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The Shares, the Warrant and the shares of Common Stock issuable upon exercise of the Warrantcollectively are referred to herein as the **“Securities”.**     **2. ****Receipt of Settlement Payment****.**MemoryTen hereby accepts the Settlement Payment andinstructs SMH to issue the Securities in the name of KPO.     **3. ****Waiver and Release****.**Upon receipt by MemoryTen from SMH of the Settlement Payment,MemoryTen, and its subsidiaries and affiliates, and all of their past and present officers anddirectors, agents, employees, servants, successors, attorneys, representatives and assigns(collectively, the **“MemoryTen Parties”**), hereby unconditionally, fully and forever release, acquitand discharge SMH, its predecessors in interest, its successors in interest, its subsidiaries andaffiliates, and all of their past and present officers, directors, agents, employees, servants,attorneys, representatives and assigns from any and all liability, claims, actions, causes ofactions, demands, rights, damages, costs, loss, expenses and attorneys’ fees, of any kind or naturewhatsoever which in any way relates to the Invoice, or the transactions related to the Invoice,from the date hereof to the end of the world (collectively, the **“Claims”**). In addition, except asnecessary to enforce the terms of this Agreement, the MemoryTen Parties agree not to sue SMH fromthe date hereof to the end of the world arising out of or pertaining to the provisions of thisAgreement or the conduct of SMH in connection with its relationship with MemoryTen related to theInvoice, except as necessary to enforce the terms of this Agreement     **4. ****Representations and Warranties of Each Party****.**Each Party to this Agreementrepresents and warrants to, and agrees with, the other Party hereto as follows:     A. Each Party has received independent legal advice from its attorneys with respect to theadvisability of making the settlement provided for herein and with respect to the advisability ofexecuting this Agreement.     B. No Party relies or has relied on any statement, representation, omission, inducement, orpromise of any other Party (or any manager, member, officer, director, agent, employee,representative, or attorney for any other party) in executing this Agreement, or in making thesettlement provided for herein, except as expressly stated in this Agreement.     C. Each Party to this Agreement has investigated the facts pertaining to this settlement andthis Agreement, and all matters pertaining thereto, to the full extent that Party deems necessary.     D. Each Party has carefully read and reviewed with its attorneys, and knows and understands,the full contents of this Agreement and is voluntarily entering into this Agreement.     E. Each term of this Agreement is contractual and not merely a recital.     F. No Party has assigned, conveyed or transferred any Claims to any third parties that havebeen covered by this Agreement.     **5. ****Representations and Warranties of MemoryTen Regarding the Acceptance of the Securitiesin Satisfaction of SMH’s Obligations under the Invoices****.**MemoryTen represents and warrants to,and agrees with SMH as follows, which representations and warranties are true and accurate as ofthe date hereof and shall survive the execution of this Agreement:     A. MemoryTen can bear the economic risk of accepting the Securities in full satisfaction ofthe obligations owed by SMH to MemoryTen as reflected by the Invoices.
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     B. MemoryTen’s financial condition is such that MemoryTen is under no present or contemplatedfuture need for the amounts reflected by the Invoices to satisfy any existing or contemplatedundertaking, need or indebtedness, or to satisfy personal contingencies or obligationsnecessitating a certain level of liquidity.     C. The address set forth below on the signature page of this Agreement is MemoryTen’s true andcorrect residence, and MemoryTen has no present intention of becoming a resident of any other stateor jurisdiction.     D. MemoryTen is an “accredited investor” as that term is defined in Rule 501 of Regulation D,as promulgated under the Securities Act of 1933, as amended (the **“1933 Act”**), because MemoryTen is(i) a corporation, Massachusetts or similar business trust, or partnership, not formed for thespecific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; or(ii) an entity in which all of the equity owners are accredited investors. In addition, MemoryTenhas sufficient knowledge and experience in business and financial matters to evaluate and hasevaluated the merits and risks of this transaction.     E. MemoryTen confirms that all documents, records and books pertaining to its decision toaccept the Securities that have been requested by MemoryTen have been made available or deliveredto MemoryTen. Without limiting the foregoing, MemoryTen (i) has received and reviewed the draftCurrent Report on Form 8-K attached hereto as **Exhibit B**, (ii) has reviewed, and hasreceived copies, if desired, of the public filings of SMH that are available on the Securities andExchange Commission’s website, and (iii) has obtained or been given access to all informationconcerning SMH that MemoryTen has requested. As a result of its review of the materials concerningSMH, MemoryTen understands that SMH has limited operating funds and is in need of substantial,immediate funding in order to continue operating. Further, MemoryTen represents that itunderstands that if SMH does not receive immediate capital infusions in 2008, SMH will at leasthave to limit its operations severely and it may not be able to survive, and it is probable thatSecurities will have little or no value**.