Document:

exv10w20

Exhibit 10.20

RELEASE AND SETTLEMENT AGREEMENT

     This Release and Settlement Agreement (this “Agreement”) is dated as of the ___day of
April, 2008 by and between Silicon Mountain Holdings, Inc., a Colorado corporation (“SMH”) and
MemoryTen, Inc., a California corporation (“MemoryTen”) and Kenneth P. Olsen (“KPO”) (collectively
the “Parties”, individually the “Party”).

Recitals

     A. MemoryTen is a vendor of SMH and provides SMH with certain computer memory products and
devices.

     B. As of April ___, 2008, SMH owes MemoryTen an amount equal to $89,284.00 pursuant to Invoice
Numbers 488281, 488839, 506854, 506971, 507050, 507147, 507256, 507352, 507436, 507577, 511100,
511985 dated 8/30/07, 9/04/07, 10/01/07, 12/12/07, 12/13/07, 12/14/07, 12/17/07, 12/18/07,
12/19/07, 12/20/07, 12/21/07, 2/13/08, 2/20/08, 3/05/08, respectively, from MemoryTen (the
“Invoices”) for products provided by MemoryTen to SMH.

     C. KPO is the sole equity holder of MemoryTen.

     D. MemoryTen is willing to accept shares of SMH’s common stock, par value $.001 per share
(“Common Stock”), and warrants exercisable into shares of SMH Common Stock in satisfaction of all
outstanding amounts owed to MemoryTen by SMH.

     E. MemorTen has requested that SMH issue the shares of Common Stock and the warrant in the
name of KPO.

     F. The Parties understand, acknowledge and agree that this Agreement constitutes satisfaction
of SMH’s specific obligations to MemoryTen for the Invoices in Recital A above only, and that it is
the desire and intention of each of the Parties to effect a final and complete resolution of these
specific obligations that SMH owes to MemoryTen and claims and causes of action that MemoryTen may
have against SMH resulting from such amounts owed to MemoryTen by SMH (the “Settlement”).

Agreement

     NOW, THEREFORE, in consideration of the above premises and the mutual covenants set forth
herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

     1. Settlement Amount. The Parties agree and acknowledge that SMH’s agreement to
deliver the Settlement Payment (as defined below) pursuant to the terms of this Agreement
constitutes full payment and satisfaction of the amounts owed by SMH to MemoryTen pursuant to the
Invoices, which equals $89,284.00. Subject to the terms and conditions contained in this
Agreement, SMH agrees to issue to MemoryTen 89,284 shares of Common Stock (the “Shares”) and a
warrant to purchase 89,284 shares of Common Stock at an exercise price of $.01 per share, which
warrant may be exercised on or before April ___, 2010 (the “Warrant”). A form of the warrant is
attached hereto as Exhibit A. The executed Warrant shall be delivered at the time of
execution of this Agreement. The certificate representing the Shares shall be delivered to
MemorTen within three (3) business days of the date of execution of this Agreement. The Shares and
Warrant collectively are referred to herein as the “Settlement Payment”.

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The Shares, the Warrant and the shares of Common Stock issuable upon exercise of the Warrant
collectively are referred to herein as the “Securities”.

     2. Receipt of Settlement Payment. MemoryTen hereby accepts the Settlement Payment and
instructs 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 and
directors, agents, employees, servants, successors, attorneys, representatives and assigns
(collectively, the “MemoryTen Parties”), hereby unconditionally, fully and forever release, acquit
and discharge SMH, its predecessors in interest, its successors in interest, its subsidiaries and
affiliates, and all of their past and present officers, directors, agents, employees, servants,
attorneys, representatives and assigns from any and all liability, claims, actions, causes of
actions, demands, rights, damages, costs, loss, expenses and attorneys’ fees, of any kind or nature
whatsoever 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 as
necessary to enforce the terms of this Agreement, the MemoryTen Parties agree not to sue SMH from
the date hereof to the end of the world arising out of or pertaining to the provisions of this
Agreement or the conduct of SMH in connection with its relationship with MemoryTen related to the
Invoice, except as necessary to enforce the terms of this Agreement

     4. Representations and Warranties of Each Party. Each Party to this Agreement
represents 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 the
advisability of making the settlement provided for herein and with respect to the advisability of
executing this Agreement.

     B. No Party relies or has relied on any statement, representation, omission, inducement, or
promise 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 the
settlement provided for herein, except as expressly stated in this Agreement.

     C. Each Party to this Agreement has investigated the facts pertaining to this settlement and
this 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 have
been covered by this Agreement.

