Exhibit 10.11
 
LOAN EXTENSION AND MODIFICATION AGREEMENT
 
This LOAN EXTENSION AND MODIFICATION AGREEMENT (this "Agreement") is dated as of
February 14, 2011, by and among (i) Genesis Group Holdings, Inc., a Delaware
corporation, trading on the OTC Bulletin Board under the symbol "GGHO" (the
"Parent"), Digital Comm, Inc., a Florida corporation and the Parent's
wholly-owned and sole subsidiary (the "Borrower"), and (ii) UTA Capital LLC, a
Delaware limited liability company (the "Purchaser").
 
Terms not otherwise defined herein shall have the meaning ascribed to such terms
in any of the following agreements, as applicable: (i) the Note and Warrant
Purchase Agreement, among the Parent, the Borrower and the Purchaser, dated as
of August 6, 2010 (the "Purchase Agreement"); (ii) the form of Senior Secured
Bridge Note, attached hereto as Exhibit A, which form was executed by the
Borrower on even date with the Purchase Agreement, and payable to the order of
the Purchaser in the stated Principal Amount, as defined therein (the "Original
Note"); or (iii) the form of the Common Stock Purchase Warrant, attached hereto
as Exhibit B, which form was executed by Parent on even date with the Purchase
Agreement, entitling the Purchaser to purchase Warrant Shares at Exercise Price
as defined therein and subject to terms and conditions specified therein (the
"Original Warrant").
 
WITNESSETH:
 
WHEREAS, pursuant to the Purchase Agreement the Borrower obtained a loan from
the Purchaser in the aggregate principal amount of $1,000,000, which principal
balance has been reduced to $775,000 (the "Loan");
 
WHEREAS, the Loan is evidenced by the Purchase Agreement and the Original Note;
 
WHEREAS, the obligations of Parent and Borrower under the Purchase Agreement are
secured by: (i) the pledges of all of the shares of capital stock of the
Borrower held by the Parent, representing 100% of the outstanding shares of
capital stock of the Borrower; (ii) a first priority perfected security interest
in and lien on any and all accounts receivable, contracts, chattel paper,
equipment and all other assets of the Parent, and (iii) a first priority
perfected security interest in and lien on any and all accounts receivable,
contracts, chattel paper, equipment and all other assets of the Borrower,
including a first priority perfected security interest in and lien on all of the
accounts receivable, contracts and chattel paper of the Borrower, and proceeds
thereof, including (x) the funds and other assets held in the AR Proceeds
Security Account under the Lockbox Account Agreement, and (y) the remaining
proceeds of the initial loan initially deposited and held in a segregated cash
collateral account. The foregoing pledges and guarantees described in this
recital, together with the Purchase Agreement, the Original Note and the
Original Warrant, hereinafter referred to as the "Loan Documents"), and all of
the foregoing pledges and guarantees are intended to and shall remain on full
force and effect;
 
WHEREAS, certain conditions precedent set forth under Section 8 of the Purchase
Agreement and certain covenants set forth under Sections 6 and 7 therein have
not been satisfied and performed by the Parent and the Company, and therefore,
pursuant to the Purchase Agreement the Purchaser has not paid for, and the
Borrower has not issued to the benefit of the Purchaser, a second Note in the
principal amount of $1,000,000.00.
 
 
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WHEREAS, pursuant to the Original Note: (i) the Maturity Date is August 6,
2011(the "Original Maturity Date"), and (ii) on the Original Maturity Date,
unless such date shall be otherwise extended in writing by the Purchaser in its
sole discretion, all outstanding principal and any accrued and unpaid interest
due and owing under the Original Note shall be immediately paid by Borrower.
 
WHEREAS, the Parent and the Borrower seek the Purchaser's consent to modify and
extend the Original Maturity Date of the Original Note to September 30, 2011
(the "Amended Maturity Date"), and the Purchaser, upon and subject to all
covenants, terms and conditions provided herein and in the Amended and Restated
Note (each as defined below), and on the basis of the facts and statements
contained in the foregoing recitals, is willing to consent to the Amended
Maturity Date; and
 
WHEREAS, in addition to the Amended Maturity Date, the Parent and the Borrower
seek the Purchaser's consent to modify other terms and conditions of the
Original Note as more fully set forth herein, and the Purchaser, upon and
subject to all covenants, terms and conditions provided herein and in the
Amended and Restated Note, and on the basis of the facts and statements
contained in the foregoing recitals, is willing to consent to such modifications
as set forth herein;
 
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Purchaser, the Parent and the Borrower agree as
follows:
 
1.         Extension. All references to the Original Maturity Date in the Loan
Documents are hereby changed to refer to the Amended Maturity Date.
 
2.         Interest Rate; Principal Amortization.
 
a.  
The Interest Rate for the remainder of the term of the Loan shall be 10% per
annum on the outstanding principal balance.

 
b.  
For the period commencing on January 1, 2011 through March 31, 2011, the Loan
shall bear only interest at the Interest Rate, as defined in the Original Note.

 
c.  
For the period commencing on April 1, 2011 through September 30, 2011, the Loan
shall bear interest at the Interest Rate, and the Borrower shall additionally
repay to the Purchaser $375,000 in five equal monthly principal payments of
$75,000 each, payable at the end of each of the first five full calendar months
within such period.

 
d.  
Any remaining principal balance of the Loan shall be due and payable on the
Amended Maturity Date.

 
 
 
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e.  
For the avoidance of any doubts, in the event that any of the foregoing payments
are not made when due, such overdue amounts shall bear interest at a rate per
annum that is three percent (3%) above the Interest Rate then in effect.

