Exhibit 10.3
EXHIBIT B
AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is made and entered into as of March
21, 2001 (the "EFFECTIVE DATE") by and between HA-LO INDUSTRIES, INC., a
Delaware corporation ("HA-LO"), FORD MOTOR COMPANY, a Delaware corporation
("FORD"), Xxxxxx Xxxxxx or a consortium of financial investors led by him
(collectively, "Xxxxxx") and iDentify LICENSING MANAGEMENT, LLC, a Delaware
limited liability company (the "LLC").
WHEREAS, the members of the LLC have entered into that certain Amended
and Restated Limited Liability Company Agreement, dated as of November 3, 2000
(as amended and restated, the "LLC Agreement) (capitalized terms used herein
shall have the meaning set forth in the LLC Agreement unless otherwise defined
herein);
WHEREAS, Ford's consent is required for the transfer of any Membership
Interest in the LLC;
WHEREAS, concurrently with the execution hereof, HA-LO has transferred
its Membership Interest in the LLC to Xxxxxx;
WHEREAS, Ford is a Member of the LLC and desires certain changes to the
LLC Agreement to reflect the change in ownership from HA-LO to Xxxxxx;
WHEREAS, the parties hereto desire that certain agreements and covenants
set forth in the LLC Agreement survive HA-LO's transfer of its Membership
Interest upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. FORD'S CONSENT. Ford hereby grants its consent to HA-LO to
transfer all of its Membership Interest in the LLC to Xxxxxx upon and subject to
the agreement of the parties to the provisions of this Agreement.
2. NON-COMPETITION.
Until three years after the date hereof (such date being the
"TERMINATION DATE"),
(a) The LLC will not directly or indirectly engage in those existing
businesses of HA-LO that are listed on EXHIBIT A attached
hereto; provided that, if HA-LO ceases to engage in such
business, then this restriction shall no longer be applicable as
to such ceased business;
(b) HA-LO will not directly or indirectly engage in an activity that
falls within the scope of the LLC's business as defined in
Sections 3.1.1(a) and (b) of the LLC Agreement; and
(c) Until four years after the date hereof, the LLC will not sell
Ford Licensed Products and Merchandise to Ford corporate
accounts to the extent that HA-LO is capable of doing so on a
competitive basis.
Notwithstanding the foregoing, nothing contained herein shall preclude
the LLC from engaging in all of the businesses currently operated by The
Beanstalk Group, Inc. and its Affiliates.
3. COVENANTS OF HA-LO.
(a) HA-LO will use its best efforts to contact its Fortune 500
customers and other major customers in writing and encourage
them to use the LLC (i) to handle their licensing management and
(ii) along with licensing management, to control and manage and
provide gross revenues from their business-to-consumer catalog
sales businesses to the company in substantially the same manner
as HA-LO agreed to contribute the Ford collection catalog sales
business. Notwithstanding the preceding sentence, HA-LO will not
be required to encourage such customers to use the LLC where
HA-LO reasonably deems that making such offer to its customer
would detrimentally harm its relationship with its customer. In
such cases, HA-LO will discuss with the LLC the reasons for
taking this position.
(b) Until the Termination Date, HA-LO will offer to the LLC all new
business opportunities falling within the scope of the LLC's
business as set forth in Sections 3.1.1(a) and (b) of the LLC
Agreement.
(c) To the extent not yet completed, HA-LO will complete the
contribution of its worldwide Ford collection catalog sales
business to the LLC as required by Section 4.1.2 of the LLC
Agreement.
4. HA-LO AS SUPPLIER. Until the Termination Date, the LLC will
engage HA-LO to purchase all of the Ford Licensed Products and Merchandise that
will contain the Ford Brands, including those associated with the Ford
Collection catalog sales business. Except for co-branded products until the
Termination Date, HA-LO will be the supplier of record for the LLC for its
purchase of Ford Licensed Products and Merchandise that will contain the Ford
Brands provided that HA-LO can offer a comparable product or service on a timely
basis on competitive terms. If, in the reasonable opinion of the LLC, HA-LO
cannot offer a comparable product or service on a timely basis on competitive
terms, then the LLC may select another supplier for such product or service. The
terms and conditions of the arrangement between HA-LO and the LLC are described
on EXHIBIT B attached hereto.
