STOCKHOLDER'S AGREEMENT
STOCKHOLDER'S AGREEMENT (this "Agreement"), dated as of January 17, 2000,
between the undersigned stockholder ("Stockholder") of Starbelly.com, Inc., a
Delaware corporation f/k/a TheZebra.com, Inc. (the "Company"), and HA-LO
Industries, Inc., an Illinois corporation ("Acquiror").
WHEREAS, concurrently with the execution of this Agreement, the Company,
Acquiror and HA-LO Industries, Inc., a Delaware corporation and wholly owned
subsidiary of Acquiror ("Acquiror Sub"), have entered into an Agreement and Plan
of Merger and Plan of Reorganization (the "Merger Agreement"), providing for the
merger (the "Merger") of the Company with and into Acquiror Sub pursuant to the
terms and conditions of the Merger Agreement;
WHEREAS, upon consummation of the Merger, the stockholders of the Company
(the "Stockholders") will receive a number of shares of Common Stock, no par
value, of Acquiror and/or a number of shares of Series A Convertible Preferred
Stock, no par value, of Acquiror (collectively, "Acquiror Stock") for each share
of capital stock of the Company owned by them;
WHEREAS, Stockholder owns of record and beneficially shares of capital
stock of the Company as set forth on Schedule I hereto (the "Shares"); and
WHEREAS, in order to induce Acquiror to enter into the Merger Agreement,
Stockholder has agreed, upon the terms and subject to the conditions set forth
herein, to vote the Shares and to deliver an irrevocable proxy to Acquiror to
vote the Shares at a meeting of the Company's stockholders, in favor of approval
and adoption of the Merger Agreement and the Merger.
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms. All of the capitalized terms used herein but not
otherwise defined shall have the meanings specified in the Merger Agreement.
2. Agreement to Vote Shares.
(a) Stockholder agrees that during the period from the date hereof
until the earlier of the Effective Time of the Merger and the termination
of the Merger Agreement in accordance with its terms, Stockholder shall
vote the Shares, in person or by proxy, at every meeting of the
stockholders of the Company at which such matters are considered and at
every adjournment thereof or by written consent in lieu of such meeting
(i) in favor of the Merger, the adoption by the Company of the Merger
Agreement and the approval of the other transactions contemplated by the
Merger Agreement, (ii) against any merger agreement or merger (other than
the Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any other Competing
Transaction (as defined in the Merger Agreement ) (collectively,
"Alternative Transactions") or (iii) against any amendment of the
Company's Articles of Incorporation of By-laws or
other proposal or transaction involving the Company or any of its
subsidiaries, which amendment or other proposal or transaction would in
any manner impede, frustrate, prevent or nullify the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger
Agreement (collectively, "Frustrating Transactions"). Stockholder has
delivered to Acquiror on the date hereof a proxy substantially in the form
attached hereto as Annex A (the "Proxy"), which Proxy is irrevocable from
the date hereof until the earlier of the Effective Time of the Merger and
the termination of the Merger Agreement in accordance with its terms to
the extent permitted under Delaware Law, and Acquiror agrees to vote the
Shares subject to such Proxy (A) in favor of the Merger, the adoption by
the Company of the Merger Agreement and the approval of the other
transactions contemplated by the Merger Agreement, (B) against any
Alternative Transaction, or (C) against any Frustrating Transaction.
(b) If, at any time prior to the expiration of this Agreement,
Stockholder, or a representative of Stockholder, is a member of the Board
of Directors of the Company or an officer of the Company, subject to the
Merger Agreement, nothing in this Agreement shall limit or restrict such
director or officer from acting in his capacity and exercising his
fiduciary duties and responsibilities as a director or officer of the
Company, as the case may be. It is understood that this Agreement shall
apply to Stockholder solely in its capacity as a stockholder of the
Company and shall not apply to the director's or officer's actions,
judgments or decisions as a director or officer of the Company.
3. No Voting Trusts. Stockholder agrees that during the period from the
date hereof until the earlier of the Effective Time of the Merger and the
termination of the Merger Agreement, he or it will not, directly or indirectly,
and will not cause or permit any entity or person under Stockholder's control
to, deposit any of the Shares in a voting trust or subject any of its Shares to
or otherwise enter into any arrangement (written or oral) with respect to the
voting of the Shares inconsistent with this Agreement.