**In addition, MemoryTen represents that it understandsthat SMH will need to raise additional funding in the future, SMH has received no bindingcommitment from any source for additional funding and there is no assurance that SMH will be ableto secure any additional funding in the future. The disclosure of this term and paragraph E hereinin no way obligates MemoryTen to provide any such additional funding, unless the Parties enter intoany other agreement which may only be executed for separate and independent consideration.     F. MemoryTen has had the opportunity to ask questions of, and receive answers from, SMHconcerning the terms of MemoryTen’s acceptance of the Securities and to receive additionalinformation necessary to verify the accuracy of the information delivered to MemoryTen.     G. MemoryTen further represents MemoryTen is cognizant of the operations, financial conditionand capitalization of SMH, has available full information concerning SMH’s affairs to evaluate themerits and risks of accepting the Securities, and is aware that there is a very limited tradingmarket for the shares comprising the Common Stock.     H. MemoryTen understands that the Securities have not been registered under the 1933 Act, orany state securities laws in reliance on an exemption for private offerings and no U.S. federal orstate agency has made any finding or determination as to the fairness of this investment or anyrecommendation or endorsement of the offering of the Securities.
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     I. MemoryTen acknowledges that, in making the decision to accept the Securities insatisfaction of all obligations owed by SMH to MemoryTen as set forth in the Invoices, it hasrelied solely upon independent investigations made by MemoryTen.     J. MemoryTen has the full right, power and authority to enter this Agreement and to carry outand consummate the transactions herein. This Agreement constitutes the legal, valid and bindingobligation of MemoryTen.     K. MemoryTen understands and agrees that SMH is relying upon the accuracy, completeness, andtruth of MemoryTen’s representations, warranties, agreements, and certifications contained in thisAgreement in establishing compliance with federal and state securities laws. MemoryTen understandsthat any incomplete, inaccurate, or untruthful response, or the breach of MemoryTen’srepresentations, warranties, agreements, or certifications, may result in MemoryTen or SMH, orboth, being in violation of federal or state securities laws, and any person, including SMH, whosuffers damage as a result may have a claim against MemoryTen for damages. MemoryTen alsoacknowledges that MemoryTen is indemnifying SMH and others for these and other losses in pursuantto Section 7 of this Agreement.     **6. ****Representations and Warranties of KPO Regarding the Acquisition of the Securities andOther Matters****.**KPO represents and warrants to, and agrees with SMH as follows, whichrepresentations and warranties are true and accurate as of the date hereof and shall survive theexecution of this Agreement:     A. KPO is acquiring the Securities for investment purposes only, and for his own account, andis not acquiring the Securities with a view to or for the resale, distribution, subdivision orfractionalization thereof. KPO has no agreement or arrangement for any such resale, distribution,subdivision or fractionalization thereof, and he will not sell, transfer or otherwise dispose ofthe Securities for an indefinite period unless the transfer of the Securities is registered underthe U.S. federal securities laws or unless an exemption from registration is available.     B. KPO’s financial condition is such that KPO is under no present or contemplated future needto dispose of any portion of the Shares or the Warrant to satisfy any existing or contemplatedundertaking, need or indebtedness, or to satisfy personal contingencies or obligationsnecessitating a certain level of liquidity.     C. The address set forth below on the signature page of this Agreement is KPO’s true andcorrect residence, and KPO has no present intention of becoming a resident of any other state orjurisdiction.     D. KPO is an “accredited investor” as that term is defined in Rule 501 of Regulation D, aspromulgated under the Securities Act of 1933, as amended (the **“1933 Act”**), because KPO (i) has anet worth that exceeds $1,000,000; or (ii) has individual income in excess of $200,000. Inaddition, KPO has sufficient knowledge and experience in business and financial matters to evaluateand has evaluated the merits and risks of this investment.     E. KPO confirms that all documents, records and books pertaining to an investment in theSecurities that have been requested by KPO have been made available or delivered to KPO. Withoutlimiting the foregoing, KPO (i) has received and reviewed the draft Current Report on Form 8-Kattached hereto as **Exhibit B**, (ii) has reviewed, and has received copies, if desired, ofthe public filings of SMH
