Verecloud Board Member Offer Letter to Phillip W. Tonge (August 2010)

1)  

A term of service, commencing on August 12, 2010 and expiring on the date of the annual Verecloud shareholder meeting that will occur in the fall of 2010.

2)  

$2500 quarterly retainer, paid on or about the 10th day of each quarter through the term of this agreement.

3)  

200,000 shares of Verecloud common stock in the form of a Warrant, pursuant to the terms and conditions of the attached Warrant, to be entered into by and between you and the Company on or about the commencement date of your term of service.  The Warrant shall vest with respect to the underlying shares in equal installments of 40,000 shares on the last day of the next five consecutive calendar quarters commencing with September 30, 2010 such that the Warrant may become fully vested on September 30, 2011 subject to your continued service as a Board Member through such date.

4)  

For each subsequent one-year term of service approved on or after the annual shareholders meeting in the fall of 2011, you will receive a Warrant or similar mechanism (e.g.:  Non-Qualified Stock Option) to purchase 100,000 shares of Verecloud common stock pursuant to the terms and conditions of the award and other equity-based governing documents.

5)  

Full expense reimbursement for in-person Board meeting attendance plus any pre-approved out-of-pocket expenses for any Verecloud business expenses incurred;

6)  

Liability coverage under the Verecloud Director & Officer insurance policy.