     5. Representations and Warranties of MemoryTen Regarding the Acceptance of the Securities
in 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 of
the date hereof and shall survive the execution of this Agreement:

     A. MemoryTen can bear the economic risk of accepting the Securities in full satisfaction of
the 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 contemplated
future need for the amounts reflected by the Invoices to satisfy any existing or contemplated
undertaking, need or indebtedness, or to satisfy personal contingencies or obligations
necessitating a certain level of liquidity.

     C. The address set forth below on the signature page of this Agreement is MemoryTen’s true and
correct residence, and MemoryTen has no present intention of becoming a resident of any other state
or 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 the
specific 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, MemoryTen
has sufficient knowledge and experience in business and financial matters to evaluate and has
evaluated the merits and risks of this transaction.

     E. MemoryTen confirms that all documents, records and books pertaining to its decision to
accept the Securities that have been requested by MemoryTen have been made available or delivered
to MemoryTen. Without limiting the foregoing, MemoryTen (i) has received and reviewed the draft
Current Report on Form 8-K attached hereto as Exhibit B, (ii) has reviewed, and has
received copies, if desired, of the public filings of SMH that are available on the Securities and
Exchange Commission’s website, and (iii) has obtained or been given access to all information
concerning SMH that MemoryTen has requested. As a result of its review of the materials concerning
SMH, 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 it
understands that if SMH does not receive immediate capital infusions in 2008, SMH will at least
have to limit its operations severely and it may not be able to survive, and it is probable that
Securities will have little or no value. In addition, MemoryTen represents that it understands
that SMH will need to raise additional funding in the future, SMH has received no binding
commitment from any source for additional funding and there is no assurance that SMH will be able
to secure any additional funding in the future. The disclosure of this term and paragraph E herein
in no way obligates MemoryTen to provide any such additional funding, unless the Parties enter into
any 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, SMH
concerning the terms of MemoryTen’s acceptance of the Securities and to receive additional
information necessary to verify the accuracy of the information delivered to MemoryTen.

     G. MemoryTen further represents MemoryTen is cognizant of the operations, financial condition
and capitalization of SMH, has available full information concerning SMH’s affairs to evaluate the
merits and risks of accepting the Securities, and is aware that there is a very limited trading
market for the shares comprising the Common Stock.

     H. MemoryTen understands that the Securities have not been registered under the 1933 Act, or
any state securities laws in reliance on an exemption for private offerings and no U.S. federal or
state agency has made any finding or determination as to the fairness of this investment or any
recommendation or endorsement of the offering of the Securities.

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     I. MemoryTen acknowledges that, in making the decision to accept the Securities in
satisfaction of all obligations owed by SMH to MemoryTen as set forth in the Invoices, it has
relied solely upon independent investigations made by MemoryTen.

     J. MemoryTen has the full right, power and authority to enter this Agreement and to carry out
and consummate the transactions herein. This Agreement constitutes the legal, valid and binding
obligation of MemoryTen.

     K. MemoryTen understands and agrees that SMH is relying upon the accuracy, completeness, and
truth of MemoryTen’s representations, warranties, agreements, and certifications contained in this
Agreement in establishing compliance with federal and state securities laws. MemoryTen understands
that any incomplete, inaccurate, or untruthful response, or the breach of MemoryTen’s
representations, warranties, agreements, or certifications, may result in MemoryTen 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 MemoryTen for damages. MemoryTen also
acknowledges that MemoryTen is indemnifying SMH and others for these and other losses in pursuant
to Section 7 of this Agreement.

     6. Representations and Warranties of KPO Regarding the Acquisition of the Securities and
Other Matters. KPO represents and warrants to, and agrees with SMH as follows, which
representations and warranties are true and accurate as of the date hereof and shall survive the
execution of this Agreement:

     A. KPO is acquiring the Securities for investment purposes only, and for his own account, and
is not acquiring the Securities with a view to or for the resale, distribution, subdivision or
fractionalization 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 of
the Securities for an indefinite period unless the transfer of the Securities is registered under
the 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 need
to dispose of any portion of the Shares or the Warrant to satisfy any existing or contemplated
undertaking, need or indebtedness, or to satisfy personal contingencies or obligations
necessitating a certain level of liquidity.

     C. The address set forth below on the signature page of this Agreement is KPO’s true and
correct residence, and KPO has no present intention of becoming a resident of any other state or
jurisdiction.

     D. KPO 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 KPO (i) has a
net worth that exceeds $1,000,000; or (ii) has individual income in excess of $200,000. In
addition, KPO has sufficient knowledge and experience in business and financial matters to evaluate
and has evaluated the merits and risks of this investment.