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that are available on the Securities and Exchange Commission’s website, and (ii) has obtainedor been given access to all information concerning SMH that KPO has requested. As a result of hisreview of the materials concerning SMH, KPO understands that SMH has limited operating funds and isin need of substantial, immediate funding in order to continue operating. Further, KPO representsthat he understands that if SMH does not receive immediate capital infusions in 2008, SMH will atleast have to limit its operations severely and it may not be able to survive, and it is probablethat the Securities will have little or no value. In addition, KPO represents that it understandsthat SMH will need to raise additional funding in the future, SMH has received no bindingcommitment from any source for additional funding and there is no assurance that SMH will be ableto secure any additional funding in the future. The disclosure of this term and paragraph E hereinin no way obligates KPO to provide any such additional funding, unless the Parties enter into anyother agreement which may only be executed for separate and independent consideration.     F. KPO has had the opportunity to ask questions of, and receive answers from, SMH concerningthe terms of an investment in the Securities and to receive additional information necessary toverify the accuracy of the information delivered to KPO.     G. KPO further represents he is cognizant of the operations, financial condition andcapitalization of SMH, has available full information concerning SMH’s affairs to evaluate themerits and risks of the investment in the Securities, and is aware that there is a very limitedtrading market for the shares comprising the Common Stock.     H. KPO understands that the Securities have not been registered under the 1933 Act, or anystate securities laws in reliance on an exemption for private offerings and no U.S. federal orstate agency has made any finding or determination as to the fairness of this investment or anyrecommendation or endorsement of the offering of the Securities.     I. KPO acknowledges that, in making the decision to purchase the Securities, he has reliedsolely upon independent investigations made by him.     J. KPO has the full right, power and authority to enter this Agreement and to carry out andconsummate the transactions herein. This Agreement constitutes the legal, valid and bindingobligation of KPO.     K. The Securities constitute a speculative investment and involve a high degree of risk ofloss by KPO of KPO’s total investment. KPO represents that an investment in the Securities is asuitable investment for him.     L. KPO acknowledges and is aware that a legend in substantially the following form will beimprinted on the certificates representing the Securities:“THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) ORANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OFUNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIESLAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO THE HOLDER OF THESECURITIES (UNLESS THE ISSUER IN ITS SOLE DISCRETION DETERMINES TO USE ITS OWNCOUNSEL), WITH ANY SUCH COUNSEL TO THE HOLDER AND ANY SUCH OPINION OF SUCH
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COUNSEL TO BE REASONABLY ACCEPTABLE TO THE ISSUER, THAT REGISTRATION OF SUCHSECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATESECURITIES LAWS IS NOT REQUIRED.”     M. KPO acknowledges and is aware of the following, in addition to other information includedin the information provided to KPO: (i.) There are substantial restrictions on the transferability ofthe Securities. The Securities cannot be transferred, pledged, hypothecated,sold or otherwise disposed of unless they are registered under the 1933 Act, oran exemption from such registration is available and established to thesatisfaction of SMH; investors in SMH have no rights to compel SMH to initiatethe registration of any transfer of the Securities under the 1933 Act; there isa limited public market for the Common Stock; and accordingly, KPO may have tohold the Securities indefinitely; and it may not be possible for KPO toliquidate his investment in SMH.  (ii.) KPO understands and agrees that SMH is relying upon theaccuracy, completeness, and truth of KPO’s representations, warranties,agreements, and certifications contained in this Agreement, in determiningKPO’s suitability as an investor in SMH and in establishing compliance withfederal and state securities laws. KPO understands that any incomplete,inaccurate, or untruthful response, or the breach of KPO’s representations,warranties, agreements, or certifications, may result in KPO or SMH, or both,being in violation of federal or state securities laws, and any person,including SMH, who suffers damage as a result may have a claim against KPO fordamages. KPO also acknowledges that he is indemnifying SMH and others forthese and other losses pursuant to Section 7 of this Agreement.     **7. ****Indemnification****.