Exhibit 10.8
 
STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of September 6, 2012
(the “Closing Date”) is entered into by and between UTA Capital, LLC, as
purchaser (the “Purchaser”), and Genesis Group Holdings, Inc., as issuer (the
“Company”).
 
WHEREAS, Purchaser is the holder of that certain warrant dated as of August 6,
2010 to purchase up to 20,952,381 shares of the Company’s common stock, subject
to certain adjustments for dilutive issuances (the “Warrant”), issued pursuant
to the terms and conditions of that certain note and warrant purchase agreement
among the Company, Digital Comm, Inc. (the “Borrower”) and Purchaser dated as of
August 6, 2010, as amended and modified by the loan extension and modification
agreement dated as of February 14, 2011, the second loan extension and
modification agreement dated as of June 25, 2011 and the third loan extension
and modification agreement dated as of December 28, 2011 (collectively, the
“Loan Agreements”);
 
WHEREAS, pursuant to the Loan Agreements, the Borrower obtained a loan from the
Purchaser in the aggregate principal amount of $1,000,000, which principal
balance has been reduced to $750,000 (the “Loan”);
 
WHEREAS, the Company desires to repay the Loan in full and retire and cancel the
Warrant;
 
WHEREAS, concurrent with the repayment of the Loan and as consideration for the
retirement and cancellation of the Warrant, the Company desires to issue and
sell to the Purchaser, and the Purchaser desires to purchase from the Company,
shares of common stock of the Company representing 11.1% of the issued and
outstanding shares of capital stock of the Company on a fully diluted basis as
of the date hereof and as of the Closing Date (as defined herein below), or
24,940,263 shares (the “Shares”), in accordance with the terms and conditions of
this Agreement;
 
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
 
1.             Definitions.  For the purposes of this Agreement, the following
terms shall have the meanings set forth below:
 
“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.

“Agreement” has the meaning set forth in the preamble.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

“Closing” means the completion of the purchase and sale of the Shares pursuant
to this Agreement on the Closing Date.

“Closing Date” has the meaning set forth in the preamble.

“Company” has the meaning set forth in the preamble.
 
 
 

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“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the Securities Act) of the Company, after due inquiry.

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

“Governmental Permits” has the meaning set forth in Section 4.10.

“Loan” has the meaning set forth in the recitals.

“Loan Agreements” has the meaning set forth in the recitals.

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole,
(ii) the legality or enforceability of this Agreement or the transactions
contemplated hereby, or (iii) the ability of the Company to perform its
obligations under the this Agreement.

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

“SEC” means the United States Securities and Exchange Commission.

“SEC Filings” has the meaning set forth in Section 4.6.

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

“Shares” has the meaning set forth in the recitals.

“10-K” has the meaning set forth in Section 4.6.

“Warrant” has the meaning set forth in the recitals.

2.             Purchase of Shares.  Subject to and upon the terms and conditions
of this Agreement and concurrently with the repayment of the Loan, on and as of
the Closing Date, the Company hereby issues, sells and delivers, and Purchaser
hereby purchases, acquires and accepts from the Company the Shares.  As
consideration for the Shares, the Purchaser hereby forfeits and surrenders to
the Company the Warrant for retirement and cancellation.  The parties
acknowledge and confirm that the issuance and sale of the Shares in
consideration of the forfeiture and cancellation of the Warrant was agreed upon
by the parties in an arms length negotiation and that the aggregate fair market
value of the Shares may be more or less than the aggregate fair market value of
the Warrant at any time after the Closing Date and that each of the parties to
this Agreement bear the economic risks of their investment decision with respect
to the disposition or acquisition of the Shares and the forfeiture, cancellation
and retirement of the Warrant.  In the event that it is subsequently determined
that the Shares did not represent 11.1% of the issued and outstanding capital
stock of the Company on a fully diluted basis as of the Closing Date in a breach
of Section 4.3(b) by the Company, the Company hereby undertakes, covenants and
agrees to issue and sell to Purchaser within three (3) business days of notice
of such breach by Purchaser such number of additional shares of the Company’s
common stock (the “Additional Shares”) required for the sum of such Additional
Shares and the Shares to equal 11.1% of the issued and outstanding capital stock
of the Company on a fully diluted basis as of the Closing Date.  Upon issuance,
such Additional Shares shall be deemed to have been issued to Purchaser as of
the Closing Date pursuant to the terms and conditions of this Agreement.
 