     E. KPO confirms that all documents, records and books pertaining to an investment in the
Securities that have been requested by KPO have been made available or delivered to KPO. Without
limiting the foregoing, KPO (i) has received and reviewed the draft Current Report on Form 8-K
attached hereto as Exhibit B, (ii) has reviewed, and has received copies, if desired, of
the public filings of SMH

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that are available on the Securities and Exchange Commission’s website, and (ii) has obtained
or been given access to all information concerning SMH that KPO has requested. As a result of his
review of the materials concerning SMH, KPO understands that SMH has limited operating funds and is
in need of substantial, immediate funding in order to continue operating. Further, KPO represents
that he understands that if SMH does not receive immediate capital infusions in 2008, SMH will at
least have to limit its operations severely and it may not be able to survive, and it is probable
that the Securities will have little or no value. In addition, KPO represents that it understands
that SMH will need to raise additional funding in the future, SMH has received no binding
commitment from any source for additional funding and there is no assurance that SMH will be able
to secure any additional funding in the future. The disclosure of this term and paragraph E herein
in no way obligates KPO to provide any such additional funding, unless the Parties enter into any
other 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 concerning
the terms of an investment in the Securities and to receive additional information necessary to
verify the accuracy of the information delivered to KPO.

     G. KPO further represents he is cognizant of the operations, financial condition and
capitalization of SMH, has available full information concerning SMH’s affairs to evaluate the
merits and risks of the investment in the Securities, and is aware that there is a very limited
trading market for the shares comprising the Common Stock.

     H. KPO understands that the Securities have not been registered under the 1933 Act, or any
state securities laws in reliance on an exemption for private offerings and no U.S. federal or
state agency has made any finding or determination as to the fairness of this investment or any
recommendation or endorsement of the offering of the Securities.

     I. KPO acknowledges that, in making the decision to purchase the Securities, he has relied
solely upon independent investigations made by him.

     J. KPO has the full right, power and authority to enter this Agreement and to carry out and
consummate the transactions herein. This Agreement constitutes the legal, valid and binding
obligation of KPO.

     K. The Securities constitute a speculative investment and involve a high degree of risk of
loss by KPO of KPO’s total investment. KPO represents that an investment in the Securities is a
suitable investment for him.

     L. KPO acknowledges and is aware that a legend in substantially the following form will be
imprinted on the certificates representing the Securities:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO THE HOLDER OF THE
SECURITIES (UNLESS THE ISSUER IN ITS SOLE DISCRETION DETERMINES TO USE ITS OWN
COUNSEL), 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 SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.”

     M. KPO acknowledges and is aware of the following, in addition to other information included
in the information provided to KPO:

	 	(i.)	 	There are substantial restrictions on the transferability of
the Securities. The Securities cannot be transferred, pledged, hypothecated,
sold or otherwise disposed of unless they are registered under the 1933 Act, or
an exemption from such registration is available and established to the
satisfaction of SMH; investors in SMH have no rights to compel SMH to initiate
the registration of any transfer of the Securities under the 1933 Act; there is
a limited public market for the Common Stock; and accordingly, KPO may have to
hold the Securities indefinitely; and it may not be possible for KPO to
liquidate his investment in SMH.
	 
	 	(ii.)	 	KPO understands and agrees that SMH is relying upon the
accuracy, completeness, and truth of KPO’s representations, warranties,
agreements, and certifications contained in this Agreement, in determining
KPO’s suitability as an investor in SMH and in establishing compliance with
federal 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 for
damages. KPO also acknowledges that he is indemnifying SMH and others for
these and other losses pursuant to Section 7 of this Agreement.

     7. Indemnification. Each of MemoryTen and KPO acknowledges that he or it understands
the meaning and legal consequences of the representations, warranties, agreements, and
certifications 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, its
managers, 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 this
Agreement or any other document submitted by MemoryTen or KPO in connection with this Agreement or
receipt of the Securities by either of them. The foregoing notwithstanding, nothing in this
Agreement, including the representations, warranties, agreements and certifications contained
above, shall be deemed to constitute a waiver of any rights that KPO, MemoryTen or any of the SMH
Parties 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 and
material, non-public information (as further described below) and hereby agree to safeguard such
information obtained from each other in connection with the entry into this Agreement, the
Settlement hereunder and acquisition of the Securities. In connection therewith, the Parties
further 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 of
the 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, methodologies
or trade secrets, in each case, of SMH or MemoryTen, in whatever form, from whatever source and
whenever such information is received by the other Party, shall be deemed confidential and shall be
collectively referred to in this Agreement as “Confidential Information”. Notwithstanding the
foregoing, the term “Confidential Information” shall not include information which (a) was in a
Party’s possession prior to disclosure by the other Party, (b) is independently developed by the
holding Party, (c) becomes publicly available without violation of this Agreement or by any fault
of any party, (d) becomes lawfully available from a third party, or (e) is approved for disclosure
by written authorization of the other opposing disclosing Party.

