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
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Warrant to Purchase Shares of
Common Stock
Warrant No. ___ |
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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
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issue to the
Holder a number of shares of Common Stock computed using the
following formula:
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X = Y (A-B) |
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A |
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Where X =
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the number of shares of Common Stock
to be issued to the Holder |
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Y =
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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) |
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A =
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the fair market value of one share of
the Company’s Common Stock (at the date of such
calculation) |
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B =
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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
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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, s
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