Exhibit 10.3
 
 
WARRANT PURCHASE AGREEMENT

WARRANT PURCHASE AGREEMENT (this "Agreement"), made and entered as of March 31,
2011 (the "Effective Date"), by and between Verecloud, Inc., a Nevada
corporation (the "Company"), and The Mesa Group, Inc., a Texas corporation
("Purchaser").

WITNESSETH:

WHEREAS, the Company and Purchaser are parties to that certain Consulting
Agreement dated June 10, 2010 (the "Consulting Agreement"), pursuant to which
Purchaser provides the Company with certain consulting services;

WHEREAS, concurrent with the date hereof, the Company and Purchaser have
executed an amendment to the Consulting Agreement (the "First Amendment"),
pursuant to which Purchaser has agreed to (i) extend the consulting period
during which services will be rendered, and (ii) defer the beginning date for
the payments to Purchaser as the “Consultant” thereunder, all as set forth in
the First Amendment; and

WHEREAS, in connection with the First Amendment, the Company has agreed to and
desires to issue and sell, and Purchaser desires to purchase, all upon the terms
and subject to the conditions set forth in this Agreement, a warrant to purchase
10,000,000 shares of the Company's common stock, par value $.001 ("Common
Stock") in substantially the form attached hereto as Exhibit A (the "Warrant").

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements of the parties herein contained, the parties hereby agree as follows:

1.           Purchase and Sale of Warrant.

1.1           Sale and Issuance of Warrant.  Subject to the terms and conditions
of this Agreement, the Company shall issue to Purchaser, the Warrant, upon
execution of this Agreement by the parties hereto.

2.           Representations and Warranties of the Company.  The Company
represents, warrants and covenants to Purchaser as follows:

2.1           Corporate Status.  The Company is a corporation duly incorporated,
validly existing, and in good standing under the laws of the State of Nevada,
and has all requisite corporate power and authority to own, operate and lease
its properties and to carry on its business as and in the places where such
properties are now owned, operated and leased or such business is now being
conducted.
 
2.2           Authorization; Validity.  When executed and delivered by the
Company, this Agreement and the Warrant will constitute the valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting the enforcement of creditors' rights generally and general
principles of equity.  Upon issuance, the shares of Common Stock issued by the
Company upon exercise of the Warrant (the "Conversion Shares") shall be duly
authorized, validly issued, fully paid and non-assessable, and free of any liens
or encumbrances or preemptive rights, except for restrictions on transfer under
the securities laws and any agreement to which the holder of the Conversion
Shares becomes a party.
 
 
 
 
 

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2.3           No Conflict.  The execution, delivery and performance of this
Agreement and the Warrants and the issuance of the Conversion Shares do not and
will not violate any material agreements to which the Company is a party.
 
2.4           Approvals and Consents.  No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental board, agency,
commission, bureau, or instrumentality is necessary or required as to the
Company in order for this Agreement to constitute a valid, binding and
enforceable obligation of the Company in accordance with its terms.
 
2.5           Authorization and Reservation of Conversion Shares.  The Company
shall authorize and reserve sufficient shares of Conversion Shares to enable the
exercise of the Warrant.
 
3.           Representations and Warranties of Purchaser.  Purchaser hereby
represents and warrants to the Company as follows:

3.1           Authorization.  This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally and general principles of equity.

3.2           Purchase Entirely for Own Account.  This Agreement is made with
Purchaser in reliance upon Purchaser’s representation to the Company, which by
such Purchaser’s execution of this Agreement, Purchaser hereby confirms, that
the Warrant and the Conversion Shares (collectively, the "Securities") will be
acquired for investment for such Purchaser’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same.  By executing this
Agreement, Purchaser further represents that Purchaser does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Securities.

3.3           Reliance on Representations.  Purchaser understands that the
Securities are not registered under the Securities Act of 1933, as amended (the
"Act") on the grounds that the sale provided for in this Agreement and the
issuance of Securities hereunder is exempt from registration under the Act
pursuant to Section 4(2) thereof and Rule 506 of Regulation D promulgated
thereunder, and that the Company’s reliance on such exemption is predicated on
Purchaser’s representations set forth herein.
 
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3.4           Disclosure of Information.  Purchaser believes it has received all
the information it considers necessary or appropriate for deciding whether to
purchase the Warrant.  Purchaser further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the Warrant and the business, assets, prospects and
financial condition of the Company.  The foregoing, however, does not limit or
modify the representations and warranties of the Company in Section 2 of this
Agreement or the right of Purchaser to rely thereon.