     C. All Parties agree that they are receiving the Confidential Information solely for the
purpose of reaching Settlement, evaluating SMH and the acquisition of the Securities hereunder and
that they will not at any time during such evaluation or thereafter (i) use any Confidential
Information for any other purpose or (ii) discuss, disclose or otherwise transfer any Confidential
Information 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 specific
need to know such Confidential Information. Each Party may disclose Confidential Information of
SMH to the extent required by law, subpoena or other legal process, regulatory authority or court
order, provided however, that each Party shall use their best efforts to timely provide the other
Party written notice of such required disclosure (but in no case later than five business days
prior to such requirement, and take reasonable and lawful actions to avoid and/or minimize the
extent of such disclosure.) Each Party shall take all reasonable steps to prevent unauthorized
disclosure or use of the other Party’s Confidential Information. Each Party will be responsible
for any unauthorized disclosure or misuse of the other Party’s Confidential Information by their
respective employees, agents, counsel, financial consultants and accountants.

     D. Each Party hereby agrees and acknowledges that they are aware of the United States
securities laws that prohibit any person who has received from an issuer material, non-public
information concerning the matters which are the subject of this Agreement from purchasing or
selling securities of such issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell
such securities. Each Party agrees that they shall adhere to all securities law requirements
concerning the transfer of material non-public information to others and the purchase and sale of
securities 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, with
no 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 the
other 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 all
documents and materials (including any permitted copies) containing Confidential Information of the
other Party, and to destroy or delete all documents and materials containing Confidential
Information 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 by
bankruptcy, 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 in
bankruptcy, or by either Party as a debtor-in-possession or the equivalent of any of the foregoing
under local law.

     H. Each Party agrees that monetary damages may not be a sufficient remedy for any threatened
or 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 relief
and/or specific performance to remedy or prevent any threatened or actual breach of the provisions
of this Section 7.

     9. Miscellaneous.

     A. This Agreement is intended to be and is an accommodation between the Parties and shall not
be construed as an admission by any party of any claim or affirmative defense asserted by any other
Party, nor shall this Agreement be construed as a waiver, modification, or retraction of the
positions 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 the
Parties’ previously stated legal positions. Each Party has received independent legal advice from
their respective attorneys with respect to the advisability of making the settlement provided for
herein and with respect to the advisability of executing this Agreement. No Party relies or has
relied on any statement, representation, omission, inducement, or promise of any other Party (or
any officer, agent, employee, representative, or attorney for any other party) in executing this
Agreement, or in making the Settlement provided for herein, except as expressly stated in this
Agreement. Each Party to this Agreement has investigated the facts pertaining to this Settlement
and this Agreement, and all matters pertaining thereto, to the full extent that Party deems
necessary. Each Party has carefully read and reviewed with their own respective attorneys, and
knows and understands, the full contents of this Agreement and is voluntarily entering into this
Agreement upon the advice of that Party’s attorneys.

     C. The Parties acknowledge that they may have transactions between them other than the
transactions evidenced by the Invoices. The Parties agree that this Agreement pertains only to the
Invoices and shall not affect the Parties’ rights one against the other as to claims or rights not
arising out of, connected with or related to the Invoices as defined in this Agreement, except as
provided herein.

     D. Each of the Parties hereto agrees to bear their own costs, attorneys’ fees, and other
expenses associated with the dispute between the Parties hereto.

     E. No amendments or variations of the terms of this Agreement shall be valid unless made in
writing and signed by all Parties hereto.

     F. This Agreement may be executed in one or more counterparts all of which taken together
shall constitute a single instrument.

     G. This Agreement shall be governed and construed as binding upon the Parties hereto, and
their 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 their
respective heirs, successors, assigns, receivers, and trustees.

     H. No amendments or variations of the terms of this Agreement shall be valid unless made in
writing and signed by all Parties hereto.

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     I. This Agreement is fully integrated, and constitutes the entire agreement and understanding
between and among the Parties with respect to the matters addressed herein and, except as set forth
in this Agreement, no representations, warranties or promises have been made or relied upon by the
Parties to this Agreement.

     J. This Agreement will be construed and enforced in accordance with and governed by the laws
of the State of Colorado, except for matters arising under the 1933 Act, without reference to
principles of conflicts of law.

     K. No waiver by either Party of any provision or any breach of this Agreement constitutes a
waiver of any other provision or of any other breach of this Agreement, and no waiver shall be
effective unless made in writing. The right of each Party to require strict performance and
observance 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 Agreement
modified 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 dates
set forth below to be effective as of April ___, 2008.