 
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3.             The Closing; Further Assurances.  At the Closing, (a) the Company
shall deliver to Purchaser one or more certificates evidencing ownership of the
Shares, and (b) Purchaser shall deliver to the Company all original copies of
the Warrant and any amendments, modifications or supplements thereto which shall
be deemed terminated and cancelled except as provided in Section 6 of this
Agreement. At any time and from time to time after the Closing Date and without
further consideration the parties shall promptly execute and deliver such
instruments of sale and confirmation, and take all such other action as the
other may reasonably request, more effectively to assist in the in the
completion any of the transactions provided for or contemplated by this
Agreement.
 
4.             Representations and Warranties of the Company.  The Company
hereby represents and warrants to the Purchaser as follows:
 
4.1           Organization, Good Standing and Qualification.  The Company has no
Subsidiaries other than Digital Comm Inc. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Delaware.  The Company is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business require such qualification and
has all corporate power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged, except where the failure to
so qualify or have such power or authority would not have, singly or in the
aggregate, or could not reasonably be expected to have a Material Adverse
Effect.
 
4.2           Authorization.  The Company has full corporate power and authority
to enter into and perform its obligations under the this Agreement and to issue
the Shares in accordance with the terms and conditions hereof and has taken all
requisite action on the part of the Company, its officers, directors and
stockholders necessary for (i) the repayment of the Loan, the cancellation of
the Warrant and the authorization, execution and delivery of this Agreement,
(ii) the authorization of the performance of all obligations of the Company
hereunder, and (iii) the authorization, issuance and delivery of the
Shares.  This Agreement constitutes the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally and to general equitable principles.
 
4.3           Capitalization.
 
(a)           The authorized capital stock of the Company consists of
(i) 500,000,000 shares of common stock, par value $.0001 per share (the “Common
Stock”); and (ii) 50,000,000 shares of preferred stock, par value $.0001 per
share.  As of the date of this Agreement, (i)  199,746,789 shares of the
Company’s Common Stock were issued and outstanding, (ii) 792,439 shares of the
Company’s common stock were held in the treasury of the Company, (iii) 2,000,000
shares of series A convertible preferred stock of the Company were issued and
outstanding, (iv) 315 shares of series B redeemable convertible preferred stock
of the Company were issued and outstanding, (v) 1,150 shares of series C 10%
cumulative convertible preferred stock of the Company were issued and
outstanding; (vi) 565.67 shares of series D 10% cumulative convertible preferred
stock of the Company were issued and outstanding; (vii) warrants to purchase
11.1% shares of Common Stock were issued and outstanding; (viii) No options to
purchase shares of Common Stock were issued and outstanding, and (ix) No shares
of the Company’s Common Stock were reserved for future issuance pursuant to
equity compensation plans or awards of the Company.
 
 
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(b)           The Shares represent 11.1% of the issued and outstanding shares of
capital stock of the Company on a fully diluted basis as of the Closing Date.
 
(c)           All of the issued and outstanding shares of the Company’s capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable.  No Person is entitled to pre-emptive or similar statutory or
contractual rights with respect to any securities of the Company.
 
(d)           Except as described in paragraph (a) above, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company is or may be
obligated to issue any equity securities of any kind and except as contemplated
by this Agreement, and the Company is not currently in negotiations for the
issuance of any equity securities of any kind.
 
4.4           Valid Issuance.  The Shares have been duly and validly authorized
and, when issued and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions, except for restrictions on transfer imposed by
applicable securities laws.
 
4.5           Consents.  The execution, delivery and performance by the Company
of the this Agreement and the offer, issuance and sale of the Shares require no
consent of, action by or in respect of, or filing with, the Company, its board
of directors or its stockholders or any other Person, governmental body, agency,
or official other than (i) filings that have been made pursuant to applicable
state securities laws and post-sale filings pursuant to applicable state and
federal securities laws which the Company undertakes to file within the
applicable time periods and (ii) consents that have been or will be obtained
prior to the closing of the transactions contemplated hereby.  Subject to the
accuracy of the representations and warranties of the Purchaser set forth in
Section 5 hereof, the Company has taken all action necessary to exempt the
issuance and sale of the Shares from any anti-takeover, business combination or
control share law or statute binding on the Company or to which the Company or
any of its assets and properties may be subject and any provision of the
Company’s Certificate of Incorporation (the “Certificate of Incorporation”) or
Bylaws (the “Bylaws”), each as amended to date, that is or could reasonably be
expected to become applicable to the Purchaser as a result of the transactions
contemplated hereby, including without limitation, the issuance of the Shares
and the ownership, disposition or voting of the Shares by the Purchaser or the
exercise of any right granted to the Purchaser pursuant to this Agreement.
 
