Document:

ex10x1.htm

    Exhibit 10.1

     

     

    
      
        
LOAN AGREEMENT

      

      
         

        THIS LOAN AGREEMENT (the
"Loan Agreement"),
dated effective June 10, 2010, governed by and construed in accordance with the
laws of the State of Colorado and performable in Arapahoe County, Colorado, is
made by and between TMG HOLDINGS COLORADO, LLC, a Texas limited liability
company, hereinafter referred to as "Lender," whose address is 7598 N. Mesa
Street, Suite 205, City of El Paso, El Paso County, Texas 79912 and VERECLOUD,
INC., a Nevada corporation, hereinafter referred to as "Borrower," whose address
is 6560 S. Greenwood Plaza Blvd., Suite 400, Englewood, Colorado
80111.

         

      

      
        
ARTICLE I

        DEFINITIONS

      

      
         

        For
purposes of this Loan Agreement, the following terms shall have the respective
meanings assigned to them.

         

        1.01           Advance. The term "Advance" shall
mean a disbursement by Lender of the proceeds of the Loan.

      

       

      1.02           Borrower. The terms "Borrower" shall
mean all parties named as Borrower in the first paragraph of this Loan
Agreement.

       

      1.03           Code. The term "Code" shall mean
the Uniform Commercial Code as in force in the State of Colorado.

       

      1.04           Debtor
Relief Laws. The
term "Debtor Relief Laws" shall mean any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization, or similar laws affecting the rights or remedies of creditors
generally, as in effect from time to time.

       

      1.05           Event of
Default. The term
"Event of Default" shall mean:

       

      (a)  A failure
by Borrower to make any payment of principal or interest on the Note within five
(5) days of when due;

       

      (b)  A failure
by Borrower to comply with any of the other terms or conditions specified herein
or in the Note, the Security Agreement, other Security Instruments (as later
defined herein), or any other written agreement between (i) Borrower and (ii)
Lender or any affiliate of Lender within thirty (30) days after the date of
written notice from Lender to Borrower.

       

      (c)  Any false
or inaccurate material representation or warranty made by Borrower to Lender in
any of the Security Instruments;

       

      (d)  The
appointment of a receiver, trustee, conservator, or liquidator of Borrower or of
any property of Borrower;

       

      (e)  The
filing by or against Borrower of a voluntary petition in bankruptcy, seeking
reorganization or rearrangement or taking advantage of any Debtor Relief Laws,
or an answer by Borrower admitting the material allegations of a petition filed
against Borrower in any bankruptcy, reorganization, insolvency, conservatorship,
or similar proceeding, or an admission by Borrower in writing of an inability to
pay its debts as they become due;

      

      
        (f)  The
making by Borrower of a general assignment for the benefit of
creditors;

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (g)  The entry
of an order, judgment or decree by any court of competent jurisdiction
adjudicating Borrower as bankrupt or insolvent, or approving a petition seeking
reorganization of Borrower or an arrangement of its debts, or appointing a
receiver, trustee, conservator, or liquidator of Borrower or of any property of
Borrower; and/or

      

       

      (h)  The
liquidation, termination, or dissolution of Borrower.

       

      1.06           Financing
Statements. The
term "Financing
Statements" shall mean the Form UCC financing statements securing the
Loan, to be filed with the appropriate offices for the perfection of a security
interest in any of the Property.

       

      1.07           Governmental
Authority. The
terms "Governmental
Authority" shall mean the United States, the State of Colorado, the
County of Arapahoe, the City of Englewood, or any other political subdivision in
which the Property is located, and any other political subdivision, agency, or
instrumentality exercising jurisdiction over Borrower or the
Property.

      
         

        1.08           Governmental
Requirements. The
term "Governmental
Requirements" shall mean all laws, ordinances, rules, and regulations of
any Governmental Authority applicable to Borrower or the Property.

         

        1.09           Lender. The term "Lender" shall mean the
Lender named in the first paragraph of this Loan Agreement.

         

        1.10           Loan. The term "Loan" shall mean
the loan by Lender to Borrower in the original principal amount not to exceed
ONE MILLION FIVE HUNDRED SIXTY-FOUR THOUSAND AND N0/100THS UNITED STATES DOLLARS
(U.S. $1,564,000.00).

      

       

      1.11           Note. The term "Note" shall mean the
Revolving Credit Note from Borrower to Lender dated of even date herewith in the
amount of and evidencing the Loan.

       

      1.12           Property. The term "Property" shall mean all
the tangible and intangible assets of Borrower, now or hereafter acquired, as
described in the Security Agreement.

       

      1.13           Security
Agreement. The
term "Security
Agreement" shall mean the Security Agreement, between Borrower and
Lender, dated of even date herewith.

       

      1.14           Security
Instruments. The
term "Security
Instruments" shall mean this Loan Agreement, the Note, the Security
Agreement, the Financing Statements, and such other instruments evidencing,
securing or pertaining to the Loan as shall, from time to time, be executed and
delivered by or on behalf of Borrower to Lender pursuant to this Loan
Agreement.

       

      

      
        ARTICLE
II

      

      
        LOAN
TERMS AND AGREEMENTS

      

      
        

        2.01           Commitment
of Lender.
Subject to the terms of this Agreement, Lender will make the Loan to Borrower.
Lender has no obligation to make Advances which exceed the Loan.

         

        2.02           Collateral. The Note shall be secured by
the Security Agreement and all of the other Security Instruments, as
applicable.