	 	 	 	 	 	 	 
	SILICON MOUNTAIN HOLDINGS, INC., a
Colorado corporation	 	MEMORYTEN, Inc., a California corporation
	 
	 	 	 	By:	 	 
	 
	 	 	 	 	 
	By:
	 	 	 	 	Kenneth P. Olsen, President

	 
	 	 	 	 	 
	 
	 	Rudolph A. (Tré) Cates, III, President and
Chief Executive Officer	 	 	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	Date:	 	 
	 
	 	 	 	 	 
	 
	 	 	 	Address:	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	Kenneth P. Olsen, Individually

	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Date:	 	 
	 
	 	 	 	 	 
	 
	 	 	 	Address:	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

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EXHIBIT A

Form of Warrant

[To be attached.]

 

 

EXHIBIT B

Draft 8-K Disclosing Laurus Amended and Restated Overadvance Letter Agreement

[To be attached.]exv10w21

Exhibit 10.21

FORM OF WARRANT

THIS WARRANT HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS
THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THIS WARRANT MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933
ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS
TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY THROUGH REASONABLE MEANS AS DETERMINED BY THE
COMPANY, INCLUDING AN OPINION OF SELLER’S COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY.

SILICON MOUNTAIN HOLDINGS, INC.

WARRANT

			
	Warrant to Purchase Shares of 

Common Stock 

Warrant No. ___
	 	April ___, 2008

Number of Shares: 89,284

(Subject to adjustment)

     This certifies that pursuant to the terms of this Common Stock Warrant (this “Warrant”), for
value received, Silicon Mountain Holdings, Inc., a Colorado corporation (the “Company”), hereby
grants to MemoryTen, Inc. (the “Holder”), or its registered assigns, the right to purchase from the
Company a number of shares of the Company’s common stock, $.001 par value per share, (“Common
Stock”) at a purchase price of $.01 per share (the “Exercise Price”) pursuant to that certain
Release and Settlement Agreement, dated April ___, 2008 (the “Settlement Agreement”). All
capitalized terms not defined herein shall have the meanings given to them in the Subscription
Agreement.

     1. Exercise of Warrant.

     1.1 Exercise Period.

               (a) Except as restricted as set forth in Section 1.3 below, Holder may exercise this Warrant,
in whole or in part, at any time and from time to time commencing on the date hereof and prior to
5:00 p.m. (central standard time) on April ___, 2010 (the “Expiration Date”);

 

 

     1.2 Procedure for Exercising Warrant.

     (a) This Warrant will be deemed to have been exercised at such time as the
Company has received all of the following items (the “Exercise Date”):

     (i) A completed Exercise Agreement, in substantially the form set forth
in Exhibit A hereto and as described in Section 1.4 below, executed
by the person exercising all or part of the purchase rights represented by
this Warrant (the “Purchaser”);

     (ii) This Warrant;

     (iii) If this Warrant is not registered in the name of the Purchaser,
an Assignment in the form set forth in Exhibit B, evidencing the
assignment of this Warrant to the Purchaser and the consent of the Company
thereto; and

     (iv) A check payable to the Company in an amount equal to the product
of the Exercise Price multiplied by the number of shares of Common Stock
being purchased upon such exercise.

     (b) Certificates representing shares of Common Stock purchased upon exercise of
this Warrant will be delivered by the Company to the Purchaser within 10 days after
the Exercise Date. Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, Company will prepare a new Warrant,
substantially identical hereto, representing the rights formerly represented by this
Warrant which have not expired or been exercised. The Company will deliver such new
Warrant to the person designated to receive it in the Exercise Agreement.

     (c) The Common Stock issuable upon the exercise of this Warrant will be deemed
to have been issued to the Purchaser on the Exercise Date, and the Purchaser will be
deemed for all purposes to have become the record holder of such Common Stock on the
Exercise Date.

     (d) The issuance of certificates for shares of Common Stock upon exercise of
this Warrant will be made without charge to the Holder or the Purchaser for any
issuance tax in respect thereof or any other cost incurred by the Company in
connection with such exercise and the related issuance of shares.

