Exhibit 10.1
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of the  _____  day of
August, 2008 by and among SILICON MOUNTAIN HOLDINGS, INC., a Colorado
corporation (the “Corporation”), MEMORYTEN, INC., a California corporation (the
“Subscriber”) and LV Administrative Services, Inc., a Delaware corporation,
solely as administrative and collateral agent to the Laurus/Valens Funds (as
defined herein).
R E C I T A L S
WHEREAS, the Subscriber is a supplier of inventory to the Corporation; and
WHEREAS, the Subscriber has, as of the date hereof, certain outstanding accounts
receivable owing from the Corporation for inventory heretofore supplied by the
Subscriber to the Corporation (the “Receivables”); and
WHEREAS, the Corporation and the Subscriber desire to convert the Receivables in
the amount of Five Hundred Thousand Dollars ($500,000) into shares of common
stock of the Corporation, and accordingly, the Corporation will issue a certain
number of shares of its common stock to the Subscriber in exchange for the
Subscriber’s forgiveness of the indebtedness of the Corporation represented by
the Receivables (“Segment I — Shares”); and
WHEREAS, the Subscriber desires to supply additional inventory in the amount of
Five Hundred Thousand dollars ($500, 000) to the Corporation in exchange for
additional shares of common stock of the Corporation (“Segment II — Shares”),
and the Corporation desires to obtain additional inventory and pay for the same
with shares of its common stock; and
WHEREAS, the Corporation and the Subscriber have agreed in principle to certain
additional arrangements, including a Trade Line of Credit Agreement, to be
executed at a later date, in return for Warrants (“Warrants”) and other
consideration and wish to set forth the terms and conditions of the foregoing
and such additional arrangements herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Purchase and Sale
1.1 The Corporation agrees to issue and sell to the Subscriber, and the
Subscriber agrees to subscribe for and purchase, that number of shares of common
stock of the Corporation determined by dividing (i) the U.S. dollar amount of
the Receivables (as mutually agreed and reconciled in good faith by the
Corporation and the Subscriber), up to a maximum amount of $500,000, by (ii)
$1.23 (the “Per Share Price”) (such shares of common stock, referred to herein
as the “Outstanding Receivables Shares” or “Segment I - Shares”).
1.2 The Corporation further agrees to issue and sell to the Subscriber, and the
Subscriber agrees to subscribe for and purchase, 406,504 shares of common stock
of the Corporation (the “Additional Inventory Shares” or “Segment II — Shares”)
(subject to appropriate adjustment in the event of any stock split, reverse
stock split, stock dividend or recapitalization affecting such common stock
after the date hereof).

 

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2.  
Purchase Price

2.1 In consideration for, and as payment in full of the purchase price for, the
Outstanding Receivables Shares or Segment I — Shares, the Subscriber agrees
that, upon the issuance by the Corporation of the Outstanding Receivables Shares
or Segment I — Shares, the indebtedness of the Corporation represented by the
Receivables and owing to the Subscriber shall be forgiven and the Receivables
shall thereby be deemed paid in full (up to a maximum of $500,000).
2.2 In consideration for, and as payment in full of the purchase price for, the
Additional Inventory Shares or Segment II — Shares, the Subscriber shall provide
$500,000 of additional inventory to the Corporation over a 90-day period
commencing on the date hereof. The Corporation will provide purchase orders to
the Subscriber specifying the particular inventory it desires. Such inventory
will be shipped at prices and on other terms and conditions consistent with past
practices as between the Subscriber and the Corporation. The parties hereto
acknowledge and agree that the number of Additional Inventory Shares or Segment
II — Shares has been determined by dividing $500,000 by the Per Share Price.