      

       

       

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      2.03           Interest. The Loan will bear interest
at the per annum rate of interest stated in the Note. If at any time the per
annum interest rate stated in the Note exceeds the maximum rate allowed by
applicable law, the rate of interest on the Loan will be the maximum rate of
interest allowed by applicable law. All amounts due to Lender in connection with
the Loan Documents will bear interest from their respective due dates until paid
at the past due rate set forth in the Note. Interest at the per annum interest
rate set forth in the Note will be computed on the basis of a 360 day year for
the actual number of days elapsed, unless that calculation would result in an
effective rate exceeding the maximum rate allowed by applicable law, in which
case interest will be computed on the basis of a 365 or 366 day year, as the
case may be.

       

      2.04           Priority. The lien or liens on the
Property securing the Note described hereinabove are a first lien and prior to
any other encumbrances thereon.

       

      2.05           Conditions
Precedent.

       

      (a)           Initial Advance.
Lender shall not be required to make the initial Advance under the Loan until
the following conditions are satisfied:

       

      (i)           All
of the Borrower's covenants specified herein have been performed, or waived by
Lender, in whole or in part, and Borrower shall otherwise be in compliance with
all of its obligations hereunder and under any other agreements between Borrower
and Lender or any affiliates of Lender.

       

      (ii)           Borrower
shall have furnished to Lender or its counsel any and all documents, instruments
and other certificates, papers, resolutions, etc. required by Lender or its
counsel as a condition to making the initial Advance.

       

      (iii)          Borrower
shall have executed this Loan Agreement, the Note, the Security Agreement, the
Financing Statements, and all other instruments and documents required by Lender
to evidence the Loan. Borrower shall have provided evidence to Lender that the
Note Purchase Agreement between Borrower and the Burkes has been executed and
will be consummated in full simultaneously with such initial
Advance.

       

      (b)           Subsequent Advances.
Lender shall not be required to make any subsequent Advances after the initial
Advance hereunder unless all of the following conditions are
satisfied:

       

      (i)           All
of the conditions of Section 2.05(a) shall be satisfied, including, without
limitation, any conditions waived in whole or in part by Lender at the time of
the initial Advance.

       

      (ii)           There
shall be no uncured Event of Default.

       

      (iii)         All
legal matters incident to the making of such subsequent Advances shall be
satisfactory to Lender and its counsel.

       

      2.06           Notice
and Manner of Borrowings. To obtain an Advance under
the Note for all Advances other than the initial Advance, Borrower must deliver
a written request to Lender in the form of Exhibit A hereto at least five (5)
business days prior to Borrower's requested date of funding. Any Advance made
after such request shall be conclusively presumed to have been made under the
terms of the Note to or for the benefit of Borrower when made in accordance with
Borrower's written request.

       

       

       

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        2.07           Voluntary
Prepayments and Reborrowings. The unpaid principal balance
of the Note at any time shall be the total amounts loaned or advanced thereunder
by Lender, less the amount of payments or prepayments of principal made thereon
by or for the account of Borrower. It is contemplated that by reason of
prepayments thereon there may be times when no amounts are owing under the Note,
but notwithstanding such occurrences, the Note, this Loan Agreement, and all
other Security Instruments shall remain valid and be in full force and effect as
to loans or advances made pursuant to and under the terms of this Loan Agreement
and the Note subsequent to each such occurrence. All loans or Advances and all
payments or prepayments made thereunder on account of principal or interest may
be evidenced by Lender, or any subsequent holder of the Note, maintaining in
accordance with its usual practice an account or accounts evidencing the
indebtedness of Borrower resulting from all loans or Advances and all payments
or prepayments thereunder from time to time and the amounts of principal and
interest payable and paid from time to time thereunder, in which event, in any
legal action or proceeding in respect of the Note, the entries made in such
account or accounts shall be prima facie evidence of the existence and amounts
of the obligations of Borrower therein recorded.

      

       

      2.08           Termination
of Credit Facility. Upon satisfaction of all obligations due from
Borrower to Lender under the Note, this Loan Agreement and all other Security
Instruments, and upon written notification from Borrower to Lender that Borrower
has terminated its right to request further Advances, Borrower shall have the
right to terminate this Loan Agreement, the Note, the Security Agreement, and
credit facility hereunder and receive from Lender a release of any and all liens
and security interests held by Lender and securing the repayment of the
Loan.

      
 

      
        ARTICLE
III

        REPRESENTATIONS
AND WARRANTIES

      

      
         

        Borrower
hereby represents and warrants as follows:

      

      
         

        3.01           Borrower's
Status. Borrower
(i) is a Nevada corporation, validly organized, duly existing and in good
standing as a corporation under the laws of the State of Nevada, (ii) is
authorized to do business and is in good standing under the laws of the State of
Colorado, and (iii) possesses all necessary and lawful authority and power to
carry on its business wherever it conducts business and to comply with the
terms, covenants and conditions of this Loan Agreement. The authorized officer
of Borrower has all necessary power and authority to execute this Loan
Agreement, the Note (and any renewals, extensions, or modifications thereof),
the Security Agreement, and all other Security Instruments, executed or granted
by Borrower in connection with this Loan Agreement.

         

        3.02           Payment
of Taxes. All
federal, state and other tax returns of Borrower required to be filed have been
filed, and all federal, state and other taxes, assessments, fees or other
governmental charges imposed upon Borrower, or any of its assets, have been
paid, except those the validity of which is being contested in good faith and
for which adequate reserves have been set aside.

