HALO TECHNOLOGY HOLDINGS, INC
000 XXXXXXXX XXXXXX, XXXXX XXXXX
XXXXXXXXX, XXXXXXXXXXX 00000
April 30, 2007
VIA TELECOPY (847-559-5807)
Crestview Capital Master, LLC
00 Xxxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxxx, 00000
Re: LETTER AGREEMENT, DATED APRIL 17, 2007 (THE "CRESTVIEW LOI")
Gentlemen:
Reference is made to the Crestview LOI. Capitalized terms used herein
and not defined herein will have the meanings ascribed to them in the Crestview
LOI.
The Company greatly appreciates the Fund's interest in Empagio and prior
investment in and support of the Company, but as the Fund correctly pointed out
in its April 30, 2007 letter to the Company's board of directors, delay in
closing an Empagio transaction is likely to:
o have a serious adverse effect on Empagio's customers;
o greatly impact Empagio's employees; and
o threaten the value of the Empagio business
In an effort to minimize the damage to Empagio from continued delay and thereby
maximize the value of Empagio for all of the Company's constituent interests
(including the Fund), the Company is formally notifying the Fund that:
1. The Company and the Fund will be unable to reach agreement on
definitive documents memorializing the Transaction for a
variety of reasons, including but not limited to the amount of
Transaction proceeds which would be available to pay down the
Company's senior financing source.
2. The Company is terminating the Crestview LOI, and specifically
terminating the Exclusivity Period without extending such
Exclusivity Period for an additional week as provided in
paragraph 1 of the Crestview LOI.
3. As a consideration for the Fund's efforts under the Crestview
LOI and interest in Empagio, the Company will agree to
reimburse the Fund for its reasonably documented fees and
expenses in pursuing the Transaction (up to a maximum of
$300,000) (the "Expense Reimbursement") so long as in
connection with such Expense Reimbursement the Fund (and its
affiliates) execute a termination and release agreement
which (i) formally agrees to the termination of the
Crestview LOI, and (ii) releases the Company and its
directors, officers, advisors and affiliates from any and
all actions, causes of action, in law or in equity, suits,
debts, liens, liabilities, claims, demands, damages,
punitive damages, losses, costs
or expenses, and reasonable attorneys' fees of any nature
whatsoever, including, without limitation, claims based upon
breach of fiduciary or other duty, legal fault,
misrepresentation or omission, negligence, offense,
quasi-offense, contract, quasi-contract, whether fixed or
contingent and including known, suspected or unknown claims
related to the Crestview LOI, the Company's conduct during
the period prior to termination of the Crestview LOI, or the
termination of the Crestview LOI.
If the Fund is interested in the proposal outlined in paragraph 3 above, please
contact the undersigned to discuss a mutually satisfactory termination and
release agreement and the Fund's fees and expenses incurred in pursuing the
Transaction.
Sincerely,
HALO Technology Holdings, Inc.
By: /s/ Xxx Xxxxxxxx
------------------------------------
Xxx Xxxxxxxx, CEO