4. Limitation on Dispositions and Proxies. During the period from the date
hereof until the earlier of the Effective Time of the Merger and the termination
of the Merger Agreement in accordance with its terms, Stockholder agrees not to
sell, assign, pledge, transfer or otherwise dispose of, or grant any proxies
with respect to any of the Shares (except for the Proxy or a proxy which is not
inconsistent with the terms of this Agreement, the Proxy or a sale, transfer or
other disposition to a party to hold the Shares subject to the terms of this
Agreement and any other agreement entered into pursuant to the Merger Agreement
and to which the Shares are subject) or take any other action that would in any
way restrict, limit or interfere with the performance of its obligations
hereunder or the transactions contemplated hereby.
5. Specific Performance. Each party acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with the obligations imposed by this Agreement, and that, in the
event of any such failure, the other party will not have an adequate remedy at
law or in damages. Accordingly, each party hereto agrees that injunctive relief
or other equitable remedy, in addition to remedies at law or damages (including
without limitation pursuant to Section 9), is the appropriate remedy for any
such failure and will not oppose the granting of such relief on the basis that
the other party has an
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adequate remedy at law. Each party hereto agrees that it will not seek, and
agrees to waive any requirement for, the securing or posting of a bond in
connection with any other party's seeking or obtaining such equitable relief.
6. Status of Stockholders. Stockholder represents to the Buyer that it is
either an officer, director or holder of 5% or more of the outstanding voting
securities of the Company or an Affiliate of an officer, director or holder of
5% or more of the outstanding voting securities of the Company.
7. Taking Necessary Action; Further Action. Stockholder agrees that during
the period from the date hereof until the earlier of the Effective Time of the
Merger and the termination of the Merger Agreement in accordance with its terms,
he or it shall each use reasonable efforts to take all actions as may be
reasonably necessary or appropriate to effectuate the Merger as soon as possible
consistent with the terms of this Agreement and the Merger Agreement, including
(a) actions of Stockholder in his or its capacity as a stockholder of the
Company, and (b) making any required filings under (including with respect to
the acquisition by any Stockholder of shares of Acquiror Stock in the Merger),
and providing each other with information with respect to filings required
under, the HSR Act.
8. Investment Representations. Shares of Acquiror Stock are being issued
by Acquiror to Stockholder in connection with the Merger in reliance upon the
following representations, warranties and agreements of Stockholder, each of
which shall be true and correct as of the date hereof and at the Effective Time,
and each of which shall survive the Effective Time.
(a) Stockholder acknowledges that shares of Acquiror Stock issued
and issuable to him or it at the Effective Time of the Merger will not
have been registered under the Securities Act or under applicable state
securities laws.
(b) All shares of Acquiror Stock delivered or deliverable to
Stockholder in the Merger are being acquired by Stockholder solely for
investment purposes and for the account of Stockholder, and not as a
nominee or agent for others or with a view to or for sale in connection
with any distribution, and Stockholder has no present intention of selling
or otherwise distributing such shares of Acquiror Stock and has not
entered into any arrangement or understanding with respect thereto, except
in each case in accordance with the terms of this Agreement, pursuant to
the Registration Rights Agreement or otherwise in compliance with
applicable securities laws.
(c) The Stockholder acknowledges that his or its shares of Acquiror
Stock must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available. The
Stockholder agrees that he or it shall not make a disposition of any
shares of Acquiror Stock issued to him or it in the Merger unless such
shares have been registered under the Securities Act, including without
limitation in accordance with a Registration Rights Agreement with
Acquiror, or are sold in accordance with an exemption from registration
under Rule 144 or 144A under the Securities Act, or unless an exemption
from the registration requirements of the Securities Act and applicable
state securities laws (other than under Rule 144 or 144A) is available and
Acquiror shall have received an opinion of counsel reasonably satisfactory
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to Acquiror to the effect that such exemption from the registration
requirements of the Securities Act is valid and available.
(d) Stockholder acknowledges that his or its investment in shares of
Acquiror Stock is a speculative investment and is subject to significant
risks, including the risks described in Acquiror's Registration Statement
on Form S-3 dated December 10, 1999. The foregoing representation shall
not limit any rights or remedies Stockholder may have under the Merger
Agreement or otherwise in connection with the Merger. Stockholder
represents and warrants to Acquiror that he or it is able to fend for
himself or itself in the transactions contemplated by this Agreement, has
such knowledge and expertise in financial and business matters as to be
capable of evaluating the merits and risks of his or its investment and
has the ability to bear the economic risks (including the risk of loss) of
his or its investment.