     1.3 Net Exercise. Notwithstanding any provisions herein to the contrary, if
the fair market value of one share of the Company’s Common Stock is greater than the
Exercise Price (at the date of calculation as set forth below), in lieu of exercising this
Warrant by payment of cash, the Holder may elect (the “Conversion Right”) to receive shares
equal to the value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company together with
the properly endorsed Notice of Exercise in which event the Company shall

2

 

issue to the Holder a number of shares of Common Stock computed using the following
formula:

	 	 	 
	 

	 	X = Y (A-B)
	 

	 	               A
	 
	 	 
	Where X =

	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 
	Y =

	 	the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being canceled (at the date of such calculation)
	 
	 	 
	A =

	 	the fair market value of one share of the Company’s Common
Stock (at the date of such calculation)
	 
	 	 
	B =

	 	Exercise Price (as adjusted to the date of such calculation)

For purposes of the above calculation, the fair market value of one share of Common Stock shall be
determined based on the following:

     (a) if this Warrant is exercised in connection with an initial public offering
of Common Stock, then the fair market value of one share of Common Stock shall be
the price that one share of Common Stock is offered to the public in such initial
public offering; and

     (b) if the Common Stock is traded on a national securities exchange or admitted
to unlisted trading privileges on such an exchange, or is listed on the National
Market System (the “National Market System”) of the Nasdaq, the fair market value of
one share of Common Stock as of a specified day shall be the last reported sale
price of Common Stock on such exchange or on the National Market System on such date
or if no such sale is made on such day, the mean of the closing bid and asked prices
for such day on such exchange or on the National Market System. If the Common Stock
is not so listed or admitted to unlisted trading privileges, the fair market value
of one share of Common Stock as of a specified day shall be the mean of the last bid
and asked prices reported on such date by the Nasdaq or, if reports are unavailable
from Nasdaq, then by the National Quotation Bureau Incorporated. If the Common
Stock is not so listed or admitted to unlisted trading privileges and bid and ask
prices are not reported, the fair market value of one share of Common Stock as of a
specified day shall be determined in good faith by the Board of Directors of the
Company, taking into account the most recently or concurrently completed arm’s
length transaction between the Company and an unaffiliated third party the closing
of which occurs within the six months preceding or on the date of such calculation,
if any.

     1.4 Exercise Agreement. The Exercise Agreement will be substantially in the
form set forth in Exhibit A hereto, except that if the shares of Common Stock are
not to be issued in the name of the Holder, the Exercise Agreement will also state the name
of the person to whom the certificates representing the shares of Common Stock are to be
issued, and if the number of shares of Common Stock to be issued does not include all the

3

 

     shares of Common Stock purchasable hereunder, it will also state the name of the person
to whom a new Warrant for the unexercised portion of the rights hereunder is to be
delivered.

     1.5 Fractional Shares. The Company is not required to issue any fraction of a
share of Common Stock upon exercise of this Warrant. If the Company elects not to issue
fractional shares hereunder, the Company shall pay cash consideration in lieu of any
fractional shares that would otherwise have been issued hereunder but for the preceding
sentence.

     1.6 Securities Acts Compliance. As a condition to its delivery of the
certificates representing the Common Stock, the Company may require the Purchaser to deliver
to the Company, in writing, representations regarding the Purchaser’s sophistication,
accredited investor status (as defined in Rule 501 of Regulation D promulgated by the U.S.
Securities and Exchange Commission), investment intent, acquisition for his, her or its own
account and such other matters as are reasonable and customary for purchasers of securities
in an unregistered private offering, and Company may place conspicuously upon each
certificate representing the Common Stock a legend restricting the assignment, transfer or
other disposition of the shares of Common Stock, unless such shares have been registered or
qualified under the Act and applicable blue sky laws or there has been delivered to the
Company an opinion of counsel, satisfactory to the Company, to the effect that such
registration and qualification is not required.

     2. Adjustment in Shares of Common Stock and Exercise Price. The number of shares of
Common Stock purchasable upon the exercise of this Warrant and the Exercise Price per share are
subject to adjustment from time to time as provided in this Section 2; provided,
however, that the Exercise Price per share will not be less than $.001 per share.

     2.1 Subdivision or Combination of Shares. If the Company at any time
subdivides its outstanding shares of Common Stock into a greater number of shares (including
a stock split effected as a stock dividend) or combines its outstanding shares of Common
Stock into a lesser number of shares, the number of shares issuable upon exercise of this
Warrant will be adjusted to such number as is obtained by multiplying the number of shares
issuable upon exercise of this Warrant immediately prior to such subdivision or combination
by a fraction, the numerator of which is the aggregate number of shares of Common Stock
outstanding immediately after giving effect to such subdivision or combination and the
denominator of which is the aggregate number of shares of Common Stock outstanding
immediately prior to such subdivision or combination, and the Exercise Price will be
correspondingly adjusted to such amount as will, when multiplied by the number of shares
issuable upon full exercise of this Warrant (as increased or decreased to reflect each
subdivision or combination of outstanding shares of Common Stock, as the case may be), equal
the product of the Exercise Price in effect immediately prior to such subdivision or
combination multiplied by the number of shares issuable upon exercise of this Warrant
immediately prior to such subdivision or combination.