3.  
Subscriber Option to Fund Inventory and Subscriber Warrants

3.a. Subscriber’s Option to Provide Additional Inventory. Subject to the terms
and conditions contained in this Agreement, at any time prior to December 31,
2013, the Subscriber shall, at its sole option, provide additional inventory in
incremental, sequential segments (“Segments” or “Segment III, IV and additional
Segments thereafter”) of $500,000 for the purpose of supporting the Memory
Component Distribution Business (defined in Section 8.4 below). Such additional
Segments, or combination of Segments, shall be in the form of a separate Trade
Credit Line Agreement supported by a separate Promissory Note(s) and other
valuable consideration as determined by the Parties. The Corporation will
provide purchase orders to the Subscriber specifying the particular inventory it
desires for each additional sequential Segment (Segments III, IV and additional
Segments thereafter) at supply quantities as mutually determined by the Parties.
Such inventory will be shipped at prices and on other terms and conditions
consistent with past practices as between the Subscriber and the Corporation.
Nothing contained in this Section 3 shall require the Corporation to purchase
any specific quantity of inventory from the Subscriber.
3.b. Subscriber’s Additional Warrants for Each Segment. Upon the completion of
shipment(s) of inventory for each $500,000 Segment (Segments III, IV and
additional thereafter) (upon the balance of the respective Segment receivable
balance reaching $500,000), the Corporation shall issue and deliver to
Subscriber a warrant to purchase 150,000 shares of Common Stock of the
Corporation at an exercise price of $1.00 per share, which warrant may be
exercised within one year of the issuance date, (such shares, the “Option
Shares”). The Warrant shall be provided as consideration to induce Subscriber to
provide further continued supply of inventory Segments (see Par. 3.a. above).

4.  
For purposes of this Subscription Agreement, the Warrant(s) and the shares of
Common Stock underlying the Warrants may be referred to collectively as the
“Securities” Representations and Warranties of the Corporation

The Corporation hereby represents and warrants to the Subscriber as follows and
acknowledges that the Subscriber is relying on such representations and
warranties in connection with the transactions contemplated herein.

 

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4.1 The Corporation is a corporation duly organized and validly existing under
the laws of Colorado and is in good standing under such laws.
4.2 The Corporation has taken all legal action necessary for the due
authorization, execution and delivery by the Corporation of this Agreement, to
sell, issue and deliver the shares of the Corporation issued pursuant to the
terms hereof (the “Shares”) and to carry out and perform its obligations under
the terms of this Agreement. This Agreement has been duly and validly executed
by the Corporation and constitutes a valid and legally binding obligation of the
Corporation enforceable against it in accordance with its terms.
4.3 The Shares, when issued, delivered and paid for in full in accordance with
the terms of this Agreement, will be validly issued and fully paid shares of
common stock of the Corporation.
4.4 The Corporation has filed all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including
pursuant to Section 13(a) and 15(d) thereof, for the two years preceding the
date hereof. Such reports required to be filed by the Corporation under the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, together
with any materials filed or furnished by the Corporation under the Exchange Act,
whether or not any such reports were required being collectively referred to
herein as the “SEC Reports” and, together with this Agreement, the “Disclosure
Materials”. As of their respective dates, the SEC Reports filed by the
Corporation complied in all material respects with the requirements of the
Securities Act (as hereinafter defined) and the Exchange Act and the rules and
regulations of the SEC (as hereinafter defined) promulgated thereunder, and none
of the SEC Reports, when filed by the Corporation, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Corporation included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Securities and Exchange Commission (“SEC”) with respect thereto as in
effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements, the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP or may be condensed or summary statements, and fairly present in all
material respects the consolidated financial position of the Corporation as of
and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments. All material agreements to which the Corporation is
a party or to which the property or assets of the Corporation are subject are
included as part of or identified in the SEC Reports, to the extent such
agreements are required to be included or identified pursuant to the rules and
regulations of the SEC.
4.5 Since the date of the latest audited financial statements included within
the SEC Reports, except as disclosed in the SEC Reports, there has been no
event, occurrence or development that, individually or in the aggregate, has had
or would result in a material adverse effect on the results of operations,
assets, business or financial condition of the Corporation and its subsidiaries
taken as a whole.
4.6. Except as set forth in par. 8, neither the execution and delivery of this
Agreement nor the consummation or performance of any of the transactions
contemplated by this Agreement will, directly or indirectly (with or without
notice or lapse of time): (i) contravene, conflict with, or result in a
violation of any provision of any of Corporation’s articles of incorporation or
bylaws or

 