      

       

      3.03           Suits,
Actions. There
are no material actions, suits, or proceedings pending or to Borrower's actual
knowledge, threatened in any court or before any court, governmental commission,
bureau or other administrative agency or Governmental Authority against or
affecting Borrower or the Property, or involving the validity, enforceability,
or priority of any of the Security Instruments, at law or in equity. The
consummation of the transactions contemplated hereby, and the performance of any
of the terms and conditions hereof and of the other Security Instruments, will
not result in a breach of, or constitute a default in, any mortgage, deed of
trust, lease, promissory note, loan agreement, credit agreement, company
agreement, partnership agreement, or other agreement to which Borrower is a
party or by which Borrower may be bound or affected.

       

       

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      3.04           Valid and
Binding Obligation. All of the Security
Instruments, and all other documents referred to herein to which Borrower is a
party, upon execution and delivery, will constitute valid and binding
obligations of Borrower, enforceable in accordance with their terms except as
limited by Debtor Relief Laws.

       

      3.05           Title to
the Property.
Borrower holds full legal and equitable title to the Property subject only to
that certain lien in favor of Pat and Ann Burke which is being released
simultaneously with the execution hereof.

       

      3.06           Other
Liens. No
mortgage, security agreement or other security instrument covering the Property,
or any part thereof, has been executed, no financing statement filed, and no
lien, security interest, mechanic's or materialman's lien has attached to, or
been perfected in the Property, or any part thereof, except the liens in favor
of Lender contemplated by this Loan Agreement and existing liens, if any, to be
released with the Loan proceeds pursuant to this Loan Agreement.

       

      
        Lender
hereby represents and warrants as follows:

         

        3.07           Lender's
Status. Lender
(i) is a Texas limited liability company, validly organized, duly existing and
in good standing as a limited liability company under the laws of the State of
Texas, (ii) is authorized to do business and is in good standing in all states
where such authorization is required, and (iii) possesses all necessary and
lawful authority and power to carry on its business wherever it conducts
business and to comply with the terms, covenants and conditions of Lender under
this Loan Agreement.

      

       

      3.08           Due
Authorization.
This Loan Agreement has been duly authorized by all necessary Company action on
the part of Lender, and Lender has the power and authority to perform its
obligations hereunder.

      
         

        3.09           Valid and
Binding Obligations. This Loan Agreement, upon
and execution and delivery by Lender, assuming due execution and delivery by
Borrower, will constitute the valid and binding obligation of Lender,
enforceable in accordance with its terms, except as limited by Debtor Relief
Laws.

         

      

      
        ARTICLE
IV

        COVENANTS
AND AGREEMENTS OF BORROWER

      

       

      Borrower
hereby covenants and agrees as follows:

       

      4.01           Compliance
with Governmental Requirements. Borrower shall timely comply
with all Governmental Requirements and deliver to Lender evidence thereof.
Borrower assumes full responsibility for the compliance of the Property with all
Governmental Requirements and, notwithstanding any approvals by Lender, Lender
shall have no obligation or responsibility whatsoever for any matter incident to
the Property.

       

      4.02           Notices
by Governmental Authority, Fire and Casualty Losses, Etc. Borrower shall timely comply
with and promptly furnish to Lender true and complete copies of any official
notice or claim by any Governmental Authority pertaining to the Property.
Borrower shall promptly notify Lender of any fire or other casualty or any
notice of taking or eminent domain action or proceeding affecting the
Property.

       

       

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        4.03           Costs and
Expenses.
Borrower shall pay when due all costs and expenses required by this Loan
Agreement, including, without limitation: (a) all taxes and assessments
applicable to the Property; (b) all fees for filing or recording the Security
Instruments, as applicable; (c) all fees and commissions lawfully due to
brokers, salesmen, and agents in connection with the Loan or the Property; (d)
all fees and expenses of counsel to Lender (not to exceed $27,500.00 in the
aggregate); and (e) all other reasonable costs and expenses payable to third
parties incurred by either Borrower or Lender in connection with the
consummation of the transactions contemplated by this Loan
Agreement.

      

       

      4.04           Additional
Documents.
Borrower shall execute and deliver to Lender, from time to time, as requested by
Lender, such other documents, including financing statements, as shall
reasonably be necessary to provide the rights and remedies to Lender granted or
provided for by this Agreement, the Note, the Security Agreement, or any other
Security Instruments.

       

      4.05           Inspection
of Books and Records. Borrower shall permit
Lender, at all reasonable times, to examine and copy the books and records of
Borrower pertaining to the Loan and the Property. Lender understands and
acknowledges that Borrower is a public company subject to the rules and
regulations of the U.S. Securities and Exchange Commission and the federal and
state securities laws (collectively, the "Securities Laws"). Further,
Lender acknowledges and agrees that during the term of this Loan Agreement,
Lender, and its affiliates, may be in possession of, or have access to,
material, non- public information regarding Borrower. Lender agrees, on behalf
of itself and its affiliates, to comply with the insider trading rules of the
Securities Laws, including, without limitation, not to trade in Borrower's
securities when Lender or its affiliates is in possession of material,
non-public information regarding Borrower. Borrower undertakes no responsibility
or liability, and hereby waives any obligation, to inform Lender or its
affiliates of when they may be in possession of material, non-public information
regarding Borrower or their obligations under the Securities Laws and to
therefore refrain from trading in Borrower's securities.

       

      4.06           Defense
of Actions.
Lender may (but shall not be obligated to) commence, appear in, or defend any
action or proceeding purporting to affect the Loan, the Property, or the
respective rights and obligations of Lender and Borrower pursuant to this Loan
Agreement. Lender may (but shall not be obligated to) pay all necessary
expenses, including, without limitation, reasonable attorneys' fees and expenses
incurred in connection with such proceedings or actions, which Borrower agrees
to repay to Lender upon demand.