(e) The Stockholder is an "Accredited Investor" as defined in Rule
501 to Regulation D promulgated under the Securities Act inasmuch as he or
it is:
(i) A director or executive officer of Acquiror;
(ii) A natural person whose individual net worth, or joint net
worth with his or her spouse, is currently over $1,000,000;
(iii) A natural person who had, or will have had, an
individual income in excess of $200,000 in each of the two
most recent years (1999 and 1998) or joint income with his or
her spouse was in excess of $300,000 in each of those years
(1999 and 1998) and has a reasonable expectation of reaching
the same income level in the current year (2000);
(iv) A broker or dealer registered pursuant to Section 15 of
the Exchange Act;
(v) A bank (as defined in Section 3(a)(2) of the Securities
Act), or a savings and loan association or other institution
(as defined in Section 3(a)(5)(A) of the Securities Act
whether acting in its individual or fiduciary capacity; a
broker or dealer registered pursuant to Section 15 of the
Exchange Act; an insurance company (as defined in Section
2(13) of the Securities Act; an investment company registered
under the Investment Company Act of 1940 or a business
development company (as defined in Section 2(a)(48) of that
Act; a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958; a plan established
and maintained by a state, its political subdivisions, or an
agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan
has total assets in excess of $5,000,000; an employee benefit
plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a
plan fiduciary (as defined in Section 3(21) of such act),
which
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is either a bank, savings and loan association, insurance
company or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by
persons that are accredited investors;
(vi) A private business development company (as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
(vii) An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, a Massachusetts or a
similar business trust, or partnership, not formed for the
specific purpose of acquiring Acquiror Stock, with total
assets in excess of $5,000,000; or
(viii) A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring Acquiror Stock,
whose purchase is directed by a sophisticated person (as
described in Rule 506(b)(2)(ii) of the Securities Act).
(f) Stockholder represents and warrants that he or it has had the
opportunity to ask questions of Acquiror concerning its business and to
obtain any information which Stockholder considered necessary to verify
the accuracy of or to amplify upon Acquiror's disclosures, including the
Acquiror Reports attached as Exhibit A hereto, and have had all questions
which have been asked by Stockholder answered by Acquiror to Stockholder's
satisfaction.
9. Standstill and Transfer Restrictions on Acquiror Securities.
(a) Stockholder agrees that from the Effective Time and for a period
of three years after the Effective Time (the "Restriction Period"),
without the prior written consent of the Board of Directors of Acquiror as
evidenced in a resolution adopted by two-thirds of the directors of
Acquiror, Stockholder will not, and will cause each of its Affiliates whom
it controls not to, directly or indirectly, alone or in concert with
others:
(i) acquire, offer or propose to acquire, or agree to acquire
(except, in any case, upon consummation of the Merger, by way
of option grants approved by the Board of Directors of
Acquiror or the compensation committee thereof, or upon the
conversion, exercise or exchange of Acquiror Securities (as
defined below)) whether by purchase, tender or exchange offer,
or through the acquisition of control of another person or
entity or knowingly otherwise, any securities issued by
Acquiror which are entitled to vote generally for the election
of directors or any direct or indirect rights or options to
acquire any such securities or any securities convertible or
exercisable into or exchangeable for such securities
(collectively, "Acquiror Securities"); provided, that
Stockholder and its Affiliates may purchase or acquire, in the
aggregate during the Restriction Period, additional Acquiror
Securities in an amount which in the aggregate does not exceed
one percent (1%) of the fully diluted shares outstanding of
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Acquiror immediately following the Effective Time (as
appropriately adjusted for stock splits, etc.);
(ii) knowingly make or participate in any "solicitation" of
"proxies" or "consents" (as such terms are used in the proxy
rules of the United States Securities and Exchange Commission)
with respect to any Acquiror Securities, or make proposals for
the approval of stockholders of Acquiror;
(iii) knowingly form, join or participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) with
respect to Acquiror Securities;
(iv) deposit any Acquiror Securities in any voting trust or
knowingly subject any Acquiror Securities to any agreement
with respect to the voting of any Acquiror Securities;
(v) otherwise knowingly act to control or seek to control the
management, Board of Directors or policies of Acquiror (except
with respect to actions taken by Stockholder solely in his
capacity as an officer or director of Acquiror in the exercise
of his fiduciary duties);
(vi) make or disclose any request to amend, waive or terminate
any provision of this Section 9 (including this clause
(9)(a)(vi));
(vii) offer, pledge, sell, contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or
transfer ("Transfer"), any Acquiror Securities, whether now
owned or hereafter acquired by Stockholder or with respect to
which Stockholder has or hereafter acquires the power of
disposition, if following such Transfer, the transferee of
such Acquiror Securities together with its Affiliates and
Associates would own in excess of 10% of the voting power
represented by the then outstanding Acquiror Securities
(assuming conversion by such transferee and its Affiliates and
Associates of all securities convertible or exercisable into
or exchangeable for shares of Acquiror Securities); provided,
that this Subsection 9(a)(vii) shall not limit the ability of
Stockholder to (A) make a bona fide pledge of its Acquiror
Securities to a nationally recognized financial institution
engaged in such transactions in the normal course of its
business to secure indebtedness so long as pledgee agrees to
be bound by the terms of this Section 9 in the event it
forecloses on Acquiror Securities representing in excess of
10% of the voting power represented by the then outstanding
Acquiror Securities, unless such pledgee has agreed to sell
such Acquiror Securities in open-market transactions over a
national securities exchange, (B) enter into bona fide hedging
transactions with respect to its Acquiror Securities with a
nationally recognized financial institution engaged in such
transactions in the normal course of its business or (C) sell
Acquiror Securities pursuant to an underwritten
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public offering or over a national securities exchange (other
than in prearranged block transactions); or
(viii) make any agreement to do any of the foregoing to the
extent restricted thereby.