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any resolution adopted by the board of directors or the shareholders of
Corporation; (ii) contravene, conflict with, or result in a violation of any
applicable law, judgment, order, injunction, decree, rule, regulation, or ruling
of any governmental authority; (iii) require consent of any third party other
than as stated in this Agreement; or (iv) contravene, conflict with, constitute
grounds for termination of, or result in a breach of the terms, conditions, or
provisions of, or constitute a default under any agreement, instrument, license
or permit to which Corporation is now subject.
5. Representations, Warranties and Covenants of the Subscriber
The Subscriber hereby represents, warrants and covenants to the Corporation as
of the date hereof and as of the date of delivery of any of the Shares, and
acknowledges that the Corporation and its counsel are relying on such
representations, warranties and covenants in connection with the transactions
contemplated herein, as follows:
5.1 The Subscriber is a corporation duly organized and validly existing under
the laws of California and is in good standing under such laws.
5.2 The Subscriber has taken all legal action necessary for the due
authorization, execution and delivery by the Subscriber of this Agreement, to
subscribe for and purchase the Shares and to carry out and perform its
obligations under the terms of this Agreement. This Agreement has been duly and
validly executed by the Subscriber and constitutes a valid and legally binding
obligation of the Subscriber enforceable against it in accordance with its
terms.
5.3 The Subscriber confirms that the Subscriber:
5.3.1 has such knowledge in financial and business affairs as to be capable of
evaluating the merits and risks of its investment in the Shares;
5.3.2 is capable of assessing the proposed investment in the Shares as a result
of the Subscriber’s own experience;
5.3.3 is aware of the characteristics of the Shares and the risks relating to an
investment therein; and
5.3.4 is able to bear the economic risk of loss of its investment in the Shares.
5.4 The Subscriber understands that no securities commission, stock exchange,
governmental agency, regulatory body or similar authority has made any finding
or determination or expressed any opinion with respect to the merits of
investing in the Shares.
5.5 The Subscriber confirms that it has been advised to consult its own legal
and financial advisors with respect to the suitability of the Shares as an
investment for the Subscriber and the resale restrictions to which the Shares
are subject under applicable securities legislation, and has not relied upon any
statements made by or purporting to have been made on behalf of the Corporation
in deciding to subscribe for the Shares hereunder.
5.6 The Subscriber satisfies the following:
5.6.1 the Subscriber is an “accredited investor” as that term is defined in
Rule 501 of Regulation D under the Securities Act of 1933, as amended (the
“Securities Act”); and

 

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5.6.2 the Subscriber is aware that the Shares have not been and will not be
registered under the Securities Act and that the Shares may not be offered or
sold without registration under the Securities Act or compliance with the
requirements of an exemption from registration.
5.7 The Subscriber understands that any certificates representing the Shares
will bear a legend indicating that the transfer of such securities is
restricted.
5.8 The Subscriber is and will be acquiring the Shares for its own account, not
as a nominee or agent, for investment and not with a view to the resale or
distribution of any part thereof. The Subscriber is not party to and has no
contract, undertaking, agreement, arrangement or understanding with any person
or entity to sell, transfer or grant a participation to such person or entity or
any other person or entity, with respect to any of the Shares.
5.9 In connection with any public offering in respect of shares of capital of
the Corporation, the Subscriber covenants to enter into a customary “lock-up”
arrangement as the underwriters may reasonably request in order to facilitate
the public offering of those shares.

6.  
Subscriber Leak-Out Covenant

6.1 In addition to the representations, warranties and covenants of the
Subscriber set forth in Section 5 hereof, with the prior written consent of the
Corporation (which consent may not be unreasonably withheld), the Subscriber may
sell any restricted securities of the Corporation held in its account in
compliance with Federal Securities Rule 144 subject to the limitation that
Subscriber will not, during any three month period, sell any shares in excess of
five (5) percent of the shares held by subscriber for two (2) years after the
execution of this Agreement (as appropriately adjusted for any stock splits,
reverse stock splits, stock dividends and recapitalizations).
6.2 If the Corporation issues shares at any time to raise capital in the public
markets in a new offering (either through the issuance of new stock or Treasury
stock) (“New Offering”) and any other shareholder participates as a seller in
such New Offering, then the Subscriber shall also, at Subscriber’s option, be
permitted to participate in the New Offering as a seller on the basis equal to
that other shareholder’s “Dollars Invested Basis”.
6.2.1 “Dollars Invested Basis” shall mean that Subscriber shall participate in
the New Offering in the proportion (“Proportion”) to the historical cost of the
shares proposed to be sold by the other shareholder in the New Offering as a
function of (divided by) the actual dollars invested in all shares by the other
shareholder at historical cost according to the historical records of that
shareholder’s purchases of shares on the share records of the Corporation. This
Proportion shall be applied to Subscriber’s share number holdings at the time of
the New Offering to calculate the number of Subscriber’s shares to be sold in
the New Offering.