       

      4.07           Prohibition
on Assignment.
Borrower shall not assign or encumber any interest of Borrower hereunder without
the prior written consent of Lender, which consent shall not be unreasonably
withheld.

       

      4.08           Payment
of Claims.
Borrower shall promptly pay or cause to be paid when due all costs and expenses
incurred in connection with the Property, and Borrower shall keep the Property
free and clear of any liens, charges, or claims other than the lien granted to
Lender and other liens approved in writing by Lender.

       

      4.09           Tax
Receipts.
Borrower shall furnish Lender at Lender's request with receipts or tax
statements marked "Paid" to evidence the payment of all taxes levied on the
Property on or before thirty (30) days prior to the date such taxes become
delinquent.

       

       

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      4.13           Savings
and Spreading. It
is expressly stipulated and agreed to be the intent of Lender and Borrower at
all times to comply with the applicable Colorado law governing the maximum rate
or amount of interest payable on or in connection with the Note and the Loan
evidenced thereby (or applicable United
States federal law to the extent that it permits Lender to contract for, charge,
take, reserve or receive a greater amount of interest than under Colorado law).
If the applicable law is ever judicially interpreted so as to render usurious
any amount called for under the Note or under the other Security Instruments, or
contracted for, charged, taken, reserved or received with respect to the Loan,
or if acceleration of the maturity of the Note or if any prepayment by Borrower
results in Borrower having paid any interest in excess of that permitted by law,
then it is
Lender's and Borrower's express intent that: (i) all excess amounts theretofore
collected by Lender be credited on the principal balance of the Note (or, if the
Note has been or would thereby be paid in full, refunded to Borrower); and (ii)
the provisions of the Note and the other Security Instruments immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for thereunder. The right to accelerate maturity of the
Note does not include the right to accelerate any interest which has not
otherwise accrued on the date of such acceleration, and Lender does not intend
to collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of the
indebtedness evidenced by the Note and the other Security Instruments, as
applicable, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the applicable usury ceiling. Notwithstanding any
provision contained in the Note or in any of the other Security Instruments that
permits the compounding of interest, including, without limitation, any
provision by which any of the accrued interest is added to the principal amount
of the Note, the total amount of interest that Borrower is obligated to pay and
Lender is entitled to receive with respect to the Note shall not exceed the
amount calculated on a simple (ie.., noncompounded) interest basis at the
Maximum Rate (as defined hereinafter) on principal amounts actually advanced to
or for the account of Borrower, including, without limitation, any initial funds
advanced contemporaneously herewith and any advances made pursuant to any of the
Security Instruments (such as for the payment of taxes, insurance premiums and
the like). As used herein, the term "Maximum Rate" shall mean the maximum
nonusurious rate of interest which may be lawfully contracted for, charged,
taken, reserved or received by Lender from Borrower in connection with the Loan
under applicable Colorado law (or applicable United States federal law to the
extent that it preempts Colorado law and permits Lender to contract for, charge,
take, reserve or receive a greater amount of interest than under Colorado law).
The Borrower agrees that if such excess payments are applied in the manner
provided for in this paragraph, then to the fullest extent permitted by
applicable law, the Lender shall not be subject to any penalty provided for by
any applicable law relating to charging or collecting interest in excess of that
permitted by applicable law.

      
        

        4.14           Purchase
of Burke Note.
Lender and Borrower acknowledge and agree that Lender's obligations hereunder to
make the Loan are conditioned upon the purchase by Borrower of that certain
Secured Promissory Note dated May 26, 2009 in the original principal amount of
$2,800,000.00 from Cadence II, LLC, a wholly owned subsidiary of Borrower
("Cadence") payable to Pat and Ann Burke (the "Burkes"), pursuant to the terms
of a Note Purchase Agreement between Borrower and the Burkes in form and
substance acceptable to Lender. Without limitation on the foregoing, it is
understood and agreed that $750,000.00 of the initial Advance under this
Agreement shall be used to pay the cash portion of the purchase price due to the
Burkes under the Note Purchase Agreement. In the event that the Note Purchase
Agreement is not executed, delivered and consummated in accordance with the
terms thereof simultaneously with the initial Advance hereunder, then Lender's
obligations hereunder shall cease and terminate, and all Advances made by Lender
hereunder shall be immediately due and payable by Borrower to
Lender.

         

         

         

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        4.15           Lock-Up
Agreements. The
obligations of Lender hereunder, including, without limitation, the obligations
of Lender to make the initial Advance hereunder are conditioned upon Borrower's
obtaining from the three (3) largest shareholders of Borrower a "lock-up"
agreement or other similar
agreement restricting the trading of any shares held by the current shareholders
of Borrower for a period of not less than seventy-five (75) days from the date
of this Agreement. The form of any such "lock-up" agreements shall be subject to
Lender's approval. Without limitation on the foregoing, each such agreement
shall contain an additional provision to the effect that the shareholder
consents to (i) the loan transaction set forth in this Agreement, (ii) the
issuance by the Company to TMG Holdings, LLC, an affiliate of Lender, of
21,800,000 common shares of Borrower at an issuance price of $.02 per share, and
(iii) the retention by the Company of Scott Schwartz, an affiliate of Lender, as
a consultant to the Company pursuant to the Independent Contractor Consulting
Services Agreement of even date herewith. In addition to the three (3) largest
shareholders, Borrower will use commercially reasonable efforts to obtain
identical lock-up agreements from all other shareholders of Borrower as soon as
practicable following the initial Advance.