(b) Acquiror acknowledges and agrees that, solely as a result of
Stockholder's execution of this Agreement and compliance with the
provisions hereof, (i) neither Stockholder nor its Affiliates shall, and
neither Stockholder nor its Affiliates shall be deemed to, be acting
together or agreeing to act together with any other person or entity with
respect to Acquiror Securities, and (ii) Stockholder has not acted other
than independently and individually, without regard to the purposes or
intention of any other person or entity and without the purpose or intent
of acting together with any other person or entity for any reason. With
respect to obligations of Stockholder pursuant to any provision of this
Section 9 qualified by the "knowledge" of Stockholder, it is understood
and agreed that upon receipt by Stockholder of notice from Acquiror that
Stockholder has breached a provision of this Section 9 (notwithstanding
any requirement relating to knowledge of Stockholder contained in such
provision), Stockholder's receipt of such notice shall evidence the
requisite knowledge of Stockholder under this Section 9 with respect to
such activities constituting a breach on a going forward basis, and
Stockholder shall be required to use its reasonable best efforts to
promptly remedy any such activities which so constitute a breach without
regard to the knowledge qualifier, whether or not such breach is then
continuing.
(c) If at any time during the Restricted Period, Stockholder and its
Affiliates "beneficially own" (as defined in Rule 13d-3 under the Exchange
Act) in the aggregate less than five percent (5%) of the voting power
represented by the fully diluted Acquiror Securities then outstanding,
Stockholder and its Affiliates shall no longer be subject to the
provisions of this Section 9; provided, that if at any time following such
occurrence, Stockholder and its Affiliates "beneficially own" (as defined
in Rule 13d-3 under the Exchange Act) in the aggregate five percent (5%)
or more of the voting power represented by the fully diluted Acquiror
Securities then outstanding, the provisions of this Section 9 shall once
again apply and be in full force and effect with respect to Stockholder
and its Affiliates for the remainder of the Restriction Period, if any.
(d) Notwithstanding Section 5 hereof, Acquiror shall not be
restricted from seeking or obtaining monetary damages from Stockholder for
breach of this Section 9, up to a maximum of $5.0 million; provided that
such $5.0 million maximum liability shall be a joint cap applicable to the
aggregate liability of Stockholder under this Section 9 and of Bloomfield
Partners Family L.P., a Delaware Limited Partnership under Section 9 of
that certain Stockholders Agreement between Bloomfield Partners Family
L.P. and Acquiror dated the date hereof.
10. Waiver of Company Liquidation Preference. To the extent that
Stockholder owns shares of Company Preferred Stock, Stockholder hereby
waives any right to a liquidation preference resulting from the Merger
pursuant to Section 2(b) of Article V of the Company's Second Amended and
Restated Certificate of Incorporation.
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11. Term of Agreement; Termination. Subject to Section 14(e), the term of
this Agreement shall commence on the date hereof and such term and this
Agreement shall terminate upon the earliest to occur of (i) the Effective Time,
and (ii) the date on which the Merger Agreement is terminated in accordance with
its terms; provided, however, that the provisions of Section 9 shall survive the
Effective Time in accordance with the terms of Section 9. Upon such termination,
no party shall have any further obligations or liabilities hereunder; provided,
that such termination shall not relieve any party from liability for any breach
of this Agreement prior to such termination.
12. Representations and Warranties of the Stockholder. Stockholder
represents and warrants to Acquiror that, as of the date hereof, (a) Stockholder
has full legal power and authority to execute and deliver this Agreement and the
Proxy, and (b) the Shares are free and clear of all proxies (except for a proxy
which is not inconsistent with the terms of this Agreement).