5. TERMINATION OF CERTAIN HA-LO RIGHTS AND OBLIGATIONS. The parties
hereto agree that, other than the rights and obligations set forth in this
Agreement, all rights and obligations of HA-LO under the LLC Agreement are
hereby terminated; PROVIDED, HOWEVER, that (a) HA-LO's rights and obligations
under Article 12 of the LLC Agreement shall survive the transfer of its
Membership Interest in accordance with Section 12.1.6 of the LLC Agreement with
respect to the period of its membership in the LLC; and (b) HA-LO's rights and
obligations under Articles 10 and 11 of the LLC Agreement shall survive the
transfer of its Membership Interest with respect to the period of its membership
in the LLC.
6. LLC ALLOCATIONS. Pursuant to Section 14.3 of the LLC Agreement,
HA-LO shall not be entitled to any further distributions on account of the
Membership Interest assigned after the effective date of the assignment.
7. REVISIONS TO LLC AGREEMENT. Xxxxxx and Ford agree to enter into
a Second Amended and Restated LLC Agreement to reflect the current agreement
among the parties with respect to necessary changes to the LLC Agreement. Such
changes will include, without limitation, the following:
(a) Xxxxxx will be entitled to designate two persons to the Board.
Neither of these directors will be required to constitute a
quorum.
(b) All provisions of the LLC Agreement requiring unanimous consent
of either the Members or the Board will be eliminated except
that unanimous consent of the Board will be required to change
the provision specifying the mandatory Distributions.
(c) If Ford so elects, a "Xxxxxx & Xxxxx" structure will be
implemented for the LLC.
8. MISCELLANEOUS PROVISIONS.
(a) NOTICES. Any notice or other communication required or desired
to be given hereunder shall be in writing and shall be given personally, by
facsimile transmission, by delivery by a nationally recognized courier service
or by pre-paid registered or certified mail, return receipt requested, to the
parties as follows:
If to HA-LO: HA-LO Industries, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
If to the LLC: Identify Licensing Management, LLC
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile No.:
If to Ford: Ford Motor Company
Xxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
Facsimile No.: 000 000 0000
With a copy to: Ford Motor Company
Xxx Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxx, XX 00000-0000
Attention: Secretary
Facsimile No.: 000 000 0000
Notices hereunder shall be deemed to have been delivered and effective
for all purposes hereunder (i) if given by facsimile transmission when such
facsimile transmission is transmitted to the facsimile number specified in this
section and confirmed answerback is received, (ii) if given by registered or
certified mail, on the third business day after mailing, or (iii) if given by
any other means, when delivered at the address specified in this section. The
address of any party hereto may be changed by a notice in writing given in
accordance with the provisions hereof.
(b) BINDING AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective Affiliates (as
hereinafter defined), successors and assigns.
(c) GOVERNING LAW. This Agreement shall be governed by and
interpreted and construed according to the laws of the State of Michigan
(without regard to its conflicts of law principles).
(d) ENTIRE AGREEMENT. This Agreement, together with the incorporated
defined terms and sections of the LLC Agreement, contains the entire agreement
of the parties hereto with regard to the subject matter hereof, and may not be
changed orally, but only by an agreement in writing signed by the parties
hereto.
(e) HEADINGS. The descriptive headings of the sections of this
Agreement are inserted for convenience of reference only and shall not control
or affect the meaning, interpretation or construction of any of the provisions
hereof.
(f) REFERENCES TO PARTIES. All references in this Agreement to the
parties hereto shall be deemed to include such party and any and all Affiliates
of such party. For the purposes of this Agreement "AFFILIATE" shall mean a
person or entity that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control
(meaning the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
the ownership of voting securities, by contract or otherwise) with, the party
specified.
(g) WAIVER. Any party hereto may waive compliance by any other party
with any provision of this Agreement; provided, however, that no such waiver
shall be effective unless in writing signed by the waiving party.
(h) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall constitute one
document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
HA-LO INDUSTRIES, INC. FORD MOTOR COMPANY
By:_____________________________ By:____________________________
Its:_________________________ Its: _______________________
IDENTIFY LICENSING MANAGEMENT, LLC [XXXXXX]
By:_____________________________ By:_____________________________
Its:_________________________ Its:_________________________