4.6           SEC Filings.  The Company has made available to the Purchaser
through the EDGAR system, true and complete copies of the Company’s most recent
Annual Report on Form 10-K for the fiscal year ended December 31, 2011(the
“10-K”) and most recent Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2012, as amended, and all other reports filed by the Company
pursuant to the Exchange Act since the filing of the 10-K and prior to the date
hereof (all of the foregoing and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC Filings”).  The SEC Filings
are the only filings required of the Company pursuant to the Exchange Act for
such period.  At the time of filing thereof, the SEC Filings complied as to form
in all material respects with the requirements of the Exchange Act and the rules
and regulations promulgated by the SEC applicable to the SEC Filings and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.  As of their respective dates, the financial statements of the
Company included in the SEC Filings complied as to form in all material respects
with Regulation S-X and all other published rules and regulations of the
SEC.  Such financial statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”) applied on a consistent basis during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
 
 
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4.7           No Conflict, Breach, Violation or Default.  The execution,
delivery and performance of this Agreement by the Company and the issuance and
sale of the Shares will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or conflict with or constitute a default (or an event which
with notice or lapse of time or both) under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, (i) the Certificate of Incorporation (including without
limitation any certificates of designation contained therein) or Bylaws, each as
amended to date, of the Company, (ii) any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument to
which the Company is a party or by which the Company or any of its properties is
bound or affected, or (iii) violate or conflict with any judgment, ruling,
decree, order, statute, rule or regulation of any court or other governmental
agency or body applicable to the Company or the business or properties of the
Company, except as to (ii) and (iii) above for such breaches, violations or
defaults which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
 
5.             Representations of the Purchaser.  Purchaser represents and
warrants to the Company, on and as of the date hereof and the Closing Date, as
follows:
 
5.1           Authority. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the full right, power and authority to enter into this
Agreement. The execution, delivery and performance by Purchaser of this
Agreement, and the consummation by Purchaser of the transactions contemplated
hereby, have been duly authorized by all necessary limited liability company
action on the part of Purchaser.  This Agreement has been duly executed and
delivered by Purchaser and constitutes a valid and binding obligation of
Purchaser against it in accordance with its terms.
 
5.2           No Conflicts.  The execution, delivery and performance by
Purchaser of this Agreement, and the consummation by Purchaser of the
transactions contemplated hereby, will not, with or without the giving of notice
or the passage of time or both, (a) violate or conflict with the provisions of
any law or of the governing documents of Purchaser, (b) violate or conflict with
any judgment, decree, order, writ, injunction or award of any court,
governmental body or arbitrator applicable to Purchaser, or (c) violate or
conflict with any agreement to which Purchaser is a party or by which it is
bound.  No consent, approval, order, or authorization of, or registration,
qualification, designation, declaration or filing with, any governmental
authority is required on the part of Purchaser in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
 
5.3           Accredited Investor.  Purchaser is an “accredited investor,” as
defined in Rule 501 under the Securities Act of 1933, as amended (the
“Securities Act”).
 
 
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5.4           No Advertising.  Purchaser has not seen or received any
advertisement or general solicitation with respect to the sale of the Shares.
 
5.5           Reliance.  Purchaser is aware that the Company has relied on these
representations in determining that the issuance, sale and delivery of the
Shares by the Company to Purchaser is exempt from registration under the
Securities Act and applicable state law. Purchaser (a) has conducted to its
satisfaction an independent investigation of the financial condition, results of
operations, assets, liabilities, properties and projected operations of the
Company and, in making its determination to proceed with the transactions
contemplated by this Agreement, it has relied solely on the results of its own
independent investigation, (b) the officers of the Company have made available
to it any and all information that it has requested and have answered to its
satisfaction all of its inquiries and (c) neither the Company nor any of its
Affiliates, stockholders, directors, employees, agents or representatives is
making or has made any representation or warranty whatsoever, express or
implied, in connection with the transactions contemplated by this Agreement.
 
5.6           Legends.  Purchaser understands that the Shares have not been
registered under the securities laws of the United States or any other
jurisdiction, are “restricted securities” under the Securities Act and cannot be
transferred or resold except as permitted pursuant to a valid registration
statement or an applicable exemption from registration.  Purchaser acknowledges
that the Company has not made any representations with respect to registration
of the Shares under applicable securities laws, that there is currently no
market for the Company’s capital stock and there can be no assurance that any
market will develop in the foreseeable future and that, as a result, Purchaser
must be prepared to bear the economic risk of its investment for an indefinite
period of time.  Purchaser understands and agrees that, until registered under
the Securities Act or transferred pursuant to the provisions of Rule 144 as
promulgated by the SEC, all certificates evidencing any of the Shares shall bear
a legend, prominently stamped or printed thereon, and in addition to any legends
required by other applicable securities or corporate laws, reading substantially
as follows:
 
“The securities represented by this certificate have not been registered under
the Securities Act of 1933 or applicable state securities laws.  These
securities have been acquired for investment and not with a view to distribution
or resale, and may not be sold, mortgaged, pledged, hypothecated or otherwise
transferred without an effective registration statement for such securities
under the Securities Act of 1933 and applicable state securities laws, or the
availability of an exemption from the registration provisions of the Securities
Act of 1933 and applicable state securities laws.”
 