**Each of MemoryTen and KPO acknowledges that he or it understandsthe meaning and legal consequences of the representations, warranties, agreements, andcertifications contained in Section 5 with respect to MemoryTen, and Section 6 with respect to KPO,and each of MemoryTen and KPO hereby agrees to indemnify and hold harmless each of SMH, itsmanagers, officers, directors, representatives and agents from and against any and all loss,damage, or liability due to or arising out of a breach of any representation, warranty, agreement,or certification, or the inaccuracy of any statement, of MemoryTen or KPO contained in thisAgreement or any other document submitted by MemoryTen or KPO in connection with this Agreement orreceipt of the Securities by either of them. The foregoing notwithstanding, nothing in thisAgreement, including the representations, warranties, agreements and certifications containedabove, shall be deemed to constitute a waiver of any rights that KPO, MemoryTen or any of the SMHParties may have under the 1933 Act and other federal and state securities laws.     **8. ****Confidentiality****.**     A. The Parties acknowledge that they may be in receipt of confidential information andmaterial, non-public information (as further described below) and hereby agree to safeguard suchinformation obtained from each other in connection with the entry into this Agreement, theSettlement hereunder and acquisition of the Securities. In connection therewith, the Partiesfurther agree as identified below in this Section 7.
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     B. Any and all non-public information about the business or finances of any of the Parties,including, without limitation, all information about (or relating to) the existence and nature ofthe Settlement and the acquisition of the Securities, and any products, services, software,technology, business plans, financial statements, projections, existing or proposed projects,suppliers, customers, pricing, purchase records, sale records, marketing, processes, methodologiesor trade secrets, in each case, of SMH or MemoryTen, in whatever form, from whatever source andwhenever such information is received by the other Party, shall be deemed confidential and shall becollectively referred to in this Agreement as **“Confidential Information”**. Notwithstanding theforegoing, the term “Confidential Information” shall not include information which (a) was in aParty’s possession prior to disclosure by the other Party, (b) is independently developed by theholding Party, (c) becomes publicly available without violation of this Agreement or by any faultof any party, (d) becomes lawfully available from a third party, or (e) is approved for disclosureby written authorization of the other opposing disclosing Party.     C. All Parties agree that they are receiving the Confidential Information solely for thepurpose of reaching Settlement, evaluating SMH and the acquisition of the Securities hereunder andthat they will not at any time during such evaluation or thereafter (i) use any ConfidentialInformation for any other purpose or (ii) discuss, disclose or otherwise transfer any ConfidentialInformation to any person or entity, provided that all Parties shall be permitted to discuss,distribute or otherwise transfer such Confidential Information to their respective employees,agents, counsel, professional consultants and accountants who, in each such case, have a specificneed to know such Confidential Information. Each Party may disclose Confidential Information ofSMH to the extent required by law, subpoena or other legal process, regulatory authority or courtorder, provided however, that each Party shall use their best efforts to timely provide the otherParty written notice of such required disclosure (but in no case later than five business daysprior to such requirement, and take reasonable and lawful actions to avoid and/or minimize theextent of such disclosure.) Each Party shall take all reasonable steps to prevent unauthorizeddisclosure or use of the other Party’s Confidential Information. Each Party will be responsiblefor any unauthorized disclosure or misuse of the other Party’s Confidential Information by theirrespective employees, agents, counsel, financial consultants and accountants.     D. Each Party hereby agrees and acknowledges that they are aware of the United Statessecurities laws that prohibit any person who has received from an issuer material, non-publicinformation concerning the matters which are the subject of this Agreement from purchasing orselling securities of such issuer or from communicating such information to any other person undercircumstances in which it is reasonably foreseeable that such person is likely to purchase or sellsuch securities. Each Party agrees that they shall adhere to all securities law requirementsconcerning the transfer of material non-public information to others and the purchase and sale ofsecurities when they are in possession of material non-public information.     E. Each Party agrees that the Confidential Information is disclosed on an “as is” basis, withno representations or warranties, express or implied. In no event (except as otherwise agreed)will any Party be liable for any damages suffered by the other Party arising out of any use by theother Party of the Confidential Information disclosed hereunder to the other Party.     F. Each Party agrees to, upon the request of the other Party, to return or destroy alldocuments and materials (including any permitted copies) containing Confidential Information of theother Party, and to destroy or delete all documents and materials containing ConfidentialInformation to the extent held by each Party in any electronic or other intangible form.     G. Each Party’s obligations under this Agreement shall not be in any manner affected bybankruptcy, receivership, assignment, attachment or seizure procedures, whether initiated by or against