      

      
        

        4.16           Issuance
of Securities and Payment of Dividends. For so long as any portion
of the loan is outstanding, and as long as Lender's obligation under this
Agreement is in effect, Borrower agrees that it will not declare any dividends
or make any other distributions of money or other property with respect to the
Borrower's shares. For a period of seventy-five (75) days from the effective
date hereof, Borrower will not issue any shares or other securities of Borrower
without the prior written consent of Lender (other than underlying shares
exercisable under Borrower's equity incentive plan, any outstanding options or
warrants, and the shares underlying that certain warrant for Pat and Ann Burke
dated June 11, 2010).

         

        4.17           Indemnity. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties (as defined below) from and against any and all claims,
suits, liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, fines,
penalties, charges, fees, judgments, awards, amounts paid in settlement,
punitive damages, foreseeable and unforeseeable consequential damages, of
whatever kind or nature (including but not limited to attorneys' fees and other
costs of defense) (the
"Losses") imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
one or more of the following: (i) ownership of the Note and/or any of the
Security Instruments; (ii) any amendment to, or restructuring of, the Loan, this
Loan Agreement or any other Security Instruments; (iii) any and all lawful
action that may be taken by Lender in connection with the enforcement of the
provisions of this Loan Agreement, the Note or any of the other Security
Instruments, whether or not suit is filed in connection with same, or in
connection with Borrower and/or any member, partner, joint venturer or
shareholder thereof becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (iv) any accident, injury to
or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof; (v) any use, nonuse or condition in, on or
about the Property or any part thereof; (vi) any failure on the part of Borrower
to perform or be in compliance with any of the terms of this Loan Agreement;
(vii) any failure of the Borrower or the Property or any use thereof to be in
compliance with any applicable Governmental Requirements; (viii) the enforcement
by any Indemnified Party of the provisions of this paragraph; (ix) any
misrepresentation made by Borrower in this Loan Agreement or any other Security
Instruments; or (x) THE
NEGLIGENCE OF ANY INDEMNIFIED PARTY, EXCEPT TO THE EXTENT CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNIFIED PARTY. Any amounts
payable to Lender by reason of the application of this paragraph shall become
immediately due and payable upon demand and shall bear interest at the rate
provided in the Note for past due amounts from the date of demand to the date of
payment. For purposes of this paragraph, the term "Indemnified Parties" means
Lender and any person or entity who is or will have been involved in the
origination of the Loan, any person or entity who is or will have been involved
in the servicing of the Loan, any person or entity in whose name the
encumbrances and security interests created by this Loan Agreement or the
Security Instruments are or will have been recorded, persons and entities who
may hold or acquire or will have held a full or partial interest in the Loan as
well as the respective directors, officers, shareholders, partners, members,
employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any and all of
the foregoing (including but not limited to any other person or entity who holds
or acquires or will have held a participation or other full or partial interest
in the Loan or the Property, whether during the term of the loan evidenced by
the Note or as a part of or following a foreclosure of the liens securing the
Loan and including, but not limited to, any successors by merger, consolidation
or acquisition of all or a substantial portion of Borrower's assets and
business). This paragraph will survive the termination of this Loan Agreement or
foreclosure of the liens securing the Loan.

         

         

        8

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
        
ARTICLE V

        RIGHTS
AND REMEDIES OF LENDER

      

      
        

        5.01           Acceleration. Upon the occurrence of an
Event of Default and in the event Lender elects to demand payment of the Loan,
Lender may, at its option, declare the Loan immediately due and payable without
notice of any kind except as provided in this Loan Agreement, the Note and/or
any of the Security Instruments, and, after any Event of Default, Lender shall
have all rights and remedies under this Agreement, the other Security
Instruments and under applicable law.

         

        5.02           No Waiver
or Exhaustion. No
waiver by Lender of any of its rights or remedies hereunder, in the other
Security Instruments, or otherwise, shall be considered a waiver of any other or
subsequent right or remedy of Lender; no delay or omission in the exercise or
enforcement by Lender of any rights or remedies shall ever be construed as a
waiver of any right or remedy of Lender; and, no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any right or remedy of
Lender.

      

       

      

      
        
ARTICLE VI

        GENERAL
TERMS AND CONDITIONS

      

      
        

        6.01           Notices. All notices, demands,
requests, and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been given when presented personally or
after deposit in a regularly maintained receptacle for the United States Postal
Service, postage prepaid, registered or certified mail, return receipt
requested, addressed to Borrower or Lender, as the case may be, at the
respective addresses set forth on the first page of this Loan Agreement, or such
other address as Borrower or Lender may from time to time designate by written
notice to the other as herein required.

         

        6.02           Modifications. No provision of this Loan
Agreement or the other Security Instruments may be modified, waived, or
terminated except by instrument in writing executed by the party against whom a
modification, waiver, or termination is sought to be enforced.

         

        6.03           Severability. In case any of the
provisions of this Loan Agreement shall for any reason be held to be invalid,
illegal, or unenforceable, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Loan Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.

      

       

      6.04           Election
of Remedies.
Lender shall have all of the rights and remedies granted in the Security
Instruments and available at law or in equity, and these same rights and
remedies shall be cumulative and may be pursued separately, successively, or
concurrently against Borrower or any of the Property covered under the Security
Instruments at the sole discretion of Lender. The exercise or failure to
exercise any of the same shall not constitute a waiver or release thereof or of
any other right or remedy, and the same shall be nonexclusive.