13. Entire Agreement. This Agreement supersedes all prior agreements,
written or oral, among the parties hereto with respect to the subject matter
hereof and contains the entire agreement among the parties with respect to the
subject matter hereof (other than the Merger Agreement and the Registration
Rights Agreement). This Agreement may not be amended, supplemented or modified,
and no provisions hereof may be modified or waived, except by an instrument in
writing signed by all parties hereto. No waiver of any provisions hereof by any
party shall be deemed a waiver of any other provisions hereof by any such party,
nor shall any such waiver be deemed a continuing waiver of any provision hereof
by such party.
14. Notices. All notices, requests, claims, demands or other
communications hereunder shall be in writing and shall be deemed given when
delivered personally, upon receipt of a transmission confirmation if sent by
telecopy or like transmission (with confirmation) and on the next business day
when sent by a reputable, national overnight courier service to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice): ):
If to Acquiror: HA-LO Industries, Inc.
5980 West Touhy Avenue
Niles, IL 60714
Attn: Gregory J. Kilrea, CFO
With a copy to: Neal, Gerber & Eisenberg
Two North LaSalle Street
Suite 2100
Chicago, IL 60602
Attn: Barry J. Shkolnik, Esq.
If to Stockholder: Altheimer & Gray
10 South Wacker Drive
Chicago, IL 60606
Attn: Peter H. Lieberman
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With a copy to: _______________________
_______________________
_______________________
_______________________
Attention:_____________
15. Miscellaneous.
(a) This Agreement shall be deemed a contract made under, and for
all purposes shall be construed in accordance with, the laws of the State of
Delaware, without reference to its conflicts of law principles.
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid or unenforceable
by a court of competent jurisdiction, such provision or application shall be
unenforceable only to the extent of such invalidity or unenforceability, and the
remainder of the provision held invalid or unenforceable and the application of
such provision to persons or circumstances, other than the party as to which it
is held invalid, and the remainder of this Agreement shall not be affected.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(d) All Section headings herein are for convenience of reference
only and are not part of this Agreement, and no construction or reference shall
be derived therefrom.
(e) The obligations of Stockholder shall not be effective or binding
upon Stockholder until after such time as the Merger Agreement is executed and
delivered by the Company, Acquiror and Acquiror Sub, and the parties agree that
there is not and has not been any other agreement, arrangement or understanding
between the parties hereto with respect to the matters set forth herein, other
than the Merger Agreement and the Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
ACQUIROR:
HA-LO INDUSTRIES, INC.
By: /s/ John Kelley
------------------------------------
John Kelley, Chief Executive Officer
STOCKHOLDER:
/s/ Bradley Keywell
------------------------------------
Bradley Keywell
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SCHEDULE I
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Number of shares of Number of shares of Number of shares of Number of Shares of
Company Class A Common Company Class B Common Company Series A Company Series B
Stock, par value $.001 Stock, par value $.001 Preferred Stock, par Preferred Stock, par
Name of Stockholder per share per share value $.001 per share value $.001 per share
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Brad Keywell 0 0 0 0
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Total
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APPENDIX A
FORM OF PROXY
The undersigned, for consideration received, hereby appoints John Kelley
and Greg Kilrea, or either of them, or any other officer of HA-LO INDUSTRIES,
INC., an Illinois corporation ("Acquiror"), its proxy to vote the shares of
capital stock (the "Shares") of Starbelly.com, Inc., a Delaware corporation
f/k/a TheZebra.com, Inc. (the "Company"), owned by the undersigned and described
in that certain Stockholders Agreement dated January 17, 2000 between the
undersigned and Acquiror (a copy of such Agreement being attached hereto (the
"Stockholders Agreement") and which the undersigned is entitled to vote at any
meeting of stockholders of the Company, and at any adjournment thereof with
respect to all matters specified in Section 2 of the Stockholder's Agreement.
This proxy is subject to the terms of the Stockholder's Agreement, is coupled
with an interest and revokes all prior proxies granted by the undersigned with
respect to such Shares, is irrevocable and shall terminate and be of no further
force and effect automatically at such time as the Stockholder's Agreement
terminates in accordance with its terms. The undersigned also constitutes and
appoints John Kelley and Greg Kilrea, or either of them, as the undersigned's
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, to execute, for the undersigned and in the undersigned's name,
any written consent of stockholders that is executed in lieu of any meeting of
stockholders at which such persons (or either of them) would be entitled to
exercise the proxy granted hereby.
Dated: January 17, 2000
STOCKHOLDER:
/s/ Bradley Keywell
------------------------------------
Bradley Keywell