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
res
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