       

       

      9

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        6.05           Approval
of Lender and Form and Substance. All documents, certificates,
insurance policies, and other items required under this Loan Agreement to be
executed and/or delivered to Lender and/or approved by Lender shall be in form
and substance satisfactory to Lender.

      

       

      6.06           No Third
Party Beneficiary. This Loan Agreement is made
for the sole benefit of and is binding upon, the undersigned, and their
respective heirs, executors, administrators, legal representatives, successors
and assigns. No other person or persons (including, without limitation, firms,
corporations, limited liability companies and partnerships), shall have any
right of action or claim for relief hereunder, nor shall any provision herein be
deemed to establish any fund for the benefit of anyone not a party to this Loan
Agreement.

       

      6.07           Time of
Essence. Time is
hereby expressly made of the essence of this Loan Agreement.

       

      6.08           Attorney's
Fees. Should
either party hereto bring suit in court to enforce the terms hereof, it is
agreed that the losing party shall pay to the successful party costs and
reasonable attorney's fees.

       

      6.09           No
Partnership. The
parties hereto acknowledge and agree that each as to the other, has a different
interest, that there is not a community of interest and that by entering into
this Loan Agreement it is not their intention that a joint venture be deemed to
exist. The interest of Lender is that of a lender as expressed
herein.

       

      6.10           Number
and Gender.
Whenever used herein, the singular number shall include the plural and the
singular, and the use of any gender shall be applicable to all genders. The
duties, covenants, obligations, and warranties of Borrower in this Loan
Agreement shall be joint and several obligations of Borrower.

       

      6.11           Captions. The captions, headings, and
arrangements used in this Loan Agreement are for convenience only and do not in
any way affect, limit, amplify, or modify the terms and provisions
hereof.

       

      6.12           Applicable
Law. This Loan
Agreement and the rights and remedies provided by the Security Instruments shall
be governed by and construed in accordance with the laws of the State of
Colorado, and the laws of the United States applicable to transactions within
such state.

       

      
        THIS
AGREEMENT, THE NOTE, THE SECURITY AGREEMENT, AND THE OTHER SECURITY INSTRUMENTS
REFERENCED HEREIN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

         

      

      
         

        THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         

        

      

      
        

         

        [Remainder
of page intentionally left blank.]

      

      

      
         

        10

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        

      

      
        EXECUTED
AND DELIVERED on the date first recited.

         

        

      

      
        
          	 	
                  LENDER:

                   

                  TMG HOLDINGS
      COLORADO, LLC

                   

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Scott M. Schwartz	 
	 	Name: 	Scott M. Schwartz	 
	 	Its:	President	 
	 	 	 	 

        

      

      
        

         

        
           

          

          
            
              	 	
                      BORROWER:
      

                       

                      VERECLOUD,
      INC.

                       

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/ Mike Cookson	 
	 	Name: 	Mike Cookson	 
	 	Its:	Chief
      Operting Officer	 
	 	 	 	 

            

          

        

      

      
         

         

        List of
Schedules and Exhibits:

         

      

      
         

        Exhibit A
- Form of Request for Advance and Certification

         

         

         

        11

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      

      
        
EXHIBIT "A"

         

        REQUEST
FOR ADVANCE AND CERTIFICATION

         

        El Paso,
Texas

         

        (date)

        

      

      
        TMG
HOLDINGS COLORADO, LLC

        7598 N.
Mesa, Ste. 205

        El Paso,
Texas 79912

      

      
        

         

        
          	
                  Re: 

                	
                  Request
      for Advance under the Loan Agreement, dated June ___ , 2010, by and
      among VERECLOUD,
      INC., a Nevada corporation ("Borrower") and TMG HOLDINGS COLORADO, LLC, a
      Texas limited liability company
  ("Lender").

                

        

      

      
         

         

      

      
        Gentlemen:

      

      
         

        Borrower
hereby requests an advance under the terms of the captioned Loan Agreement as
contemplated therein, in the amount of $____________________.

      

      
        

        Borrower
hereby certifies and warrants that all conditions to such Advance as specified
in the Loan Agreement have been satisfied.

         

        

          

          
            
              	 	
                      Very truly yours,

                       

                      VERECLOUD,
      INC.

                      a Nevada corporation

                       

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 	 
	 	Name: 	 	 
	 	Title:	 	 
	 	 	 	 

            

          

          
             

          

        

      

    

     

     

     

     

    12ex10x2.htm

    Exhibit 10.2  

     

     

     

    
      
        
REVOLVING CREDIT NOTE

         

      

      
         

        
          	$1,564,000.00   	
                   Englewood,
      Colorado

                  Effective June 10, 2010

                

        

        
 

      

      
        1.            Amount,
Obligation to Pay, Interest Rate. FOR VALUE RECEIVED, in such
installments and at the times hereinafter stated, VERECLOUD, INC., a Nevada
corporation (hereinafter "Borrower", whether one or more), whose address is 6560
S. Greenwood Plaza Blvd., Suite 400, Englewood, Colorado 80111, jointly and
severally if more than one, promises to pay to the order of TMG HOLDINGS
COLORADO, LLC, a Texas limited liability company ("Lender"), whose address is
7598 N. Mesa, Suite 205, City of El Paso, El Paso County, Texas 79912, in
immediately available funds constituting legal tender of the United States of
America, the principal sum of ONE MILLION FIVE HUNDRED SIXTY-FOUR THOUSAND AND
NO/100THS DOLLARS ($1,564,000.00) (the "Maximum Note Amount"), or so
much thereof as shall be advanced hereunder, with interest on the unpaid
principal balance from time to time outstanding, interest to accrue from the
date of each disbursement made hereunder as follows:

         

        The rate
of interest hereunder, prior to default by Maker or maturity of this Note, shall
be ten percent (10%) per annum. From and after any default by Maker in the
payment of this Note or maturity of this Note, the rate of interest hereunder
shall be as provided in Section 7 of this Note.

