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                                 AMENDMENT NO. 1
                                       TO
                              EMPLOYMENT AGREEMENT

         This Amendment No. 1 to Employment Agreement (the "Amendment") is made
and entered into as of the 9th day of November, 1999, by and between HA-LO
INDUSTRIES, INC., an Illinois corporation ("Employer'), and RICHARD A. MAGID
("Employee").

         WHEREAS, Employer and Employee are parties to that certain Employment
Agreement, dated as of January 1, 1998 (the "Employment Agreement"); and

         WHEREAS, Employer and Employee desire to amend the Employment Agreement
in the manner set forth herein;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby mutually acknowledged, Employer and Employee
hereby agree as follows:

         1. DEFINED TERMS. All terms defined in the Employment Agreement shall
have the same meanings when used herein.

         2. RESIGNATION. Concurrently with the execution of this Amendment,
Employee is delivering to Employer his resignation, in the form of Exhibit A
attached hereto, as an officer and director of Employer and each of its direct
and indirect subsidiaries, which resignation shall be effective immediately.

         3. TERM. Notwithstanding anything to the contrary contained in the
Employment Agreement, and in particular Section 3 thereof, effective as of the
date of this Amendment the term of the Employment Agreement shall be extended
through November 8, 2003. The four-year period from November 9, 1999 through
November 8, 2003 is hereinafter referred to as the "Remaining Term." The
Remaining Term shall not be subject to automatic extension.

         4. EMPLOYMENT; DUTIES OF EMPLOYEE. Notwithstanding anything to the
contrary contained in the Employment Agreement, and in particular Section 2
thereof, during the Remaining Term (i) Employee's position with Employer shall
be Consultant to the Chief Executive Officer, which position shall be a
non-officer position, and (ii) Employee's duties in such position shall be to
provide key insights to the Chief Executive Officer relative to both new and
existing initiatives and to perform such other duties as are commensurate with
his experience, skills and abilities. Employee's services shall be rendered on
an "as needed" basis to the best of Employee's abilities. Employee's services
shall be performed in the Chicago metropolitan area and elsewhere, consistent
with past performance of services by Employee. In addition to the foregoing,
Section 4 of the Employment Agreement is hereby deleted in its entirety.


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         5. COMPENSATION AND BENEFITS. Notwithstanding anything to the contrary
contained in the Employment Agreement, and in particular Section 5 thereof,
during the Remaining Term:

            (a) Employee's Base Pay shall be at the annual rate of Three
         Hundred Thousand Dollars ($300,000), payable in accordance with the
         normal payroll practices of Employer. Payment of all Base Pay for the
         remainder of the Remaining Term shall accelerate and become immediately
         due and payable upon the filing by or on behalf of Employer of a
         bankruptcy petition pursuant to Chapter 7 of the United States
         Bankruptcy Code or a conversion of any bankruptcy proceeding to a
         Chapter 7 proceeding.

            (b) In lieu of any other bonus compensation contemplated by
         Section 5(b) of the Employment Agreement, Employee shall be paid a
         bonus in the amount of One Hundred Thousand Dollars ($100,000) if he is
         employed by Employer on May 8, 2000, payable in full within two (2)
         days after such date.

            (c) Employee's existing fringe benefits (including, without
         limitation, current and future plans for non-officers of Employer for
         which Employee is eligible to participate, automobile lease, car phone
         and medical) shall continue in full force and effect.

         6. TERMINATION. Notwithstanding anything to the contrary contained in
the Employment Agreement, and in particular Section 7 thereof, during the
Remaining Term:

            (a) If, for any reason other than termination for Cause on or
         prior to May 8, 2000 or a voluntary termination by Employee, Employee
         ceases to be employed by Employer, then Employee shall be entitled to
         continue to receive the remainder of his Base Pay for the entire
         Remaining Term, which amounts shall be payable (subject to normal
         withholdings within seven (7) days after Employee ceases to be employed
         by Employer.

