the time of
receipt of such request. Each holder of Registrable Shares
further agrees not to utilize any material other than the
applicable current Prospectus in connection with the offering of
Registrable Shares pursuant to this Agreement.
SECTION 7. Registration Expenses.
Whether or not any Registration Statement becomes effective,
the Company shall pay all costs, fees and expenses incident to
the Company's performance of or compliance with this Agreement
including, without limitation, (i) all registration and filing
fees, (ii) fees and expenses of compliance with securities or
Blue Sky laws, (iii) printing expenses (including, without
limitation, expenses of printing of prospectuses if the printing
of prospectuses is requested by the holders of a majority of the
Registrable Shares included in any Registration Statement), (iv)
fees and disbursements of counsel for the Company, (v) fees and
disbursements of all independent certified public accountants of
the Company and all other persons retained by the Company in
connection with the Registration Statement, (vi) to the extent an
underwritten registration is involved in accordance with the
terms of this Agreement, to the extent provided in the
underwriting agreement, all fees and expenses of underwriters in
connection therewith (excluding discounts and commissions) and
(vii) the reasonable fees and expenses, not to exceed $1,500, of
no more than one counsel for the holders (as a group) of the
Registrable Shares included in such registration.
Notwithstanding the foregoing, any discounts, commissions,
underwriting or advisory fees, brokers' fees or fees of similar
securities industry professional (including any "qualified
independent underwriter" retained for the purpose of Section 3 of
Schedule E of the By-laws of the National Association of
Securities Dealers, Inc.) relating to the distribution of the
Registrable Shares will be payable by such holder and the Company
will have no obligation to pay any such amounts.
SECTION 8. Indemnification.
(a) In connection with any Registration Statement
effected or to be effected pursuant to this Agreement, the
Company shall indemnify each holder of Registrable Shares
included in such Registration Statement and each person who
controls (within the meaning of Section 15 of the Securities Act)
such holder of Registrable Shares from and against all losses,
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claims, damages, liabilities or expenses, joint or several, or
actions in respect thereof ("Claims") to which each such
indemnified party may become subject, under the Securities Act or
otherwise, insofar as such Claims (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement or prospectus or any preliminary
prospectus or summary or final prospectus or any amendment or
supplement thereto or any document filed under a state securities
or blue sky law (collectively, "Registration Documents") or
insofar as such Claims arise out of or are based upon the
omission or alleged omission to state in any Registration
Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading;
provided that the Company shall not be liable in any such case to
the extent such Claim arises out of or is based upon an untrue
statement or alleged untrue statement of a material fact or
omission or alleged omission of a material fact made in any
Registration Document in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
such indemnified party specifically for use in the preparation of
such Registration Document.
(b) In connection with any Registration Statement
effected or to be effected pursuant to this Agreement, each
holder of Registrable Shares included in such Registration
Statement shall indemnify the Company, its directors, officers,
employees or agents, and each person who controls (within the
meaning of Section 15 of the Securities Act) the Company from and
against all Claims to which each such indemnified party may
become subject under the Securities Act or otherwise, insofar as
such Claims (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in any Registration Document, or
insofar as such Claims arise out of or are based upon the
omission or alleged omission to state in any Registration
Document a material fact required to be stated therein or
necessary to make the statements made therein not misleading;
provided, however, that such indemnification or reimbursement
shall be payable only if, and to the extent that, any such Claim
arises out of or is based upon an untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission of a material fact made in any Registration Document in
reliance upon and in conformity with written information
furnished to the Company by such holder of Registrable Shares
specifically for use in the preparation of such Registration
Document; provided further, however, that no holder of
Registrable Shares shall be liable under this Section 7(b) for
any amounts in excess of the dollar amount of the gross proceeds
to be received by such Holder from the sale of its Registrable
Shares pursuant to such registration.