      

      
         

        2.           Terms. Payments of principal and
interest under this Revolving Credit Note ("Note") shall be made as
follows:

      

       

      Accrued
interest only as provided herein on the outstanding principal balance shall be
due and payable quarterly; the first of such interest payments shall be due and
payable on June 30, 2011, and interest payments shall be due and payable
thereafter on the last day of every calendar quarter, (September 30, December
31, March 31, and June 30) during the term of the Note. The entire balance of
unpaid principal and accrued, unpaid interest as provided herein shall be due
and payable on June 30, 2012.

      
         

        The
unpaid principal balance of this Note at any time will be the total amounts
advanced by Lender, less the amount of all payments or prepayments of principal.
Absent manifest error, the records of Lender will be conclusive as to amounts
owed. Subject to the terms and conditions of this Note and the Security
Documents (as defined below), Borrower may use all or any part of the credit
provided for herein at any time before the maturity of this Note and may borrow,
repay and reborrow. No limitation exists with respect to the number of advances
made under this Note so long as the total unpaid principal amount at any time
outstanding does not exceed the Maximum Note Amount.

         

        3.           Security. This Note is secured by all
instruments heretofore, now or hereafter executed by Borrower or any guarantors
in favor of Lender and by their terms securing the payment of this Note
(hereinafter "Security
Documents") including without limitation, the
following:

      

      
        

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

          A.  A Loan
Agreement of even date herewith between Lender and Borrower ("Loan
Agreement').

        

         

        B.  A
Security Agreement of even date herewith from Borrower, as Debtor, to Lender, as
Secured Party, in which Borrower grants to Lender a security interest in the
collateral more fully described therein (the "Collateral").

         

        C.  One or
more UCC Financing Statements perfecting the security interest granted by
Borrower, as Debtor, to Lender, as Secured Party, in the
Collateral.

      

       

      4.           Manner
and Place of Payment; Holidays. All payments on this Note
shall be made in coin or currency which, at the time or times of payment, are
immediately available funds constituting legal tender for public or private
debts in the United States of America. All payments on this Note shall be made
at the address of Lender as indicated in the first paragraph hereinabove, or at
such other address as Lender shall designate in writing. If the prescribed date
of payment of any of the principal of or interest hereon is a Sunday or legal
holiday, such payment shall be due on the next succeeding business
day.

       

      5.           Application
of Payments; Prepayment. All sums paid hereon shall
be applied first to the payment of accrued interest due on the unpaid principal
balance, and the remainder to the reduction of unpaid principal. Borrower may
prepay this Note at any time without penalty. Any prepayment is to be applied
toward the payment of the principal installments last maturing upon this Note,
that is, in the inverse order of maturity and without reducing the amount or
time of payment of the remaining obligatory installments.

      
         

        6.           Default
and Acceleration.
Time is of the essence of this Note, and time is of the essence in the
performance of all obligations under the Security Documents. Upon the occurrence
of an "Event of Default", as defined in the Loan Agreement, Lender may, then or
at any time thereafter, without further notice and at its option, accelerate
maturity and cause all of the unpaid principal balance of this Note, with
interest, fees and charges accrued hereon, and all obligations in all
instruments securing or collateral to it, to become immediately due and payable.
If Lender waives Lender's right to accelerate maturity as a result of a default
hereunder, either one or more times or repeatedly, nevertheless Lender shall not
be deemed to have waived the right to require strict compliance with the terms
of this Note thereafter.

         

        7.           Annual
Interest Rate Upon Default. All past due installments of
principal and interest due and owing on this Note, shall bear interest from
maturity thereof until paid at the lesser of (i) eighteen percent (18.00%) per
annum or (ii) the Maximum Rate as defined herein. Upon acceleration or maturity
of the entire outstanding principal balance of this Note, the said principal
amount shall bear interest from the date of acceleration or maturity until paid
at the rate of eighteen percent (18%) per annum calculated and applied on the
basis of actual days elapsed and a 365/366 day year, subject to Section 8
hereof, PROVIDED, this Section shall in no way exceed the Maximum Rate as
defined herein.

      

      
         

         