            (b) If Employee voluntarily ceases to be employed by Employer
         on or after May 9, 2000 or is terminated for Cause on or prior to May
         8, 2000, then Employee shall be entitled to continue to receive the
         Base Pay to which he would have otherwise been entitled to receive for
         a period of eighteen (18) months from the date of ceasation of
         employment (subject to normal withholdings and in accordance with the
         normal payroll practices of Employer), payable in equal installments
         over the nine (9)-month period immediately following such ceasation of
         employment.

            (c) Upon Employee ceasing to be employed by Employer pursuant
         to Section 6(a) or 6(b), Employee shall be entitled to continue to
         receive the fringe benefits referred to in Section 5(c) during the
         remainder of the Remaining Term (in the case of Section 6(a)) or the
         eighteen (18)-month period immediately following such ceasation of
         employment (in the case of Section 6(b)), as applicable.


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         7. OPTIONS. Notwithstanding anything to the contrary contained in any
option or other agreements between Employer and Employee, all options to
purchase shares of common stock of Employer currently held by Employee shall,
concurrently with the execution of this Amendment, be fully vested (and not
subject to forfeiture) and shall be exercisable until the expiration of their
respective terms notwithstanding Employee's earlier termination as an employee
of Employer or otherwise.

         8. COVENANT NOT TO COMPETE; CONFIDENTIALITY. Employee hereby
acknowledges the continuing effectiveness of Sections 8 and 9 of the Employment
Agreement. Notwithstanding anything to the contrary contained in said Section 8,
the restrictions set forth therein shall survive the termination of Employee's
employment with Employer, for any reason, for a period of one (1) year.

         9. INDEMNITY; DIRECTORS AND OFFICERS INSURANCE. Employer shall, during
and after the Remaining Term, indemnify Employee in the manner provided in the
By-Laws of Employer (as set forth as of the date hereof) to the fullest extent
provided by law. Employer shall purchase and maintain tail coverage relative to
its existing directors and officers insurance policy covering Employee during
the Remaining Term and for two (2) years thereafter, so long as such coverage
continues to be available to Employer during each insurance year at a premium
not in excess of 150% of the immediately prior insurance year's premium for such
coverage.

         10. MUTUAL RELEASE. Employer, on behalf of itself and its officers,
directors, employees, shareholders, representatives, agents, affiliates,
successors and assigns, and Employee, on behalf of himself and his legal
representatives, beneficiaries, heirs, legatees, executors, administrators,
successors and assigns, each remise, release and forever discharge the other of
and from any and all manner of actions, proceedings, causes of action, suits,
debts, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, controversies, contracts, leases, agreements, promises, variances,
trespasses, damages, judgments, executions, claims and demands, of any nature
whatsoever, and of every kind or description, choate or inchoate, known or
unknown, at law or in equity (collectively, the "Claims"), which the releasing
parties, or any of them, now have or ever had, or hereafter can, shall or may
have, for, upon or by reason of any matter, cause or thing whatsoever, against
the released parties, and each of them, from the beginning of time through the
date hereof, including, but not limited to, any claims related to, arising out
of or in connection with that certain Agreement, dated November 30, 1997,
between Employer and Employee regarding a "change of control" of Employer, which
Agreement is hereby terminated in its entirety and of no further force or
effect; provided, however, that nothing herein shall be construed as a release
of any rights of Employer or Employee arising after the date hereof under the
Employment Agreement, as amended hereby.

         11. LEGAL FEES. Employer shall promptly reimburse Employee for all
reasonable attorney's fees and related expenses incurred by Employee in
connection with the negotiation and execution of this Amendment.


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         12. CONTINUED EFFECTIVENESS. Except as contemplated by this Amendment,
the Employment Agreement shall continue in full force and effect in accordance
with its terms.

         IN WITNESS WHEREOF, the parties have executed this Amendment on the
date and year first above written.


EMPLOYER:                                   EMPLOYER:

HA-LO INDUSTRIES, INC.

By:_____________________________________    ___________________________________
   Its:_________________________________    Richard A. Magid


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