4

 

     2.2 Effect of Sale, Merger or Consolidation. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger of the
Company with another corporation, or sale of all or substantially all of the Company’s
assets to another corporation, is effected after the date hereof in such a way that holders
of Common Stock will be entitled to receive stock, securities or assets with respect to or
in exchange for Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, lawful and adequate provision will be made whereby the Holder
will thereafter have the right to purchase and receive, upon the basis and the terms and
conditions specified in this Warrant and in lieu of the shares immediately theretofore
purchasable and receivable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange for a number
of outstanding shares of Common Stock equal to the number of shares of Common Stock
immediately theretofore purchasable and receivable upon the exercise of this Warrant, and in
any such case appropriate provision will be made with respect to the rights and interests of
the Holder to the end that the provisions of this Warrant (including, without limitation,
provisions for adjustments of the Exercise Price and of the number of shares issuable upon
the exercise of this Warrant) will thereafter be applicable, as nearly as may be possible,
in relation to any shares of stock, securities or assets thereafter deliverable upon the
exercise of this Warrant. Except for the transactions contemplated by the Stock Exchange
Agreement (as described below), the Company will not effect any such consolidation, merger
or sale unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets assumes, by written instrument executed and delivered to
the Holder at its last address appearing on the books of the Company, the obligation to
deliver to the Holder such shares of stock, securities or assets as, in accordance with the
foregoing sentence, the Holder may be entitled to purchase.

     2.3
[Intentionally Omitted.]

     2.4 [Intentionally Omitted.]

     2.5 [Intentionally Omitted.]

     2.6 Warrants Not Callable. The Warrants are not callable.

     2.7 Notice to Holder of Adjustment. Whenever the number of shares purchasable
upon exercise of this Warrant or the Exercise Price is adjusted as herein provided, the
Company will cause to be mailed to the Holder notice setting forth the adjusted number of
            shares purchasable upon the exercise of the Warrant and the adjusted Exercise Price and
showing in reasonable detail the computation of the adjustment and the facts upon which such
adjustment is based.

     3. Prior Notice as to Certain Events. In the event the Company pays any dividend
payable in cash or stock upon its Common Stock or makes any distribution to the holders of its
Common Stock, then the Company will give prior written notice, by first class mail, postage
prepaid, addressed to the Holder at the address of such holder as shown on the books of the

5

 

Company, of the date on which the books of the Company will close or a record taken for such
dividend or distribution. Such notice will also specify the date as of which the holders of the
Common Stock of record will participate in said dividend or distribution. Such written notice will
be given not less than 20 days prior to the record date in respect thereto. Notwithstanding the
rights established in Section 3, the Warrants are subject to restrictions on exercise as set forth
in Section 1.3.

     4. Reservation of Common Stock. Not later than the date hereof, the Company will have
authorized Common Stock in an amount sufficient to permit the exercise in full of this Warrant. At
all times from and after such date, the Company will reserve and keep available for issuance upon
the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will
be sufficient to permit such exercise. Upon issuance, in accordance with the terms of this
Warrant, such shares of Common Stock will be validly issued, fully paid and nonassessable.

     5. No Voting Rights; Limitations of Liability. This Warrant does not confer upon the
holder hereof any voting rights or other rights as a stockholder of the Company, either at law or
equity. The rights of the Holder are limited to those expressed herein and the Holder by
acceptance hereof, consents to and agrees to be bound by and to comply with all the provisions of
this Warrant. No provision of this Warrant, in the absence of affirmative action by the Holder to
purchase Common Stock, and no enumeration in this Warrant of the rights or privileges of the
Holder, will give rise to any liability of such Holder for the Exercise Price of Common Stock
purchasable by exercise hereof or as a stockholder of Company.

     6. Restrictions on Transfer of Warrant.

     (a) This Warrant and the Holder’s rights hereunder may be transferred, assigned
or subjected to a pledge or security interest without the prior written consent of
the Company; provided that any transfer or assignment hererof shall be effected by
the surrender of this Warrant with a properly executed Assignment (in the form of
Exhibit B hereto) at the principal office of the Company. If the Company
determines that the proposed assignment is permitted pursuant to the requirements of
applicable securities law, the Company will register the assignment of this Warrant
in accordance with the information contained in the Assignment and will, without
charge, execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees named in such assignment instrument and this Warrant will promptly be
cancelled. In connection with such an assignment the Company may require as
conditions to the transfer of this Warrant or any portion thereof that (i) the
Holder deliver to the Company an opinion of counsel, reasonably satisfactory in form
and substance to the Company’s counsel, to the effect that the proposed transfer
will not be in violation of the Act or of any applicable state law and that (ii) the
proposed transferee deliver to the Company his, her or its written agreement to
accept and be bound by all of the terms and conditions of this Warrant, including
compliance with Section 1.6 of this Warrant; provided that the Company hereby
consents to the assignment of all or any portion of this warrant to the Company’s
employees, advisors and consultants without such an opinion of counsel. The date
the

6

 

Company initially issues this Warrant will be deemed to be the “Date of
Issuance” of this Warrant regardless of the number of times new certificates
representing the unexpired and unexercised rights formerly represented by this
Warrant are issued.