7.  
Completion of the Transaction

The transactions contemplated by this Subscription Agreement shall be completed
as follows:
7.1 The issuance and delivery of the Outstanding Receivables Shares and the
forgiveness of the indebtedness of the Corporation represented by the
Receivables as contemplated by Sections 1.1 and 2.1 hereof shall take place on a
mutually agreed upon date promptly following the reconciliation of the
Receivables contemplated by Section 1.1, but in no event later than 10 days
after the date hereof (the date of such issuance and delivery referred to herein
as the “First Issuance Date”).

 

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7.2 The issuance and delivery of the Additional Inventory Shares shall take
place promptly following the completion of the delivery to the Corporation of
the inventory contemplated by Section 2.2 hereof.
7.3 The issuance and delivery of the Option Shares shall take place promptly
following the completion of the delivery of the additional inventory
contemplated by Section 3 hereof, provided that, in the event that such
additional inventory is delivered in installments, the Corporation shall be
required to issue and deliver the Option Shares only upon delivery of all such
additional inventory agreed to by the Corporation in accordance with Section 3.

8.  
Additional Arrangements

8.1 Subject to the rights of LV Administrative Services, Inc (“LV”). as agent
for the Corporation’s senior secured creditors, the Laurus/Valens Funds
(collectively, the “Laurus/Valens Funds”) and the Laurus/Valens Funds
(collectively, the Laurus/Valens Funds and LV, the “Senior Lender Group”), under
documents executed by the Corporation in connection with loans made by the
Senior Lender Group to the Corporation (the “Documents”), if the Board of
Directors of the Corporation and the stockholders representing more than fifty
percent (50%) of the then issued voting stock of the Corporation approve of a
proposed Corporate Transaction (as defined below), AND where the proposed sale
price for the Corporation in such transaction is an amount less than $6 million,
then, in such event, the Corporation shall be required to offer in writing to
Subscriber and Subscriber shall have the first option and right to acquire all
of the shares in the proposed Corporate Transaction (as defined below) from the
Corporation at a price mutually agreed upon by the parties by the process
outlined in Paragraph 8.4 (i) (ii) & (iii) herein, and on other terms and
conditions mutually agreed to by the parties hereto in good faith. Subscriber
shall have ten (10) business days from the date of receipt of the offer of the
Corporate Transaction (as defined below) from the Corporation to respond in
writing to the Corporation of its intent (“Corporate Transaction Letter of
Intent”) to enter into a definitive agreement pursuant to said offer. The
Corporate Transaction Letter of Intent shall include a commitment, acceptable to
the Corporation and the Senior Lender Group, from Subscriber or a third party to
provide financing to complete such Corporate Transaction. The parties agree to
complete the definitive agreement, subject to the prior written consent of the
Senior Lender Group (which consent will not be unreasonably withheld), for the
proposed Corporate Transaction (as defined below) within sixty (60) calendar
days of receipt of the Corporate Transaction Letter of Intent by the
Corporation.
For purposes hereof, “Corporate Transaction” means (a) the acquisition of the
Corporation by another person or persons, or the acquisition by the Corporation
of another person or persons in a single transaction or a series of related
transactions (including, without limitation, by means of any merger or
consolidation or reduction in the capital stock of the Corporation) pursuant to
which the holders of the voting stock of the Corporation or their permitted
transferees, as constituted immediately prior to such acquisition, will not own
any of the outstanding capital stock having the ordinary voting power to elect
directors of the surviving or resulting entity immediately following such
acquisition; or (b) the sale or other transfer of all or substantially all of
the assets of the Corporation in a single transaction or in a series of related
transactions other than in the ordinary course of business.

 

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This right to acquire the all of the issued voting stock of the Corporation as
described herein this paragraph above shall expire at the earlier of:

  (i)  
Five (5) years subsequent to the execution of this Agreement, or
    (ii)  
Upon the sale or transfer of all of the shares of Subscriber to any person or
entity, other than a Permitted Assignee, as defined in Paragraph 11 herein.