5.7           No Broker.  No broker or finder has acted for Purchaser in
connection with this Agreement or the transactions contemplated hereby, and no
broker or finder is entitled to any brokerage or finder’s fee or other
commissions in respect of such transactions based upon agreements, arrangements
or understandings made by or on behalf of Purchaser.
 
 
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6.             Registration Rights.  Notwithstanding the termination and
cancellation of the Warrant at the Closing, from and after the Closing Date and
by way of continuation and extension of Purchaser’s rights pursuant to Section
6.2(a) of the Loan Agreements, the Purchaser shall be entitled to exercise
customary demand and piggy-back registration rights with respect to the Shares
and any Additional Shares on the same terms and conditions as the Purchaser was
entitled to exercise with respect to the shares issuable upon exercise of the
Warrant pursuant to Section 11 of the Warrant.
 
7.             Miscellaneous.
 
7.1           Successors and Assigns.  Neither party may assign its rights or
obligations under this Agreement without the prior written consent of the other
party, except that Purchaser may assign its rights and obligations under this
Agreement to any Affiliate of the Purchaser.  Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Any assignment in contravention of
this provision shall be void.
 
7.2           Survival of Representations and Warranties.  All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement and the closings of the transactions contemplated hereby.
 
7.3           Severability; Specific Performance.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.  In
addition to any and all other remedies that may be available at law in the event
of any breach of this Agreement, the parties hereto shall be entitled to
specific performance of the agreements and obligations of the other party
hereunder and to such other injunctive or other equitable relief as may be
granted by a court of competent jurisdiction.
 
7.4           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York (without reference
to the conflicts of law provisions thereof).
 
7.5           Notices.  All notices, requests, consents and other communications
under this Agreement shall be in writing and shall be deemed delivered (i) two
business days after being sent by registered or certified mail, return receipt
requested, postage prepaid or (ii) one business day after being sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient at the address of such party
set forth in the signature page to this Agreement, or such other address as any
such party may provide in writing to the other parties hereto. Any party may
give any notice, request, consent or other communication under this Agreement
using any other means (including, without limitation, personal delivery,
messenger service, telecopy, first class mail or electronic mail), but no such
notice, request, consent or other communication shall be deemed to have been
duly given unless and until it is actually received by the party for whom it is
intended.  Any party may change the address to which notices, requests, consents
or other communications hereunder are to be delivered by giving the other
parties notice in the manner set forth in this Section.
 
7.6           Fees and Expenses.  The Company shall promptly reimburse Purchaser
for all of Purchaser’s reasonable legal fees and other out-of-pocket expenses
incurred in connection with the preparation and negotiation of this Agreement
and the transactions contemplated hereby, including without limitation to the
payoff of the amounts owed to Purchaser under the Loan Agreements.
 
7.7           Complete Agreement; Amendments and Waivers.  This Agreement
constitutes the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter.  The parties hereto may amend or
modify this Agreement at any time by a written instrument executed by the
parties hereto.  No waivers of or exceptions to any term, condition or provision
of this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
 
 
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7.8           Counterparts; Facsimile Signatures.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document.  This
Agreement may be executed by facsimile signatures.
 
7.9           Pronouns; Section Headings and References.  Whenever the context
may require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural, and vice versa.  The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.  Any reference in this agreement to
a particular section or subsection shall refer to a section or subsection of
this Agreement, unless specified otherwise.
 
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
 
 
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as of and on the date first above written.
 

 
PURCHASER:
         
UTA CAPITAL LLC,
   
a Delaware limited liability company
         
By: YZT Management LLC, its Managing Member
 

 
 
By:
/s/ Udi Toledano      
Name: Udi Toledano
     
Title:  Managing Member
     
Address:
100 Executive Drive, Suite 330
       
West Orange, NJ 07052
 

 

 
COMPANY:
         
GENESIS GROUP HOLDINGS, INC.
   
a Delaware corporation
 

 
 
By:
/s/ Lawrence Sands
     
Name: Lawrence Sands
     
Title:   Senior Vice President
     
Address:
2500 N. Military Trail, Suite 275
       
Boca Raton, FL 33431
 

 
 
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