3.5           Investment Experience.  Purchaser is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of Purchaser’s investment, and has such
knowledge and experience in financial or business matters that Purchaser is
capable of evaluating the merits and risks of the investment in the
Securities.  Purchaser also represents it has not been organized for the purpose
of acquiring the Securities.

3.6           Accredited Purchaser.  Purchaser is an "accredited investor"
within the meaning of Securities and Exchange Commission (the "SEC") Rule 501 of
Regulation D, as presently in effect.

3.7           Restricted Securities.  Purchaser understands that the Securities
it is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act, only in certain limited circumstances.  In this connection, Purchaser
represents that it is familiar with SEC Rule 144, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.

3.8           Further Limitations on Disposition.  Without in any way limiting
the representations set forth above, Purchaser further agrees not to make any
disposition of all or any portion of the Securities unless and until:
 
(a)           there is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such Registration Statement and any applicable requirements of state
securities laws; or
 
(b)           (i) Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition and (ii) if reasonably
requested by the Company, Purchaser shall have furnished the Company with an
opinion of counsel at Purchaser’s expense, reasonably satisfactory to the
Company, that such disposition will not require registration of such shares
under the Act or the consent of or permit from appropriate authorities under any
applicable state securities law.  It is agreed that the Company will not require
opinions of counsel from Purchaser for transactions made pursuant to Rule 144,
except in unusual circumstances.
 
(c)           Notwithstanding the provisions of Subsections (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by Purchaser to an “Affiliate” of Purchaser, as such term is defined in
Rule 501(b) of Regulation D, if the transferee or transferees agree in writing
to be subject to the terms hereof to the same extent as if they were the
original Purchaser hereunder.
 
 
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3.9           Legends.  It is understood that the certificates evidencing the
Securities may bear one or more legends referring to the restrictions on
transfer imposed by applicable securities laws.

4.           General Provisions.

4.1           Entire Agreement; Amendment and Waiver.  This Agreement and the
Warrant constitute the entire agreement between the parties hereto with respect
to the subject matter contained herein and supersede all prior oral or written
agreements, if any, between the parties hereto with respect to such subject
matter.  Any amendments hereto or modifications hereof must be made in writing
and executed by the Company and Purchaser.

4.2           Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given (a) five days after deposit with the
U.S. Postal Service or other applicable postal service, if delivered by
certified first class mail, postage prepaid, (b) upon delivery, if delivered by
hand, (c) one business day after the business day of deposit for overnight
delivery with Federal Express or similar overnight courier, freight prepaid, or
(d) one day after the business day of delivery by facsimile transmission with
oral confirmation of receipt, if deliverable by facsimile transmission, with
copy by first class mail, postage prepaid, and shall be addressed, if to
Purchaser, at Purchaser’s address as set forth on the signature page to this
Agreement, and, if to the Company, at the address of its principal corporate
offices (attention:  Secretary), or at such other address as such party may
designate by five days’ advance written notice to the other parties hereto.

4.3           Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Colorado without giving effect to
conflict of laws principles.

4.4           Headings.  The headings or captions contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

4.5           Severability.  If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by virtue of any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party.  Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the maximum extent
possible.
 
 
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4.6           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.

[Signature Page Follows]
 
 
 
 
 
 
 
 
 
 
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    IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
 
 

  COMPANY:
 
VERECLOUD, INC., a Nevada Corporation
         
 
By:
/s/ John F. McCawley       Name:  John F. McCawley       Title:  Chief Executive
Officer  

 
 

  Address: 6560 S. Greenwood Plaza Blvd., Suite 400
Englewood, Colorado 80111
Fax:  (303) 221-0917
Attention:  Mike Cookson
            with a copy to (which shall not service as notice):              
Brownstein Hyatt Farber Schreck, LLP
410 17th Street, Suite 2200
Denver, Colorado 80202
Fax:  (303) 223-1111
Attention:  Adam J. Agron
 

 

 
 

  PURCHASER:
 
THE MESA GROUP, INC., a Texas corporation
         
 
By:
/s/ Scott M. Schwartz       Name:  Scott M. Schwartz       Title:  Chairman and
Chief Executive Officer  

 
 

  Address:
7598 N. Mesa Street, #205
El Paso, Texas 79912
Fax:  (915) 845-4040
Attention:  Scott Schwartz
            with a copy to (which shall not service as notice):              
Scott HulsePC
1100 Chase Tower
201 Main Street
El Paso, Texas 79901
Fax:  (915) 546-8333
Attention:  W. David Bernard, Esq.
 

 
 
[Signature Page to Warrant Purchase Agreement]
 
 
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EXHIBIT A

FORM OF WARRANT