 
3.     Proceeds of Future Equity Financing.
 
a.  
If either the Borrower or the Parent obtains any equity financing, (x) 30% of
the cumulative net proceeds of any such financing or financings (reduced only by
direct transactional expenses) in excess of $500,000, and (y) 100% of any
cumulative net proceeds of any such financing or financings in excess of
$1,500,000 shall be applied toward repayment of the remaining principal amount
of the Loan.

 
b.  
The Parent and Borrower shall continue to be obligated to apply 100% of any debt
financing to repay the remaining principal amount of the Loan.

 
4.     Issuance of Additional Parent Common Stock.
 
a.  
Upon execution of this Agreement, the Parent shall issue to the Purchaser, as
additional consideration for Purchaser's agreements herein, a number of shares
of the Parent's Common Stock, initially in the amount of 1,282,084 shares,
representing 1% of the sum of (x) all issued and outstanding shares of the
Parent's Common Stock, and (y) all shares of Parent Common Stock issuable
pursuant to all outstanding options, warrants (including the Original Warrant),
convertible securities and other rights to purchase or otherwise acquire Parent
Common Stock, including the shares being issued pursuant to this Section 4a of
the Agreement ("Purchaser's Additional Equity"). Until the Loan is repaid in
full, the Purchaser's Additional Equity shall hereafter be increased by a number
of shares equal to 1% of any new issuance of additional shares of Parent Common
Stock, whether by (x) sale or issuance of equity to third parties (up to the
first $500,000) or to related parties, (y) grant of options, warrants or
convertible securities to third parties or related parties, or (z) payment in
exchange for or in lieu of compensation.

 
b.  
The Parent hereby represents and warrants to the Purchaser, as an inducement to
accept the foregoing Purchaser's Additional Equity, that as of the date hereof,
there are (x) 105,973,976 shares of the Parent's Common Stock issued and
outstanding, (y) 20,952,381 shares of the Parent's Common Sock issuable upon
exercise of the Original Warrant, and (z) no other shares of the Parent's Common
Stock issuable upon exercise or conversion of options, warrants, convertible
securities or other securities of the Parent (whether or not presently or
contingently convertible into or exercisable or exchangeable for shares of the
Parent's Common Stock) or contingently issuable in exchange for or in lieu of
compensation.

 
 
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11.          Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not, except that the assignment of the rights and
obligations of the Parent and Borrower hereunder shall be subject to the
restrictions on transfers and assignments contained in the Loan Documents.
 
12.          No Further Funding Obligation of the Purchaser. Parent and
Borrower, by execution of this Agreement, hereby acknowledge that the Purchaser
has no additional obligation to provide further financing to the Borrower.
 
13.          Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument.
 
14.          Integration and Severability. This Agreement, taken together with
the Loan Documents and the Amended and Restated Note, embodies the entire
agreement and understanding among the Purchaser, the Parent and the Borrower
with respect to the matters addressed herein, and supersedes all prior
agreements and understandings relating to the subject matter hereof. In case any
one or more of the provisions contained in this Agreement or in any instrument
contemplated hereby, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein, and any other application
thereof, shall not in any way be affected or impaired thereby.
 
15.          Conflict with Existing Loan Documents. Notwithstanding any
provision to the contrary contained in this Agreement, the Amended and Restated
Note or the Original Warrant, if any of the provisions in the Amended and
Restated Note or the Original Warrant conflict with or are inconsistent with the
provisions of this Agreement, this Agreement shall control and govern.
 
16.         Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
 
17.          Governing Law. WITH RESPECT TO ANY ACTION OR DISPUTE BETWEEN
PARENT, BORROWER AND THE PURCHASER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
18.         Loan Extension Agreement. It is the intention and understanding of
the parties hereto that this Agreement shall act as an extension of the Loan and
that this Agreement shall not act as a novation of such Loan.
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

  BORROWER:           DIGITAL COMM, INC.            
By:
/s/ Laurence M Sands     Name: Laurence M Sands     Title: S.U.P Corporate
Secretary  

 

  Address: 2500 N. Military Trail, Boca Raton, Florida     Facsimile:    

 
 

  THE PARENT:           GENESIS CROUP HOLDINGS, INC.            
By:
/s/ Laurence M Sands     Name: Laurence M Sands     Title: S.U.P Corporate
Secretary  

 

  Address:       Facsimile:    

 
 

  THE PURCHASER:           UTA CAPITAL LLC     By YZT Management LLC, its
Managing Member                  
By:
      Name: Udi Toledano     Title: Managing Member  

 

  Address:       100 Executive Drive     Suite 330     West Orange, NJ 07052    
Facsimile: 973-736-0201  

 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

  BORROWER:           DIGITAL COMM, INC.            
By:
      Name:       Title:    

 

  Address: 2500 N. Military Trail, Boca Raton, Florida     Facsimile:    

 
 

  THE PARENT:           GENESIS CROUP HOLDINGS, INC.            
By:
      Name:       Title:    

 

  Address:       Facsimile:    

 
 

  THE PURCHASER:           UTA CAPITAL LLC     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    
Facsimile: 973-736-0201  

 
 
 
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Exhibit A
 
Original Note
 
See Attached
 
 
 
 
 
 
 
 
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Exhibit B
 
Original Warrant
 
See Attached
 
 
 
 
 
 
 
 
 
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Exhibit C
 
Amended and Restated Note
 
See Attached

 
 
 
 
 
 
 
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