Upon the exercise of the rights of Subscriber hereunder in accordance with this
Agreement, the Senior Lender Group will not unreasonably withhold consent or
approval, and will not unreasonably withhold any related waiver, under the
Documents to a transaction completed with Subscriber in accordance with this
Agreement.
8.2 Subject to the rights of the Senior Lender Group under the Documents, in the
event the Corporation proposes to offer the Memory Component Distribution
Business (as defined below) for sale or transfer in a transaction, then, in such
event, the Corporation shall be required to offer (“MC Offer”) in writing, to
Subscriber and Subscriber shall have the right to acquire from the Corporation
the Memory Component Distribution Business (as defined below) at a price
mutually agreed upon by the parties hereto by the process outlined in
Paragraph 8.4 (i) (ii) & (iii) herein, and on other terms and conditions
mutually agreed to by the parties hereto in good faith.
Subscriber shall have ten (10) business days from the date of receipt of the MC
Offer to respond in writing to Corporation of its intent to enter into a
definitive agreement pursuant to said Offer (the “MC Letter of Intent”). The MC
Letter of Intent shall include a commitment, acceptable to the Corporation and
the Senior Lender Group, from Subscriber or a third party to provide financing
to complete such sale or transfer. The parties agree to complete the definitive
agreement, subject to the prior written approval of the Senior Lender Group
(which approval shall not be unreasonably withheld), for the sale of the Memory
Component Distribution Business (as defined below) of the Corporation to the
Subscriber within sixty (60) calendar days of receipt of the MC Letter of Intent
by the Corporation.
This right to acquire the Memory Component Distribution Business (as defined
below) of the Corporation, as described herein this paragraph above shall expire
at the earlier of:

  (i)  
Five (5) years subsequent to the execution of this Agreement, or
    (ii)  
Upon the sale or transfer of all of the shares of Subscriber to any person or
entity other than a Permitted Assignee, as defined in Paragraph 11 herein.

Upon the exercise of the rights of Subscriber hereunder in accordance with this
Agreement, the Senior Lender Group will not unreasonably withhold consent or
approval, and will not unreasonably withhold any related waiver, under the
Documents to a transaction completed with Subscriber in accordance with this
Agreement.
8.3 Subject to the rights of the Senior Lender Group under the Documents, the
Corporation agrees that, in the event it determines to file a petition under the
bankruptcy laws of the United States, it will, in advance of any such filing,
give Subscriber the right to acquire the Memory Component Distribution Business
(as defined below) of the Corporation and consummate the sale transaction of the
Memory Component Distribution Business (as defined below) to Subscriber at a
price to be mutually agreed upon by the parties hereto by the process outlined
in Paragraph 8.4 (i), (ii) and (iii) herein and other terms and conditions
mutually agreed to by the parties hereto in good faith.

 