     (b) The Holder acknowledges that this Warrant has not been registered under the
Act, and, except in the limited instance described in Section 6(a) above, agrees not
to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Common Stock issued upon its exercise in the absence of (i) an
effective registration statement as to this Warrant or such Common Stock under the
Act, or (ii) an opinion of counsel for Company to the effect that such registration
is not, under the circumstances, required.

     7. Miscellaneous.

     7.1 Waiver. No delay or failure of the Holder in exercising any right, power,
privilege or remedy under this Warrant will affect such right, power, privilege or remedy or
be deemed to be a waiver of the same or any part thereof, nor will any single or partial
exercise thereof or any failure to exercise the same in any instance preclude any further or
future exercise thereof, or the exercise of any other right, power, privilege or remedy.

     7.2 Notices. All notices, requests and consents hereunder must be in writing.
Notices, requests and consents to the Company will be effectively given and delivered (i)
upon personal delivery, or delivery via overnight courier or (ii) upon the third business
day after deposit in the United States mail, by certified or registered mail, postage
prepaid and addressed as follows to the Company at its offices at 4755 Walnut Street,
Boulder, CO 80301. Notices, requests, and consents to the Holder will be effectively given
and delivered when sent by facsimile or mailed by first class mail, postage prepaid, or sent
by overnight courier, to the Holder at the facsimile number or address of the Holder
appearing on the books and records of the Company. Either party by notice to the other may
from time to time change the facsimile number or address for any such notice, request, or
consent.

     7.3 Governing Law; Venue. This Warrant and all rights and obligations
hereunder, including matters of construction, validity, and performance, will be governed by
and construed and interpreted in accordance with the laws of the State of Colorado, without
regard to the choice or conflicts of laws rules of such state. The parties agree that venue
for any suit, action, proceeding or litigation arising out of or in relation to this
Agreement will be in any federal or state court in the State of Colorado having subject
matter jurisdiction.

     7.4 Successors. This Warrant will inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.

     7.5 Headings and Exhibits. The headings used in this Warrant are for
convenience only and will not constitute a part of this Warrant. All of the exhibits
attached hereto are incorporated herein and made a part of this Warrant by reference
thereto.

7

 

[Signature Page Follows]

8

 

     IN WITNESS WHEREOF, this Warrant has been executed and delivered by a duly authorized
representative of the Company on the day and year first above written.

	 	 	 	 	 
	 	SILICON MOUNTAIN HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Rudolph (Tré) Cates, III 	 
	 	 	President and Chief Executive Officer 	 
	 

 

 

EXHIBIT A

Exercise Agreement

			
	To: Silicon Mountain Holdings, Inc.
	 	Dated:                                         

     The undersigned, pursuant to the provisions set forth in the within Warrant, hereby agrees to
subscribe for and purchase ___shares of the Common Stock covered by such
Warrant and makes payment herewith in full for such Common Stock at the price per share provided by
such Warrant.

     The undersigned requests that a certificate for the shares of Common Stock be issued as
follows:

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 

and, if said number of shares is not all the shares of Common Stock purchasable hereunder, that a
new Warrant for the balance of the remaining shares of Common Stock purchasable under the within
Warrant be registered in the name of, and delivered to, the undersigned at the address stated
below:

	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	HOLDER:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature:	 	 
	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT B

Assignment

     To be executed by the registered Holder to request a permitted transfer of the attached
Warrant.

	 	 	 
	FOR VALUE RECEIVED
	 	 
	 
	 	 
	 

	 	(“Assignor”)
	 	 	 
	 
	 	 
	hereby sells, assigns and transfers unto
	 	 
	 
	 	 
	 

	 	(“Assignee”)
	 	 	 
	(Name)
	 	 
	 
	 	 
	 	 	 
	(Address)
	 	 
	 
	 	 
	 	 	 

the right to purchase shares of Common Stock of Silicon Mountain Holdings, Inc. evidenced by the
attached Warrant, together with all right, title and interest therein, and does irrevocably
constitute and appoint ___attorney to transfer the said right on the books
of said corporation with full power of substitution in the premises.

	 	 	 	 	 	 	 
	Date:

	 	 	 	Assignor:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	APPROVED:	 	SILICON MOUNTAIN HOLDINGS, INC.
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Its	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature

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