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(c) Any person entitled to indemnification under
Section 8(a) or 8(b) above shall notify promptly the indemnifying
party in writing of the commencement of any Claim if a claim for
indemnification in respect thereof is to be made against an
indemnifying party pursuant to this Section 8, but the omission
of such notice shall not relieve the indemnifying party from any
liability which it may have to any indemnified party, except to
the extent that the indemnifying party has been materially
prejudiced by such failure to provide such notice. In case any
action is brought against the indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to
the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof with counsel satisfactory to the indemnified party; and,
after notice from the indemnifying party to the indemnified party
that it so chooses, the indemnifying party shall not be liable
for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that
(i) if the indemnifying party fails to take reasonable steps
necessary to defend diligently the Claim within twenty (20) days
after receiving notice from the indemnified party that the
indemnified party believes it has failed to do so; or (ii) if the
indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably
shall have concluded that there may be legal defenses available
to the indemnified party which are not available to the
indemnifying party; or (iii) if representation of both parties by
the same counsel is otherwise inappropriate under applicable
standards of professional conduct, the indemnified party shall
have the right to assume or continue its own defense as set forth
above (but with no more than one firm of counsel for all
indemnified parties in each jurisdiction, except to the extent
any party or parties reasonably shall have concluded that there
may be legal defenses available to such party or parties which
are not available to the other indemnified parties or to the
extent representation of all indemnified parties by the same
counsel is otherwise inappropriate under applicable standards of
professional conduct) and the indemnifying party shall be liable
for any reasonable expenses therefor; provided, that no
indemnifying party shall be subject to any liability for any
settlement of a Claim made without its consent (which may not be
unreasonably withheld). If the indemnifying party assumes the
defense of any Claim hereunder, such indemnifying party shall not
enter into any settlement without the consent of the indemnified
party if such settlement attributes liability to the indemnified
party (which consent may not be unreasonably withheld).
(d) If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless, an indemnified
party, then the indemnifying party shall contribute to the amount
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paid or payable by the indemnified party as a result of any Claim
in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party as well
as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among-other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree
that it would not be just and equitable if contributions pursuant
to this Section 8(d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this Section.
SECTION 9. Miscellaneous.
9.1 Termination. This Agreement and the obligations of the
Company hereunder shall terminate on the earliest of (i) the
first date on which no Registrable Shares remain outstanding, and
(ii) the close of business on the last day of the last
Effectiveness Period.
9.2 Rule 144. The Company hereby covenants that the
Company will file in a timely manner all reports required to be
filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the
Company is not required to file such reports, it will, upon the
request of any holder of Registrable Shares, make publicly
available other information so long as necessary to permit sales
under Rule 144 under the Securities Act), and it will take such
further action as any holder of Registrable Shares may reasonably
request, all to the extent required from time to time to enable
such holder to sell Registrable Shares without registration under
the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC.
9.3 Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless
the Company has obtained the written consent of holders
representing a majority of the Registrable Shares.
Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter which relates
exclusively to the rights of holders of Registrable Shares whose
securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of a
holder whose securities are not being sold pursuant to such
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Registration Statement may be given by holders of a majority of
the Registrable Shares being sold by such holders; provided,
however, that the provision of this sentence may not be amended,
modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
9.4 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in
writing and shall be deemed given: when delivered personally; one
Business Day after being deposited with a next-day air courier;
five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back if telexed and when
receipt is acknowledged, if telecopied, in each case to the
parties at the address specified for such party in the Merger
Agreement (or at such other address for a party as shall be
specified by like notice: provided that notices of a change of
address shall be effective only upon receipt thereof).
9.5 Successors and Assigns. This Agreement, other than the
provisions of Section 3, shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
9.6 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
9.7 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
9.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO THE PROVISIONS THEREOF
GOVERNING CONFLICT OF LAWS PRINCIPLES.
9.9 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
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9.10 Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and a complete
and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to
the Registrable Shares issued pursuant to the Merger Agreement.
This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
9.11 Calculation of Time Periods. Except as otherwise
indicated, all periods of time referred to herein shall include
all Saturdays, Sundays and holidays; provided, that if the date
to perform the act or give any notice with respect to this
Agreement shall fall on a day other than a Business Day, such act
or notice may be timely performed or given if performed or given
on the next succeeding Business Day.
9.12 Existing Registration Rights; No Inconsistent
Agreements. The Company represents and warrants that there are
not existing agreements with respect to its securities which are
inconsistent with the rights granted to the holders of
Registrable Shares in this Agreement or otherwise conflict with
the provisions hereof and agrees that it will not enter into any
agreements which are inconsistent with or limit or impair the
rights granted to the holders of Registrable Shares prior to the
termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE COMPANY:
HA-LO INDUSTRIES, INC., an Illinois
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Vice President
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SHAREHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Number of Shares: 771,361
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Number of Shares: 254,984
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Family Trust
u/a/d May 14, 1996
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Co-Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Co-Trustee
Number of Shares: 248,625
The ▇▇▇▇ ▇. ▇▇▇▇▇ Family Trust
u/a/d May 14, 1996
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Co-Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Co-Trustee
Number of Shares: 363,375
The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Family Trust
u/a/d May 14, 1996
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Co-Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Co-Trustee
Number of Shares: 401,625
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Merchant Partners, Limited Partnership
By: Merchant Advisors, Limited
Partnership,
general partner
By: Merchant Development Corp.,
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. Bank
President
Number of Shares: 509,980
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/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
Number of Shares: 25
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Number of Shares: 25
182643_01
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