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Subject to applicable bankruptcy and other laws, the Corporation shall be
required to offer (“Pre-Bankruptcy Offer”) to Subscriber in writing the Memory
Component Distribution Business (as defined below), and Subscriber shall have
ten (10) business days from the date of receipt of the Offer to respond in
writing to Corporation of its intent (the “Pre-Bankruptcy Letter of Intent”) to
enter into a definitive agreement, subject to the prior written approval of the
Senior Lender Group, pursuant to the Pre-Bankruptcy Offer. The Pre-Bankruptcy
Letter of Intent shall include a commitment, acceptable to the Corporation and
the Senior Lender Group, from Subscriber or a third party to provide financing
to complete such acquisition. The parties agree to complete the definitive
agreement for the sale of the Memory Component Distribution Business (as defined
below), subject to the prior written approval of the Senior Lender Group (which
consent shall not be unreasonably withheld) within 20 calendar days of receipt
of the Pre-Bankruptcy Letter of Intent by the Corporation.
In any sale of the Memory Component Distribution Business (as defined below) of
the Corporation to Subscriber, whether under the terms of this paragraph herein
or otherwise, Subscriber shall have all rights to apply any accounts receivable
owed to Subscriber from Corporation towards the purchase price of the Memory
Component Distribution Business (as defined below). The Corporation shall not
challenge such application of accounts receivable and shall indemnify Subscriber
for any costs incurred, including reasonable legal costs, from any third party,
including other creditors of the Corporation from challenging such application
of accounts receivable toward the purchase price.
Upon the exercise of the rights of Subscriber hereunder in accordance with this
Agreement, the Senior Lender Group will not unreasonably withhold consent or
approval, and will not unreasonably withhold any related waiver, under the
Documents to a transaction completed with Subscriber in accordance with this
Agreement.
8.4 Subject to the rights of the Senior Lender Group under the Documents and
subject to bankruptcy court approval, and applicable procedures, in the event
that a proceeding is commenced by or against the Corporation under Title 11 of
the United States Code (and, if commenced against the Corporation, not dismissed
within 60 days), the Subscriber shall have the right to acquire the Memory
Component Distribution Business (as defined below) of the Corporation at the
highest of (i) the fair market value thereof as determined by a third party
independent expert mutually selected by the parties hereto and the Senior Lender
Group promptly following the Subscriber delivering to the Corporation notice
that it wishes to exercise such right, (ii) the highest and best offer selected
as the winning bid or offer in such proceeding, subject to any applicable
bankruptcy court imposed bid procedures and (iii) the price mutually agreed to
by the parties hereto and the Senior Lender Group, and on other terms and
conditions mutually agreed to by the parties hereto and the Senior Lender Group
in good faith. For purposes of this Agreement, “Memory Component Distribution
Business” shall mean the distribution of branded computer memory products direct
to end-users, including Fortune 100 corporations, provided that, such term shall
not include any Visionman, WidowPC, Acserva, Volaant and Storango branded
systems or products or any form of assembled systems. The Subscriber shall have
the right to pay all or a portion of the purchase price for the Memory Component
Distribution Business by forgiving the same amount of then outstanding accounts
receivable owing from the Corporation.

 

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8.5 It is the parties’ intention to implement over a reasonable period of time
after the date hereof the following collaborative initiatives:
8.5.1 The Corporation to provide non-memory marketing collateral to the
Subscriber to include in all of the Subscriber’s shipments to its customers.
8.5.2 The Subscriber to provide web space to advertise non-memory products.
8.5.3 The Subscriber to provide fulfillment services.
8.5.4 The parties to consider joint-utilization of facilities.
9. Further Assurances
Each of the parties hereto shall promptly do, make, execute or deliver, or cause
to be done, made, executed or delivered, all such further acts, documents and
things as the other party hereto may reasonably require from time to time for
the purpose of giving effect to this Agreement and shall use its commercially
reasonable efforts and take all such steps as may be reasonably within its power
to implement to the full extent the provisions of this Agreement.
10. Governing Law
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Colorado, without regard to conflict of law
principles thereof or of any other jurisdiction.
11. No Assignment
This Agreement shall be binding upon and inure to the benefit of the successors
and permitted assigns of the parties. This Agreement may be assigned to the sole
shareholder of Subscriber or any inter vivos trust of sole shareholder
(“Permitted Assignee”) established at any time without consent from any other
party. No other assignment of any rights or obligations under this Agreement may
be made without the prior written consent of the other party hereto, and any
attempted or purported assignment in violation of the foregoing shall be null
and void ab initio.
12. Entire Agreement
This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties hereto
with respect to the subject matter hereof.
13. Severability
The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
14. Third Party Beneficiary
The Senior Creditor shall be a third party beneficiary under this Agreement.

 

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15. Counterparts
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which together will constitute one and the same
instrument. Counterparts may be delivered by facsimile, e-mail or other form of
electronic communication.
IN WITNESS WHEREOF the parties hereto have executed this Subscription Agreement
as of the date first written above.

            SILICON MOUNTAIN HOLDINGS, INC.
      By:   /s/ Tré Cates         Name:   Tré Cates         Title:   CEO     

            MEMORYTEN, INC.
      By:   /s/ Kenneth Olson         Name:   Kenneth Olson        Title:  
President     

            LV ADMINISTRATIVE SERVICES, INC., as
Administrative and Collateral Agent to the
Laurus/Valens Funds and Senior Lender Group
      By:           Name:           Title:        

 

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EXHIBIT A
Form of Warrant