        2

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        8.           Savings
and Spreading. It
is expressly stipulated and agreed to be the intent of Borrower and Lender at
all times to comply with applicable Colorado law governing the maximum rate or
amount of interest payable on or in connection with this Note and the loan
evidenced hereby (the "Loan") (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, reserve or receive
a greater amount of interest than under Colorado law). If the applicable law is
ever judicially interpreted so as to render usurious any amount called for under
this Note or under the Security Documents, or contracted for, charged, taken,
reserved or received with respect to the Loan, or if acceleration of the
maturity of this Note or if any prepayment by Borrower results in Borrower
having paid any interest in excess of that permitted by law, then it is Borrower's
and Lender's express intent that: (i) all excess amounts theretofore collected
by Lender be credited on the principal balance of this Note (or, if this Note
has been or would thereby be paid in full, refunded to Borrower); and (ii) the
provisions of this Note and the Security Documents immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
maturity of this Note does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Lender
does not intend to collect any unearned interest in the event of acceleration.
All sums paid or agreed to be paid to Lender for the use, forbearance or
detention of the indebtedness evidenced hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the applicable usury
ceiling. Notwithstanding any provision contained in this Note or in any of the
Security Documents that permits the compounding of interest, including without
limitation any provision by which any of the accrued interest is added to the
principal amount of this Note, the total amount of interest that Borrower is
obligated to pay and Lender is entitled to receive with respect to this Note
shall not exceed the amount calculated on a simple (ie., noncompounded) interest
basis at the Maximum Rate (as defined hereinafter) on principal amounts actually
advanced to or for the account of Borrower, including any initial funds advanced
contemporaneously herewith and any advances made pursuant to any of the Security
Documents (such as for the payment of taxes, insurance premiums and the like).
As used herein, the term "Maximum Rate" shall mean the maximum nonusurious rate
of interest which may be lawfully contracted for, charged, taken, reserved or
received by Lender from Borrower in connection with the Loan evidenced hereby
under applicable Colorado law (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, reserve or receive
a greater amount of interest than under Colorado law). As used herein, the term
"Maximum Rate" shall mean the maximum nonusurious rate of interest which may be
lawfully contracted for, charged, taken, reserved or received by Lender from
Borrower in connection with the loan evidenced hereby under applicable Colorado
law (or applicable United States federal law to the extent that it permits
Lender to contract for, charge, take, reserve or receive a greater amount of
interest than permitted under Colorado law). The Borrower agrees that if such
excess payments are applied in the manner provided for in this paragraph, then
to the fullest extent permitted by applicable law, the Lender shall not be
subject to any penalty provided for by any applicable law relating to charging
or collecting interest in excess of that permitted by applicable
law.

      

       

       

       

      3

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        9.            Attorney's
Fees and Expenses. In the event that Lender or
any other holder of this Note brings suit hereon, or employs an attorney or
incurs expenses to compel payment of this Note or any portion of the
indebtedness evidenced hereby, or to cure any defaults under this Note or any of
the Security Documents, whether through suit, probate, insolvency,
reorganization, bankruptcy, or any other legal or informal proceeding, Borrower
and all endorsers, guarantors and sureties agree additionally to pay all
reasonable attorney's fees, court costs and other reasonable expenses thereby
incurred by Lender.

      

       

      10.            Waiver. Except as otherwise provided
in this Note, Borrower and all endorsers, guarantors, sureties and accommodation
parties of this Note, both before and after maturity, hereby expressly: (i)
waive all protest, notice of protest, demand for payment, presentment for
payment, notice of intention to accelerate maturity, notice of acceleration of
maturity, notice of dishonor, bringing of suit, and diligence in taking any
action to collect any amounts called for hereunder and in the handling of
properties, rights or collateral at any time existing in connection herewith;
(ii) consent to and waive notice of any one or more renewals, extensions or
modifications of this Note, whether made to or in favor of Borrower or any other
person or persons, regardless whether any such renewal, extension or
modification modifies the terms, interest rate or time for payment of this Note
and regardless of the length of term of the renewal, extension or modification;
(iii) consent to and waive notice of any substitution, exchange or release of
any security now or hereafter given for this Note; (iv) consent to and waive
notice of the release of any party primarily or secondarily liable hereon; (v)
consent to and waive notice of any other indulgences, none of which shall
otherwise affect the liability of any of said parties for the indebtedness
evidenced by this Note; and (vi) agree that it will not be necessary for Lender,
in order to enforce payment of this Note, first to institute suit against or to
exhaust Lender's remedies against Borrower or any other party liable hereunder,
or to proceed against any other security for this Note.

      
         

        11.            Definitions;
Applicable Law.
The terms "Borrower" and "Lender" and other nouns and pronouns include the
singular and/or plural, as appropriate. The terms "Borrower" and "Lender" also
include their respective successors and assigns. THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO EXCEPT WHERE
PREEMPTED BY FEDERAL LAW OF THE UNITED STATES OF AMERICA.

         

        12.           Purpose. Borrower warrants and
represents to Lender that each loan, whether one or more, evidenced by this
Note, is and shall be for business, commercial, investment or other similar
purpose and not primarily for personal, family, household or agricultural
use.

      

       

      13.           Payment
of Note and Discharge of Indebtedness. Upon
satisfaction of all obligations due from Borrower to Lender under this Note, the
Loan Agreement and all other Security Instruments, and upon written notification
from Borrower to Lender that Borrower has terminated its right to request
further advances hereunder, Borrower shall have the right to terminate the Loan
Agreement, the Note, and the Security Agreement and receive from Lender a
release of any and all liens and security interests held by Lender and securing
the repayment of this Note.

      

      
        

        4

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

      

      
        NOTICE

         

        

      

      
        

         

        THE
NOTE AND THE SECURITY DOCUMENTS EXECUTED IN CONNECTION THEREWITH CONSTITUTE THE
WRITTEN LOAN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

         

      

      
        THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

      

      
         

        IN WITNESS WHEREOF, Borrower
has executed this Note as of the date first set forth above.

      

      
 

      
        

        
          
            	 	
                    BORROWER:

                     

                    
                      VERECLOUD,
      INC.,

                      
                        a
      Nevada corporation

                         

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Mike
      Cookson	 
	 	Name:	Mike
      Cookson	 
	 	Its:	Chief
      Operating Officer	 
	 	 	 	 

          

        

         

                                                            

      

      
         

         

         

         

         

         

        5

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