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either Party, nor by the rejection of any agreement between the Parties by a trustee inbankruptcy, or by either Party as a debtor-in-possession or the equivalent of any of the foregoingunder local law.     H. Each Party agrees that monetary damages may not be a sufficient remedy for any threatenedor actual breach of the provisions of this Section 6. Therefore, in addition to monetary damages,all Parties shall be entitled to seek other remedies at law, injunctive or other equitable reliefand/or specific performance to remedy or prevent any threatened or actual breach of the provisionsof this Section 7.     **9. ****Miscellaneous****.**     A. This Agreement is intended to be and is an accommodation between the Parties and shall notbe construed as an admission by any party of any claim or affirmative defense asserted by any otherParty, nor shall this Agreement be construed as a waiver, modification, or retraction of thepositions taken by any Party in this action or with respect to any other non-party.     B. This Agreement is the product of informed negotiations and involves compromises of theParties’ previously stated legal positions. Each Party has received independent legal advice fromtheir respective attorneys with respect to the advisability of making the settlement provided forherein and with respect to the advisability of executing this Agreement. No Party relies or hasrelied on any statement, representation, omission, inducement, or promise of any other Party (orany officer, agent, employee, representative, or attorney for any other party) in executing thisAgreement, or in making the Settlement provided for herein, except as expressly stated in thisAgreement. Each Party to this Agreement has investigated the facts pertaining to this Settlementand this Agreement, and all matters pertaining thereto, to the full extent that Party deemsnecessary. Each Party has carefully read and reviewed with their own respective attorneys, andknows and understands, the full contents of this Agreement and is voluntarily entering into thisAgreement upon the advice of that Party’s attorneys.     C. The Parties acknowledge that they may have transactions between them other than thetransactions evidenced by the Invoices. The Parties agree that this Agreement pertains only to theInvoices and shall not affect the Parties’ rights one against the other as to claims or rights notarising out of, connected with or related to the Invoices as defined in this Agreement, except asprovided herein.     D. Each of the Parties hereto agrees to bear their own costs, attorneys’ fees, and otherexpenses associated with the dispute between the Parties hereto.     E. No amendments or variations of the terms of this Agreement shall be valid unless made inwriting and signed by all Parties hereto.     F. This Agreement may be executed in one or more counterparts all of which taken togethershall constitute a single instrument.     G. This Agreement shall be governed and construed as binding upon the Parties hereto, andtheir respective successors, and no other person shall have any right or obligation hereunder.This Agreement shall be binding upon and inure to the benefit of the Parties hereto, and theirrespective heirs, successors, assigns, receivers, and trustees.     H. No amendments or variations of the terms of this Agreement shall be valid unless made inwriting and signed by all Parties hereto.
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     I. This Agreement is fully integrated, and constitutes the entire agreement and understandingbetween and among the Parties with respect to the matters addressed herein and, except as set forthin this Agreement, no representations, warranties or promises have been made or relied upon by theParties to this Agreement.     J. This Agreement will be construed and enforced in accordance with and governed by the lawsof the State of Colorado, except for matters arising under the 1933 Act, without reference toprinciples of conflicts of law.     K. No waiver by either Party of any provision or any breach of this Agreement constitutes awaiver of any other provision or of any other breach of this Agreement, and no waiver shall beeffective unless made in writing. The right of each Party to require strict performance andobservance of any obligations hereunder shall not be affected in any way by any previous waiver,forbearance or course of dealing.     L. In the event that any provision of this Agreement is determined to be invalid,unenforceable or illegal, then such provision shall be deemed to be superseded and this Agreementmodified with a provision that most nearly corresponds to the intent of the Parties and is valid,enforceable and legal.     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective datesset forth below to be effective as of April ___, 2008.       SILICON MOUNTAIN HOLDINGS, INC., a